In business, you need to know when to save… and when to spend. Because while you need to protect your profit margins, it also takes money to make money.
Here’s a simple truth:
In order to make money, business owners need to spend money.
This presents a huge challenge for those who are just starting out in business… and don’t have a lot of money yet. After all, it’s easy to just keep spending when you’re already earning at the million-dollar level.
But before then, you must choose carefully where to funnel your limited resources. Do you spend more or save more? And if you do decide to spend, what should you spend on?
Well, this is where spending smart comes into play.
You need to avoid overspending on things that don’t help increase your profit margins… while putting more money on things that could help you get to your goals faster.
Easier said than done, right?
In reality, many business owners don’t even know that they’re overspending on unnecessary things and services… to the detriment of things that actually move the needle in their business.
That’s why in this article, we’ll give you tips on how to distinguish between those two things… so you can spend smart and increase your profit margins.
5 Ways to Spend Smart in Your Business
Here are five ways to spend smart in your business:
#1: Avoid paying good money on quick fixes
One of the things CEOs typically overspend on… are quick fixes. This is not to say that doing business with done-for-you agencies is always a bad idea. But you have to be careful of the ones that overcharge companies for bare minimum work.
You don’t want to be just another item on their just-get-it-done checklist, like when they say:
Let’s just get them a social media post once a day because that’s what we promised.
If you’re going to pay for marketing services, at least go for an agency that will actually get you leads. And make sure you hold them accountable for the results they promise you.
Or better yet…
#2: Invest in your own learning
Here’s the danger with relying on done-for-you agencies:
They could very easily turn into lifetime expenses for your business.
And even if these agencies increase their prices, you’d have no choice but to keep paying them.
That’s unless you invest in learning the ropes of your business yourself.
There are many agencies out there that do not offer quick fixes. What they offer instead are coaching services that help you upskill. Sure, it might cost you more to pay for a coach now, but what you’d be gaining in experience can more than make up for that in the long run. Because if you invest in upskilling yourself and your team… soon enough, you’d be able to do everything internally.
This will help you save money in the long run. And speaking of doing things internally…
#3: Don’t go the cheap route in hiring
Here’s the thing about taking in cheap hires:
You might think you’re saving good money by paying the most affordable rates you can find… but these people end up costing you more money in the long run.
For example:
You hire an inexperienced receptionist because they charge $12 an hour while everyone else is charging $15. You spend a month training them. That already translates to wasted time and money, because if you had hired someone with experience… you won’t have to spend four weeks training them!
Now, despite the month-long training… your inexperienced receptionist is still bound to make mistakes. Maybe they mishandle a client or two while they’re still learning. Nothing too bad, right? You might think that… but consider the lifetime value of each client that comes into your business. Whereas someone experienced is less prone to make such mistakes.
Perhaps, you keep your receptionist for a year… until you finally fire them because things are just not working out. That means you need to go out there and find a replacement. That means new job postings and more time spent parsing through resumes and conducting interviews… until you find the person you should have hired in the first place.
Can you imagine how much money is wasted on all that… than if you had just hired one of the receptionists who asked for $15 an hour?
So, don’t skimp on finding good team members to help your business grow. After all, you can’t do it all. You need reliable and trustworthy people to help you drive growth in business… so spend smart on good hires.
#4: Stop jumping ship from one plan to another
How many projects have you started in your business that you never finished?
Perhaps, you’re working on one project… and you get an idea for a ‘better’ one. So you abandon your original idea to work on this new project. But then in the middle of doing it, you stumble upon another great idea. So you abandon that project, too… until you have a dozen half-baked projects in your business… none of which have reached the implementation stage.
This is costing you a lot of money.
That’s why you need to identify as someone who finishes what they started. If you’ve invested money in one project or one strategy… stick to it until it gets you results.
#5: Invest in paid resources that will get you results faster than free ones
Finally, you need to stop relying on free resources all the time.
You have to remember that success leaves clues — you just have to know where to find them. And more often than not, the lessons that could help accelerate your business’s growth… are ones that you have to pay for. Better invest in those resources now… than go the trial-and-error route — losing valuable time and money before you find the strategy that’s just right for you.
Protect Your Profit Margins Better
Now you’ve learned what things you should spend on in business… and what things you should never overspend on.
You’re now armed with knowledge on how to protect — and increase — your profit margins.
All that’s left to do is practice discipline when you have to save… and prudence when you have to spend.
Now, if you want to make sure that you’re spending on all the right things in your business… I’m here to be your guide.
Just book a call here: www.stacytuschl.com/call and let’s talk about it soon.
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