We often hear from some of our clients who are willing to spend inordinate amounts of money to try to make their businesses run better. We also hear from clients who are risk averse. Although there’s not really a wrong way or right way of doing things, we thought we could offer some advice on how to determine whether you should or shouldn’t spend the money, and why or why not.
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Let’s talk about education. Training is something every business should spend money on. All sorts of training; sales, marketing, budgeting, education on what your business is geared towards… no matter what it is, education should always be a part of your business expenses.
It’s hard to determine how much education is enough, or how much you should spend. Instead, it’s probably easier to determine how much education you should spend money on based on location and how often it takes place.
For instance, if you can afford $200 a month for local training on something critical to a certain portion of your business, it makes a lot more sense than if you have to spend that same amount of money traveling halfway across the country multiple times, which costs you travel expenses and time away from your business.
Going to a business seminar out of town that offers something different than what you can get locally, while giving you the chance to network with others in your industry is a great benefit across the board, but it’s something you should plan on doing maybe only a couple of times a year unless you’re a vendor at that same conference, where you might be able to generate leads or business by attending.
Unless you’re a new business, we wouldn’t recommend spending more than 10 – 20% of your budgeted expenses, because you need to make sure you’re going to get a legitimate return on your investment. If you’re new, there might be aspects of training you need that might cost you more than this, but always make sure you’re not hurting your immediate ability to earn a living.
Let’s talk about assistance. We talked about hiring people who can do some of the work for you so you can concentrate on the work you need to do for your business. Although this is a wise thing to do, there needs to be some considerations on what you’re looking to do before you spend the money.
One of the biggest scams you might deal with comes with a lot of social media marketing and lead generation. Whereas there are some legitimate businesses that do this work, there are a lot of others who not only won’t get you the leads you want but could seriously jeopardize your website’s standing on search engines.
The same goes for certain types of pay per click ads. Many people will advertise on media sites and be informed about the number of impressions those ads get. Truth be told, all an impression means is that it came up on a page when someone went there; it doesn’t mean anyone clicked on your ads at all. If your ad is on the wrong type of website, you’ll spend a lot of money with little return. Yet, this is a common recommendation by some companies who want to help you set up your web presence.
The best way to evaluate marketing and any other service is by asking a lot of questions, determining what those other people can do for you that you either can’t do for yourself or don’t want to always do on your own, determine how much you believe you can afford and stick to that budgeted plan. Even if others are going to be doing some of the work for you, it’s imperative that you set up a schedule for when they should be reporting to you on what they’ve done for you, and always stay involved to make sure you’re getting your money’s worth. One last thing; don’t always go for the cheapest option!
