It’s funny, people don’t ask me about spending, they tell me “I can’t afford to…” with a belief that someday they will have the money they need to spend. I call it a belief because it usually does not come with a plan. Listen to these statements below and see if any are things you have said before. (add to the list in the comments if you have other examples)
- By next year I should be able to hire someone.
- I just have to get through the fall, then I will be able to do that.
- I need a new computer and a bunch of other things for the business.
- I can’t afford to travel right now.
- I need to move out of my office to something bigger.
Of course we have all said something like this. These are the statements that are the beginning of a plan. The difference between someone that does get what they want and someone with the belief they can and never seems to get there, is the plan. If you have said any statement like these and found yourself saying again for the same reason next year, and the year after, you are missing the plan.
The person with the plan to ‘hire someone next year’ is not simply hoping they have enough money to actually hire someone, they are doing the research, evaluating the job requirements, deciding on what they will actually hire for, determine the costs, creating a strategy to make the money they will need, and identifying the exact time it will be possible to hire if they meet all their deadlines.
So when do you know it is time to spend? A few years back I blew the engine in my 12 year old Subaru. I think the universe was telling me it was time to spend, but I still had to do this work, even when it was a required purchase.
Don’t Have the Money
When you don’t have the money it becomes difficult to do the work, hire, travel, purchase, etc. When I thought about getting a new car or putting a great deal of money into my old car I kept thinking to myself, “next year” or “in the fall” or some other time. Like things were just going to change on their own to make it the right time to put out a large amount of money. It is the same for our businesses. Unless we have specifically earmarked money to spend and we know the plan to make it viable for the business it is just a belief in a future that we would like to see materialize.
When you don’t have the money you need to start by thinking, “How much money do I actually need.” To answer that question it is much more than simply saying ‘a lot’ or ‘a new car’s worth’.
Don’t Know the Details
If you want to know what you have to earn you have to know what you have to spend. This is particularly true if you are also hoping to have a profit in your business. Start with the details of your purchase. Do you know how much it will cost to rent a new office space or purchase that new computer? The ‘real numbers’ not just a range that you think you know based on signs you’ve seen or people you have talked too? I find that my expectation of value are different than my actual need and that affects my estimation of cost.
When I went to purchase two computers for my office I found that one was $1,000 more than I expected and the other was actually a little less than I expected. What I needed, what I wanted, and what I could afford were all different. I had a plan to purchase the computers with an estimation based on what I saw in flyers. Computers for business require different software, different setup, and different support, plus the work to transfer what I had to my new system. If I had made a plan I would not have been surprised. I would have had the money I needed and I would have known what I had to do to make it happen without stress or issue. As it was, I got only what I needed and had to give up some of my wants on one computer to get pay for the extra cost of the other. My belief was not my reality and it cost me time and money, and added stress to my purchase.
If you want to grow your business do the research long before it is time to buy. Know what you need, where to get it, what you must have, and what you can do without so that when you are ready you can simply step into that next level of your business without surprises in cost, time or stress.
Don’t Have the Path
What do you need to sell? What level of business must you be at? What is your plan to pay back debt (if that is a factor) and what do you expect to spend? Now that you know the exact numbers you can make a plan. If you need to spend $1,200 within the next 12 months then start putting away $120 per month inside your business to make it happen. That is on top of all your debt repayments, weekly, monthly, and yearly expenses, and your paycheque. If you need to $50,000 investment within the next 12 months then the same equation applies. If you do not have that type of money coming into your business then this is where your plan would include new strategies to create money or get new investment. The money does not come at the expense of your current payments, it must come as an addition to them.
Now it is time to spend. When you get to this moment, defined in your plan, it will not feel like you are being extravagant. You will not feel like you have to continually justify your purchase. It will feel like this is what you planned for. This is the next step in your business. This is how you will earn more money, make more income, create more profit, and serve more people. We all have to invest in our businesses. Every time we want to grow we have to invest. If you have a plan then your purchases will be investments aligned with your growth strategies. Don’t just buy, buy, buy because you see a need and don’t just kept putting off investment because you never see the path, create your plan to spend and invest wisely in your business’s next steps.