Small
Business Tools and Resources
Where Should the Money Go First?
By Terri Lonier, President, Working Solo, Inc. (www.workingsolo.com)
As small business owners, we're often faced with the
double-edged dilemma of too much to do and limited funds.
What's the best way to decide where to spend those precious
dollars? Here are three guidelines I developed along the way
to building my own firm:
1) Make purchases that are revenue-generating investments.
Before springing for a new piece of technology or other
equipment, determine if it will bring more dollars into your
business or simply be a nice perk. Avoid the latter; invest in
the former.
For example, way back in 1991 when I was considering buying an
early laptop, I cringed at the price. Then I looked at my
upcoming travel schedule and realized that the work I could do
at 30,000 feet could pay for the computer - and more. I bought
the machine, paid it off in 90 days with the extra consulting
projects I was able to do on the road, and put it to work
generating even more revenue for my business. Even after more
than a decade, this principle still applies. Think
revenue-generating.
2) If your clients don't see it, don't spend money on it.
Forget the fancy new office furniture or spacious office digs
if your clients won't be visiting you. You can get by with
used filing cabinets and planks (a la Amazon.com, which still
uses desks made with $40 worth of plywood and 2x4s).
Instead, put your money into things that will establish your
credibility with clients, and bring you new and repeat
customers. That may be a brochure, a better Web site, more
powerful digital marketing tools, or other online
improvements. Or, it may be in a more "analog" vein: a
professional-looking business card, a nice blazer or a classic
briefcase. Put your money where it will work hardest for you.
(And no, this isn't an excuse for a new wardrobe shopping
spree!)
3) Pay your suppliers first. When you're faced with multiple
bills to pay and strapped for funds, choose your payments
carefully. I've learned over the years to pay my key suppliers
and virtual team members first - because they're often small
businesses, too, and are counting on my payments. Most of all,
when the next deadline crunch comes, I know they'll be there
for me, because we've developed a trusted relationship.
If you can't pay a bill, don't ignore it. Instead, call up the
company and explain your cash flow situation. (Trust me,
they've heard it before.) Offer to set up a payment schedule
and agree to pay something toward the bill as a sign of good
faith. There's nothing that can darken your credit reputation
quicker than missing - and then ignoring - bills that are due.
It may not be pleasant to make the call, but it's better than
the negative fallout you'll undoubtedly have to live with
later if you did nothing.
Throughout your business growth, you'll be faced with
prioritizing where you put your dollars. Whether you're facing
big investments or minor expenses, take time to choose
carefully so your money can be supporting your efforts in the
best way possible.
Copyright 2005 Working Solo, Inc. All rights reserved.
Bio Note:
Terri Lonier is a business coach who guides business owners on
how to generate greater profits -- and have more fun - while
running your company. One of the nation's most respected
authorities on self-employment and entrepreneurship, Terri is
author of five books, including the classic startup guide,
"Working Solo." Her work has been featured in the New York
Times, the Wall Street Journal, Fortune, Fast Company, Inc.,
and on CNBC, CNN/fn, and radio stations around the world. You
can learn more about Terri and her Pathfinder Coaching Program
at her Working Solo Web site, http://www.workingsolo.com
Past Terri
Lonier Articles
Bio Note:
Terri Lonier is a business coach who guides business owners on
how to generate greater profits -- and have more fun – while
running your company. One of the nation’s most respected
authorities on self-employment and entrepreneurship, Terri is
author of five books, including the classic startup guide,
“Working Solo.” Her work has been featured in the New York
Times, the Wall Street Journal, Fortune, Fast Company, Inc.,
and on CNBC, CNN/fn, and radio stations around the world. You
can learn more about Terri and her Pathfinder Coaching Program
at her Working Solo Web site, http://www.workingsolo.com
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