Attitude Toward Spending Money?

[Growth & Learn]

Hey,
Trying to get some advice from other successful business owners. Here's the deal…for most of my life i've been extremely disciplined when it comes to money. I live WAY below my means and I rarely spend money unless I need to. I think for the most part this attitude has served me well up to this point.

As my business is growing though I'm not sure if I'm being too disciplined….let me explain.

So, we've had a couple successful years and things continue to grow. Finally, we have some cash and I'd like to potentially bring on some more staff in hopes that it could grow further.

A couple of these positions I feel have the opportunity to grow the company but there is definitely no guarantees.This 'investment' and risk of financial loss eats me up. I'm nervous to spend the money and eat into our profits.

There is risk that the money could be thrown away (i.e. the return on investment won't be there) and my time could be wasted. Double whammy…


Anyway, for those that have successfully gotten over this hurdle I would love to hear your thoughts?

How do you deal with the risk of spending money on employees when the ROI isn't guaranteed to be there?

 

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[Growth & Learn]

Did I post this in the wrong spot? Is this type of stuff better suited for the INSIDERS forum?

 

[Durete]

One truth in life: Nothing is guaranteed.

You will just have to see if the risk is worth it:

Aka on one side:
- What do I get from this investment if it turns out positively?
(Both financially, time wise, and other benefits)
On the other side:
- What do I get from this investment if it turns out negatively?
(Both financially, time wise, and other benefits)

- What will I get if I do not make this investment.
(You'll never know, you won't be able to grow, etc etc etc.)

I personally will see if it is an affordable risk. (Will I have to get in debt/close the business if the investment goes bad)
And then sleep one night, the next morning the first thing that pops up is what I'll do.

 

[H. Palmer]

Being disciplined with money is an OK thing.

As far as hiring people, it's impossible to say what is smart since we don't know your profit and revenue.

I would never spend more money on the business than what's coming in.

Besides more people there must be other ways to accelerate the growth of your company.

Consider:
. investing in new computers or other equipment,
. experiment with an assistant in the Philippines
. build a tailor made software system to replace some standard software you are using now (one time investment although upgrades will be necessary)
. systematize your work flow and become more efficient
. relocate to a more upscale office to attract higher quality clients,

and so on.

 

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[Hooked]

There's a difference between being disciplined with spending habits and being afraid to invest in the right opportunity when it presents itself. Investing is only risky if you don't fully understand it, and I bet you understand your own business pretty well.

With regards specifically to hiring, I'm of the mind that you'll know when you need to. Work your a$$ into the dirt before you hire somebody to replace yourself, but try to bring the right people on early as you can benefit from their talent and they'll grow your business more than you ever could.

Hire slow, fire fast.

 

[Bila]

I just hired an assistant for a few hours a week .....I am already seeing that it,s one of the best decisions i made. Why ? i focus on money making activities.
I hired my weaknesses and that makes a huge difference, i think now that i should have done that way earlier, if i have to do it all over again, i would hire early on, and really focus on what brings money

 

[Growth & Learn]

One truth in life: Nothing is guaranteed.

You will just have to see if the risk is worth it:

Aka on one side:
- What do I get from this investment if it turns out positively?
(Both financially, time wise, and other benefits)
On the other side:
- What do I get from this investment if it turns out negatively?
(Both financially, time wise, and other benefits)

- What will I get if I do not make this investment.
(You'll never know, you won't be able to grow, etc etc etc.)

I personally will see if it is an affordable risk. (Will I have to get in debt/close the business if the investment goes bad)
And then sleep one night, the next morning the first thing that pops up is what I'll do.

It's not an astronomical investment…maybe 12-15k for 3 or 4 months of employees. I'll get an idea if it's working after 3-4 months and I can pull the plug if it doesn't work after that.

That being said I worked had to get that 12-15k and wouldn't want to throw it away. Plus, I also value my time immensely and training someone for months who either leaves or doesn't bring in a return on their investment would be a tough pill to swallow.

 

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[Growth & Learn]

I just hired an assistant for a few hours a week .....I am already seeing that it,s one of the best decisions i made. Why ? i focus on money making activities.
I hired my weaknesses and that makes a huge difference, i think now that i should have done that way earlier, if i have to do it all over again, i would hire early on, and really focus on what brings money

What do you have your assistant do that allows you to focus on money making activities?

 

[Growth & Learn]

There's a difference between being disciplined with spending habits and being afraid to invest in the right opportunity when it presents itself. Investing is only risky if you don't fully understand it, and I bet you understand your own business pretty well.

With regards specifically to hiring, I'm of the mind that you'll know when you need to. Work your a$$ into the dirt before you hire somebody to replace yourself, but try to bring the right people on early as you can benefit from their talent and they'll grow your business more than you ever could.

Hire slow, fire fast.

You are correct and that I do know my business well. 1 person is being hired to create solutions to address one of the biggest problems in my business. The only real challenge is that we are essentially inventing this position. We aren't 100% clear if it will work out in terms of ROI. Especially because we'll be giving the customers a lot more bang for the buck with the hope that they will stay with us longer and order many more products.

 

[Bila]

Sh

What do you have your assistant do that allows you to focus on money making activities?

she does all the data entry ( sales- expenses - client filing with details ... Now i only look at her reports and it helps a lot to have the detached perspective
I focus on brand building and money making activities ( meet clients- deal closing- marketing , PR ..etc.

 

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[D11FYY]

You could potentially only get someone in for 1 or 2 days per week to spread the work load and let you focus on growing the business.
Not sure where you are located but over in the UK a few business has a 0 hours contract approach. The government is trying to out rule it but its basically just getting someone in when you need them.

If hiring will grow your business, dont think twice. You also do not have to jump in at the deep end hiring a few. Also if you have an office stick cameras what not in so if your not in office you can make sure your getting what your paying for.

 

[RogueInnovation]

My solution to staffing is freaking simple

Temp positions
Paid on commission
Trial basis for x period of time

And setting a very clear goal and set of tasks for the new employee

If you are just handing out bs jobs nothing will change, if you are making impactful positions in your company you should see a shift and be able to better analyse if they will return your investment in them in a realistic time frame.


It sounds like you have a mental block though
Like you are trying to DO things to make your company grow, rather than growing, and truly understanding what you do as a company.



Look, cashflow is about "absorbing" costs to produce rewards.
You need to then stage your investment from one off contract jobs to casual jobs, to part time, to low wage, to salary, and higher paid positions.

You do not just pay people a full time job in the hope it will be there forever, you need to lay the groundwork first.

I'd say, put a guy on ONE project, as a trial basis, and see where it goes from there.