fbpx

Is Your Fear of Spending Money Holding Back Your Business or Personal Finances?


by Don Smith

All products and services featured on this site are independently selected by our authors and editors. If you buy something through links on our site, we may earn an affiliate commission.

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.

Eventually, if you worked hard enough and were a little lucky, you would break even, and maybe even start living the dream with others taking care of the day-to-day operations while you start enjoying the fruits of your hard work and investment.

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.

  1. Is this guaranteed to quickly bring in more revenue than we are spending?
  2. 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. In fact, many are happy if it costs them if they just get some of their time back.

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?

About the Author 

Don Smith

Happily married with five kids, Smith owns a technology company, is the founder of this site, has served on the board of directors for multiple companies, and loves playing soccer, hiking, and mentoring.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

“Do your best and forget the rest.” -Tony Horton It has been a challenging week, with a mix of good and bad,

Read More
Do Your Best and Forget the Rest – Tony Horton

By now, you have probably heard of TED Talks. TED was founded back in 1984 as a conference to discuss Technology, Entertainment,

Read More
10 TED Talks to Improve Your Life

Observe most human beings. Do you live life as most humans live life? If so, immediately change your thoughts, feelings and actions

Read More
1 Warning Sign for Changing Your Life

Like I have often read after consuming fortune cookies, the USA has entered interesting times. The fortune cookie pearl of wisdom: “May

Read More
Freedom or Fool’s Gold?

10 years ago I almost panicked and demanded a refund for my domain and hosting. I was an unemployed pier guard with

Read More
Learn on the Fly

No. Rules do not matter. Rules appear to matter. Humans adhere to laws. We use laws to create worldly order. All well

Read More
Do Rules Matter?

My wife and I are selling the home. A few folks asked to see the house before we listed. Each person feared

Read More
Move into Higher Circles

I recently asked some of my readers what they would ask me if they had the chance, and I got many similar

Read More
Five Pieces of Advice I Would Give My Younger Self

“Ultimately, there's one investment that supersedes all others: Invest in yourself,” Buffett says in a recent interview with Forbes. “Nobody can take

Read More
What is Your Budget for Investing in Yourself?

I firmly believe that “Powering Up”, i.e, doing your homework, is critical to your success.  I also think it can be one

Read More
Power Up! Just don’t take too long!

I am house sitting in horse country. Playing stable boy for 2 weeks comes part and parcel with the house sit. While

Read More
Horse Manure and Self Hate?

I love(d) going to the movies. Grab a popcorn. Kick back. Relax. Enjoy entertainment for 2 hours. Leave the movie theater. Go

Read More
Why I Treat the News Like a Movie

SUBSCRIBE

Get new articles and course discounts from leading providers every Friday in your inbox with your free subscription!

>