Overspending Can Kill Your Business Success

Overspending Can Kill Your Business Success

Dr. Linda Hancock

ABOUT THE AUTHOR

Dr. Hancock has written a regular weekly column entitled “All Psyched Up” for newspapers in two Canadian provinces for more than a dozen years. Over the years, her readers and clients have said that they have benefited from her common-sense solutions, wisdom, and sense of humour. Dr. Linda Hancock, the author of “Life is An Adventure…every step of the way” and “Open for Business Success” is a Registered Psychologist who has a private practice in Medicine Hat. She can be reached at 403-529-6877 or through email office@drlindahancock.com

Published

February 21 2011

Sometimes you will need to say "no" to yourself when it comes to purchasing items for the business. It may be tempting to purchase the most expensive model of a piece of equipment that you want or to confuse needs with wants but if you do not use your head, you might jeopardize the future of the business.

Before you buy anything ask yourself these questions:

1. Do I really need this item? Our world has kind of lost the idea of "making do". When you are working at building your business you might have to do without some things at the beginning on a temporary basis.

2. Could I borrow the item temporarily? Many times businesses or individuals have items stored away that they don't use. You might have to get the word out about what you need and be rewarded by having someone lend you exactly what you were hoping for.

3. Is it possible to buy second-hand or lease what I need? I have purchased all of my filing cabinets from a used office furniture basis. They might not be the most modern type or colour but they serve the purpose. Consider your options and you will likely be pleased with how much money you can save.

4. How long would it take to save enough to buy what I want? Lay out a plan where you can put away a little bit over time and soon you will be able to pay cash for the coveted item.

5. Do I have things at home that I could use until my business is established? You might need to carry your laptop to and from the office until you can purchase one for each location. The advantage of using personal items in the business is that your accountant can likely treat them as part of your shareholder loan and depreciate the costs for you.

6. Could I rent office space that includes furnishings? When I first started my business I rented a furnished room by the hour from a psychiatrist. This allowed me to not be concerned about buying anything to start until I had built up my business account.

Be very cautious about shopping. Have a set budget before you enter a store and stick to it. Otherwise you will be facing financial stress and may even have some serious regrets in the future. Allow wisdom to rule!