Spend Wisely On Your Entrepreneurial ‘Flight’ … And Don’t Buy The $12 Snack Box
Once you start to see that your business is growing, your entrepreneurial spirit and confidence will want to keep it going and maybe even accelerate it. You will find yourself putting a lot, if not all, of the money you make back into the business. It sort of becomes a multiplier effect of confidence. In the couple of businesses I have either founded or invested in, we put just about all the money back into the business for the first few years in a number of places. Here are a few places to put as much money back into the business as possible.
Growth (Sales and Marketing)
Driving as much growth as possible during the first few years is paramount if you’re trying to build a sizable business. Even if you are trying to build a lifestyle or one-person business, you still need to spend a little here. Whether this involves hiring more sales-facing people or doing smart marketing, driving your growth is king. There is no better business cologne/perfume than revenue and revenue growth. When you have revenue, you are in the catbird seat to do just about everything else you need or want to do. When you do not have revenue and growth, it infects every other choice you can or want to make.
Innovation (Inventing More Things to Sell)
If you have entrepreneurial chops, you will find this comes naturally. Sometimes it comes so naturally, you have to curb it a bit, but all things being equal, innovating new services/solutions and products will help fuel growth, reputation, and market presence. Spending on innovation can involve bringing in (and paying) some outside experts to help you flesh out ideas.
Hiring and Consulting Help (Finding the Early Disciples)
Once some money starts flowing in, you should be looking to either hire or bring on new people. New people can come in the form of the frontline people you need (e.g. sales, consulting, account teams) and also in the form of support people. Let’s spend a minute on support people. I have found many entrepreneurs only want to hire salespeople and/or the people who are customer facing; they seem loath to spend money on what some may call back-office support staff (administrative help, analytical staff, tech support, accounting support, and so forth). If this is taken to an extreme, it can hinder and demotivate frontline people from doing their jobs. I disagree with the frontline-only thinking and have found good success in hiring a good number of office-based (support) staff. I have found that the right support staff makes the frontline folk’s jobs more productive and enjoyable, not dragging them too far back into administrative/office tasks that were not a fit for their skills.
Spend wisely and invest money back into your business and you will probably find great satisfaction in watching it grow and flourish.
Originally posted on Forbes.