Caution: Are you investing for success?

Robert Gerrish

As much as I dislike taking a slightly contrary position on the Government’s generous incentives for small business, I simply must sound a note of caution.

Tax breaks are of course to be welcomed, but like a department store’s ‘Best Ever Sale’ we shouldn’t let the lure of a discount nudge us into a purchase we’ll regret the moment we get it home and tear off the packaging.

What will your purchase do for productivity?

Regardless of tax breaks and incentives, it’s important we justify the value of any investment in products or services. Before we sign on the dotted line we need to ask ourselves: how will this expenditure benefit my business?

Such a question is key to solo and micro businesses as we’re rarely accountable to anyone – it’s just us and our pesky conscience! While this is of course one of the many appeals of working as we do, it’s also a potential risk when it comes to spending our hard earned money.

On the topic of productivity, an essential exercise to undertake is to quickly assess where the gaps truly exist in terms of your output.

For example, a new vehicle may seemingly make you more productive when getting out and about to serve your clients and customers. Very rational, very sensible, but this stance of course assumes you have a good pipeline of prospects waiting for your visit.

Do you? If you don’t, your investment right now may be better directed to marketing and customer relationship. There’s little point in having a swanky new car sitting around gathering dust. Grow the leads, create the opportunities and reward yourself later for your efforts.

How will your investment contribute to profitability?

Clearly an increase in productivity should in turn feed profitability. Sometimes the two are inextricably linked, occasionally the connection is a little less tangible. Either way the question needs to be asked…and answered.

I’ve lost count of the number of business owners I have met who have the most wonderful up-to-date gadgets and gizmos yet have a proliferation of ‘financial leaks’ in their business.

The likelihood is, the cutting edge laptop you bought six months ago is a darn sight cheaper now. Be sure that any ‘premium’ you pay is going to pay you back and block leaks before spending more.

Are you investing sufficiently in your number one asset?

In a solo and micro business, the number one asset is YOU. It doesn’t matter how much money you invest in your business, if you’re not performing at your personal best you’ll be holding back growth and future prosperity.

And you’ll be risking burnout, a major contributor to small business failure.

Investment in professional and personal development should always be near the top of your shopping list.

In my coaching work, invariably the first question I ask any struggling entrepreneur is ‘where do you get your energy?’

In just about every case, the uncomfortable response has to do with the absence of energy whereupon I change the question to ‘ok, where did you get your energy when you last had it?’

Boy does that change things! A torrent of energetic activities and pursuits comes my way. Typically stuff like:

• “I used to walk three mornings a week”
• “I’d catch up with mates every weekend”
• “I’d go to the gym twice a week”
• “I went on courses every few months”
• “I attended networking events every month”
• “My partner and I had a dinner date every fortnight”

It’s easy to see how such things would add to energy and a sense of wellbeing and conversely how their removal contributes to lethargy and ultimately a growing sense of disharmony.

Truly effective business plans and strategies come from those operating at high levels of mental and physical health.

So before you go investing too much money into your business, just make sure you’re giving sufficient thought to your priorities and please don’t be afraid to put yourself first.

 

Robert Gerrish is a business coach and professional speaker, the co-author of Flying Solo – How to go it alone in business and founder of Flying Solo, Australia’s online community for solo and micro business.