As an entrepreneur, you desire to grow your business and take it to the next level. The challenge is, we often pull back from spending the money in areas required for our company to grow. We look for a short cut, trying to get something for nothing or making the lowest cost the primary driver of our spending decisions.
To grow your business, you need to spend. However, you need to be smart about it so that you get good returns on your investment. Any time the economy is not doing well, companies tend to cut costs and lay off staff. The CEO becomes an accountant overnight.
Cutting costs is essential if you are eliminating waste from your overheads. It becomes shooting yourself in the foot when you cut costs in areas that bring growth. That includes training, research, and development, advertising and marketing, etc., activities that will lead to higher turnover. It could be hiring a business coach or consultant, getting help with your business plan and your books, an expenditure that will build your capacity to grow.
The challenge many entrepreneurs face is that they don’t see how the expenditure will result in increased income. They feel they are throwing good money away. They end up becoming penny-wise and pounds foolish.
Trapped in the past
It is possible that you had spent money several times before and have nothing to show for it. That is not enough grounds to forbid spending money to grow your business. The fact it didn’t work last doesn’t mean it can never work. It could be that you did the wrong thing.
You cannot keep doing the same thing and expect a different result. You have to invest in growing your business continually. It could mean going back to where you failed before and learn or seek help on how to do it right.
A business downturn could mean that the company is not changing at a fast enough pace. That means a change of direction is overdue rather than double down and keep doing the same thing harder. If you are on the wrong path, moving faster will not get you back on track. You are only digging yourself deeper into the hole. Change might be a more expensive option but your best choice in the circumstance. Not all expenses are the same. You need to spend more on areas that will deliver your business results.