We’re always looking to save money, but sometimes in the moment we step over a dollar to pick up a nickel. This could ultimately hurt more than help, here’s why.
I know the feeling.
We don’t have the money. Payroll is next week. How will we ever get ahead?
When you are just starting out money is tight, it always feels like it is.
Every $50 software subscription you sign up for is one step closer to being out of cash. It’s scary. There are times that being frugal definitely makes sense and other times when you need to invest in growth.
These are things that I still struggle with. But by shifting my thinking and putting money behind the right things it has allowed us to grow in the right direction.
3 Things To Invest In Today!
Even if you have to scrimp in other areas you should look to invest in these three areas.
1 - The Best Talent You Can Find
Good talent doesn’t come cheap. A great team member will not just get the job done but find ways to make the business more efficient. A great team member is truly invested in the company going above and beyond.
In my experience, a mediocre team member will drag you down. When times get tough they have a stronger likelihood of throwing up their hands and walking away. A great team member will double down and get in the trenches with you.
In a previous life, I used to manage a bar and restaurant. I was responsible for all of the front of house staff (servers, bussers, bartenders). There was one weekend that one of my busboys wanted off and I wasn’t able to give it to him because we were short staffed. He had found out about it in the middle of a shift and handed me his name tag and just walked out. I was floored that someone would be able to do that. What really amazed me is the rest of the team stepped up and helped cover his duties. The rest of the team could have made much more working at a different bar/restaurant, but there was a sense of purpose and they enjoyed working with everyone else so much more than the money.
Which is a good segue into the topic of pay. A great team member will command top salary, but that isn’t the only way to help attract and retain talent. Some other things you can look at doing is:
Equity or Profit Sharing
When starting off it might be more difficult to get equity sharing setup properly, plus it is something that you don’t want to jump into too quickly as you can’t unring that bell. However building profit sharing back into the bottom line is something that can help drive engagement and buy-in from everyone on the team.
Small Thank You’s
Sometimes the little things make the biggest impact. Create a Typeform survey and ask a couple of quick questions. “What is your favorite candy bar”, “where do you like to get coffee”, those sorts of questions. When you’d like to give a thank you, just go back to the results of that questionnaire and get a little gift card or candy bar, it won’t cost much but will mean a lot.
As a small team, we haven’t always been able to get all the benefits I wish we would be able to. However this last year we signed up with a Professional Employer Organization (PEO) which unlocked a world of benefits plus other things that we didn’t have access to. Which transitions well into getting things off your plate that you aren’t good at.
2 - Punting What You Aren’t Good At
Why are you still doing your own books and accounting? Don’t you have better use of your time?
You should get all of the things off of your plate that you aren’t good at and that aren’t billable. When we signed up with our PEO we not only got access to benefits that I couldn’t buy at a small level (Dental, Vision, Flex, etc) but the real value add is that they are the ones responsible for the employees. They are on the hook if an employee’s paperwork isn’t filed properly or if the health insurance isn’t paid. What about if there is a garnishment or workers comp claim? They take care of that also. Plus we pay only a small fraction of our payroll in fees (about 1%), so it is a no-brainer for us.
So what other things are you doing that should be in a process, or better yet outsourced?
- Office Cleaning
Sure these things all cost money, but if you can invest $200 per month and free up 5, 10, even 20 hours of your time each month. How big of an impact would that mean for your sanity and the bottom line?
3 - Doing The Right Thing
When things go sideways the most expensive thing that you might have to do is to do the right thing. It is much easier to not care and give excuses, but that’s the easy way out. Disclaimer: I’m by no means perfect in this and have made a huge deal of mistakes around this in the past, but every day I work to make sure I don’t do it again.
If you ever get into the position to where you have to let someone go, not because of their performance, but because you haven’t been able to deliver it is one of the most devastating feelings in the world. It is so easy to say “well that is just business” but to own your mistakes hurts now but will pay dividends in the future.
When you have a project that goes over budget and you have to eat it, you’ll learn and make sure you don’t do that again. It will be painful but who knows what keeping the relationship intact will pay down the road.
How to Apply This to Your Business
Start by picking what you should be spending your time on to grow your business. If it isn’t billable or marketable, should you be doing it? Invest in people and process and get the rest off of your plate.
- Identify all of the things in your business that you shouldn’t be doing. IE: Accounting, Bookkeeping, etc.
- Put a monthly budget down for each of them, if you don’t know go ask 3 accountants what they charge per month.
- Back those dollar amounts into your monthly budget.
Only by putting these restrictions on yourself and your business will you be able to go grow and not feel like you have to work 80 hour weeks.
So get out there and invest in things that will help you, and get rid of the rest.