Not many business owners have money to burn. Unless you have seen a massive upsurge in custom and in your profits, you do need to be careful. Make the wrong decision, and you may face the financial consequences. But make the right decision, and you might even see a financial upswing. It’s a balancing act, but to see you through, you need to implement more than a little wisdom.
Let’s look at some of the areas where money may need to be spent.
When thinking about your business premises, it makes little sense to spend money renting or buying office space when you are a one-man/woman army. A simple blogging business can be carried out at home. However, if your business requires more space than your comfortable pad, and if you do need to hire others to work with you (or you need somewhere to accommodate customers and clients), then you will need a bigger base for your operations.
In the short-term, renting may be the better option while your business is growing, but when you have achieved some level of success, you might also want to buy a commercial property as this will save you some money in the long run. As with your living accommodation, this is cheaper than renting forever.
And consider how much space you do need, as whether you rent or buy business premises, you do need to look for something that is appropriate. You may always want to go for something a little bigger to give you scope for expansion, but don’t go overboard as you will only end up spending a fortune on overheads.
When thinking about hiring staff, it depends on how much work you have coming in each month, and what you can comfortably manage yourself. If you can do all that needs to be done, then don’t hire anybody. However, should you find yourself stretched, you will need help. For irregular tasks, it may make financial sense to outsource some of your tasks, as that will negate the need for bigger premises or staff salaries. On the other hand, if you are outsourcing tasks on a regular basis (and probably spending a small fortune), then it may be cheaper to hire people to work with you, as this may be one business decision you will never regret.
If you do hire staff, don’t employ more people than there is work to do. You will only waste money while they waste time twiddling their thumbs. Know what work needs to be done, and hire accordingly. You can always take on the occasional temp when the level of work to be done is variable, or part-time if there isn’t scope or money for full-time positions. However, know too that the more staff you employ, the more scope there is to grow your business, so weigh up your needs with the money you have to spend.
When buying equipment for your business, don’t be dazzled by the latest tech available. Only buy what you need, and not what looks good sat within your office space. But should you buy something brand new? In some cases, yes, provided you have the money and you need the item in question. You will benefit from advanced features and improved productivity for you and your staff. However, there is no harm in buying something almost-new or even second-hand provided you aren’t buying something outdated or in danger of malfunctioning. Be smart about your purchases, and shop around. You don’t always need to buy something right away, and you can often buy the best equipment at a cheaper price if you wait a while before spending.
When it comes to spending money, there are no easy answers. It depends on what you need and when you need them. There will be times when you are forced to take financial risks. But provided you weigh up the pros and cons of what you need, and provided you do have the money to spend at the outset, you stand a better chance of making a wiser financial decision.
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