No matter the size of your business, from a high-traffic bricks and mortar to a home-based Etsy store, there are always ways that you can be handling your business finances better. No matter what your profit, these are the major money mistakes you can make – and how to fix them. Over the next few weeks, we will discuss the different mistakes and how to correct them.
Now – Poor Investment Strategy
As a business owner, you are constantly bombarded with offers. They are offers for consultants, credit lines, marketing, supplies, workshops – the list goes on and on. In essence, you are getting plenty of offers from people for the same reason – to part with your hard-earned money.
There is no hard and fast way to decide if something is a good investment in your business. The best way to decide if something is a good investment is to revisit your business plan. Your business plan is a roadmap for how you think your business should run, what is important to your business, what your marketing strategies are and so on. If you don’t have one – then that should be your first investment.
And by investing in your business plan, I mean spending time on it. Don’t throw money at someone who purports to create your business plan for you. How can they make a business plan for YOUR business?
Every time you get a sales pitch, say thank you, take home the materials, and start to look at your business roadmap. Is the investment that you are being asked to make going to benefit your business based on your business plan? Is your business able to shoulder the burden of the cost of the investment? And most importantly, is this particular investment solving an identified need, or a need you didn’t know you had?
And if you didn’t know you needed such product or service, you need to revisit your business plan to see if it is really a need, or just something someone is trying to sell you.
Basically, you really must spend time reviewing any type of investment – large or small – before committing your business to it. Too often, I see businesses spending money on things they don’t need, or spending 10x what a product or service is worth. The best way to combat this is to do the research, spend the time to really think about your strategy before outlaying the money.
When you are overwhelmed, overworked, or just over it – sometimes it just feels good to throw money at a “problem” instead of having to deal with it. But the more you actually research what you are investing in, the more likely you are to have a sound investment strategy.
Business is expensive. Make sure you are spending your money wisely.
Next – Not Knowing Your Numbers