One of the great challenges in any new business or startup is managing resources, or the lack of resources. In fact, you could argue that’s a challenge in most any situation. But it’s especially true in the startup phase of a new business or project. And as in most things in life, the battlefield is usually the mind, not the checkbook.
What do I mean? It is extremely helpful if you’ve already thought about what your plan for your resources will be before you arrive at the decision or problem. How much can I spend? How much should I spend? A budget would be really helpful, of course. But even after you’ve set a budget, you still have to decide on when and how much to spend on things as needs arise. It’s the execution of the budget I’m wanting you to consider.
Here’s some proven advice I’ve used to aid my decision-making when it comes to executing my budget, or getting things I need for my business. I call this the “Entrepreneur’s Spending Rules.” I know it’s not very creative, but it’s also not confusing. Here they are:
1. Don’t Buy It Until You Need It: Use some real discipline here. Ask yourself, what impact will it have if I wait to buy this item? Do I absolutely need it now? Will this help me generate more income, or will it just lower my profits? And the real question, “Is this a want or a need?”
2. If You Need It, Don’t Hesitate To Buy It: Having said all of that, if you do need this item, don’t hesitate. If it will help you generate more income, open more opportunity, make you more efficient, save you time so you can focus on more income-generating activity, then DON’T HESITATE! Buy it!
3. But Make Sure You Need It: Finally, go back to statement 1. above and ask yourself once more, “but do I really need it?”
Now you might say, “Wayland, you’re making much too big a deal out of this.” What I’m hoping you’ll see is that if you get yourself and your employees thinking along these lines, you’ll be absolutely amazed at what you really need to operate your business successfully. And let me warn you that, in my experience, you often don’t make purchasing errors when buying the expensive things (computers, copiers, furnishings), but it’s the every day expenses that most folks don’t focus on that can really add up and chip away at your profits.
After all, it’s not what you make, but what you keep.