How to Avoid Small Business Money Mistakes
Are you spending money in your business and are they good business decisions? In this post, we’ll demystify the way that some entrepreneurs spend their money and what might occur if you’re not willing to spend or if you’re spending too much! We’re talking about how to avoid small business money mistakes! Learn how to invest smarter in your business!
First of all, let’s find out whether something is frivolous or if it’s a true investment. A true investment would end in you gaining something directly or indirectly. It might result in more revenue, opportunity for connections, in increased confidence, more accountability. Frivolous spending is something that just drains your account without a plan for how you hope to gain something from the financial drain.
Small Business Money Mistakes #1: Spending Willy Nilly.
You like to buy programs because somebody you like, know, or trust is putting something out there. You don’t really have direction in your business so you’re grasping at straws – you hope that by buying this new thing, you’ll have found the answer.
You attend a workshop, a conference, hire a team member, without having much of a plan for what you want to gain from any experience. You end up frustrated and drained because you’re investing but you feel like your business is sinking rather than thriving!
Small Business Money Mistakes #2: Not investing at all.
You’re bringing in good money in your business and you’re starting to run out of hours. You’re worrying about how you’ll create more passive forms of income. You know hiring a team might be a good idea. In the past you’ve looked at possibly attending a conference but investing $2,500 into a conference seems ludicrous and you think of all the things you could do with your money.
You keep schlepping along and you watch others who are thriving and you wonder what you’re doing wrong. Your revenue and your profit are going great and you’re scared to share that with anybody else you might bring onto your team! You end up wasting 5 hours trying to figure something out that somebody could have taught you in 30 minutes.
Here are some mistakes you might be making in your investing strategy:
- You think anybody who is selling something is something worth buying.
- You don’t think through the ROI.
- You don’t create an investing plan.
- You don’t read things carefully. You need to decipher if a product/service is actually something that’s going to help you.
- You wait too long to invest.
Here’s how I suggest you invest in your business after talking to a lot of creative business owners:
Find the Biggest Need
Figure out what you need the most help with. Is that issue solved by you learning something? Buy a course. Is that issue solved by taking something off of your plate? Hire somebody, and figure out what exactly. Is that issue solved by meeting people who are in a similar place in your business?
(Hey! Have you checked out my blog post on 4 Essential Tips to Make the Money Your Business Deserves?)
Shift Your Mindset
If your default is spending too much, make your mindset one that you want to increase your profit margin. If your mindset is that you have to be scrappy and save money, remember that you can make more and that by investing, you’ll be able to create more revenue!
Create a Plan
When you decide to invest, know exactly what you want as a result of the investment you make. Whether it be a course, a conference, a workshop, a service, a tool or equipment, get clear on what it is you want out of your dollars. And ahead of time, decide how much of your revenue or otherwise you want to pour back into your business as an investment. Without a plan, you’re just throwing money around.