Is Your Fear of Spending Money Holding Back Your Business or Personal Finances?
Tuesday, I approved payment on roughly $33,000 worth of bills. That's a regular thing, this wasn't a special one-time purchase, payroll, or even a particularly heavy week. Every week I go through and sign off on the checks and electronic payments prepared by our accounts payable specialist.
The Cost of Doing Business
It's the cost of doing business. You have to pay your suppliers, software to run your business, utilities, lease, shipping, taxes, and employees. Even the janitor, groundskeeper, and pest control people want to be paid.
Yet I see many new entrepreneurs who are afraid to spend ANY money, especially online entrepreneurs.
I get it, it is scary to spend money when you don't know if you will get it back. But you have to in order to move your business forward. I see new business owners making common mistakes like not investing in ways to consistently get more business or performing routine tasks when they should either outsource those so that they can focus on getting more clients or hire a sales rep. Then they wonder why their business is struggling.
Traditionally businesses required a major investment upfront. When you sign a two-year lease, hire people, purchase all the computers, equipment, office supplies, and stock, you have a serious investment and an “oh shit this had better work” factor that I think is missing in today's online world.
You were all in; there was none of this “I'll work for a half-hour a week and pray that I make a million dollars” mentality that seems so prevalent in our online society. No, you worked every moment you could, because you knew that was the only way you could keep up with your bills
Get Over Your Fear
What I'm trying to say is that it takes money to run a successful business. If you're a new business owner, the sooner you get over that, the faster your business will grow. Now I'm not saying throw money out the window, be smart about it. There are two questions I always ask when approving funds.
- Is this guaranteed to quickly bring in more revenue than we are spending?
- Is it a required expense?
If the answer to either of those questions is yes, then it's an easy decision; you spend the money. If not, then you do some more investigating to see if it's really needed
While you might be able to practically guarantee that your expense will bring in more revenue if you have a signed agreement with a client with 50% down and you are purchasing supplies for the job, most things aren't guaranteed. For example, I can't ensure that my clients will double their investment when they hire me as a coach. That's a risk that they have to decide whether or not to take.
There are often low-risk ways to test out new investments though like running an ad campaign for a week or enrolling in a trial to see if it's worth it. But if you don't try investing in things designed to bring in more income, you'll remain stuck right where you are.
It is Difficult to Save Your Way to Financial Freedom
It's the same with your personal life. If you don't invest in things like education, businesses, bonds, mutual funds, real estate, or anything that makes you more money than you spend, you'll remain stuck financially.
While it isn't impossible to do, it's tough to save your way to financial freedom. In the business world, it's nearly impossible to save your way to success. Just like a business, you need to make some investments in your earning potential along the way if you want things to change.
Where do you need to start investing?