August 29, 2014
Paying When It Hurts
There are always those moments when things get tight in your business. Whether a client has delayed on paying their invoice, or the workload vs. employee ratio has gotten a bit thin between large projects. Whatever the case there are always those times when money is more precious and you want to hold on to as much of it as possible. And yet your bills are still due. And you know of things you need to do to improve your business. I’d like to talk with you about paying even when it hurts.
The best thing to start with is understanding what I mean by paying. There’s two ways people normally look at the distribution of money (or time) to someone else for a product or a service. Either you look at this transaction as an expense or you can look at the transaction as an investment your viewpoint will depend on how you value or look at what you are receiving for that money (time). This is the first major hurdle for most small businesses. Too often they view every transaction as an expense. Because everything is an expense then nothing is a positive transaction, everything is just another drain on resources.
Small businesses need to understand the importance of investments this is one of the major factors which I believe separates small business from medium-big business. More big businesses understand the importance of spending money as an investment rather than merely an expense. Let me give you very briefly 3 ways paying when it hurts is a good thing to do.
1. Paying Proves You Value Your Business
When money is tight and you still choose to invest in your business this demonstrates the value you place on your company. Obviously I’m not talking about bemoaning every transaction and ensuring everyone knows you’re spending every last cent of your revenue on the transaction. But conducting your affairs in such a way as to demonstrate that even though things are a struggle you are continuing to invest in your business will speak volumes not only to your reputation but also to the value you place on your business and its success.
These investments made when times are tough inevitably do more to strengthen your relationships, grow your business, and improve your personal outlook on your company than most other aspects of your daily workflow.
2. Paying Makes You Work Harder
You have two options when it comes to a potential investment. You can complete the transaction, recognize the need for additional revenue, and push harder to achieve it; or you can cancel the transaction, pinch your pennies, and work harder on maintaining your current stockpile of resources. Clearly you can see how the first option will do a couple of positive things for you and your business. First you’ll acquire the asset or resource you perceived as important in the first place. And secondly, you will push yourself to be even hungrier in chasing after additional revenue.
When you invest even in the tough times you encourage and motivate yourself to work harder.
3. Paying Shows Commitment
This final item goes nicely with the first. Not only does paying when money is low prove that you value the business but it also proves you are committed to seeing it succeed. When those around you see you continue to pour your time, money, and resources into a business and work on growing it even during the hard times you prove your commitment. I don’t know about anyone else, but when I see that level of commitment and desire for success…I want to do business with them.
Not only personal commitment but corporate commitment is demonstrated when a company focuses on investing in their business even when money is low.
Paying Pays Off
The bottom line is this: paying pays off. You’ll notice throughout each of the three points listed above I referenced the payments as investments instead of expenses. This is the key concept I mentioned at the beginning. You must change your mindset from looking at every transaction as an expense. Once you begin to realize the immense value each of these opportunities presents you’ll be even more ready to continue those investments in the future.
Remember, we’re all in this together!