You have to spend money to make money. As a small business owner, you’ve heard that statement in a dozen different forms and a million different times. That doesn’t make it easier to figure out which purchases should take priority when you have a limited supply of cash.
The fact is that many business owners find it difficult to prioritize their purchases, especially in the first few years of business. Read on to learn more about how you can decide which purchases you need to make and which ones can wait until next month or next year.
Make a List
You don’t actually have to use a pencil and a piece of paper, especially if you’re a pro with Word or Excel. However you do it though, making a real list of all the things you think you need or are considering buying can really help.
Lists do a few different things. By putting everything down in one place, you’ll likely quickly see some items that just aren’t as important as the others. If you have limited cash flow, you can cross those off the list for immediate purchase right now.
Making a list will also help you track what you need as you buy new items. Having a plan when it comes to buying new things for your business actually increases your purchasing power by helping you make smarter decisions.
Do You Really Need It?
Many small business owners get wrapped up trying to buy products they don’t really need. Most will tell you that they’re looking at an item because it will make something that they do easier. Is that enough to justify the cost though?
For example, business machines that do things like print postage can be useful if you mail things regularly, but they cost money you don’t have to spend. They also cost money to maintain and keep working properly.
When money is tight, taking your mailings to the post office and waiting in line for 15 minutes might be the most cost-effective solution – at least until you’ve got more cash and don’t have to worry about the added expense of another business machine.
Will You Earn More?
A lot of small business owners spend more to make things easier on themselves. That’s fine, but only if spending the money will actually help you bring in more cash over the next year or two.
After all, a business won’t last very long without growing. You need business machines, employees and things like office space to keep up. If you won’t earn more money though, at least according to sound projections, you’d be better off keeping your money in the bank.
Don’t Fear Debt
Credit and business loans exist for a reason, so you shouldn’t always fear debt. You do need to make a clear plan about how you’re going to repay it though.
To do this, consider how long you would need to save cash to make a purchase. Aim to pay back any loan or pay off a credit card balance in that same time frame. It sounds simple because it is, but not everything needs to be complicated!
Borrowing money to help your business grow is important and almost every successful business out there has done it. Don’t try to do everything alone, especially if your company just needs a little help to be more successful.
Contact CapRock Services to learn more about how we can help you get the funding you need for your business. Whether you’re looking to buy new business machines, find new office space or expand your team, CapRock Services can help.