Are you making enough money in your business despite Covid-19?

Poor money management has been the cause of more business failures than any other single issue. Some businesses were doing well before this hit us and had good cash reserves. Whilst other might have just launched. Current events means that many business owners are having to think of ways to work differently in order to keep going.

Part of the problem is that we aren’t born knowing how to manage money. Most of us aren’t taught how to handle it either. We figure it out along the way, through much trial and error.

Those same mindset issues and bad habits that wreak havoc in our personal finances can plague our businesses as well if we’re not careful.

Here are 3 mistakes that you can might be making that result in wasting money. 

Catching Shiny Object Syndrome

Some things are just hard to resist, aren’t they? Especially when you’re feeling down or when friends and colleagues are all jumping on board! New tools, training, and even business models can all have a strong pull, and if you aren’t careful, these shiny objects can quickly distract you from your goals. It’s too easy to panic and make poor decisions. Adopting a new business model can be a fantastic idea, especially taking your business online. However it needs to be throughly explored before you launch into something.

If you find yourself catching shiny object syndrome, try this two-step plan:

  • For “too good to refuse” offers, make a plan for achieving a positive ROI before you purchase. If you cannot find a (realistic) way to make the purchase pay for itself, don’t buy it.
  • For exciting new business ideas. Jot down your idea and a basic outline, then reach out and talk to someone about it. Get them to help you make a sound plan. You don’t want to won’t join the ranks of half-finished business plans that litter the internet.

Falling for the Sunk Costs Fallacy

If you’ve ever said to yourself, “I’m not using this subscription, but I can’t give it up! I’m still paying the launch price and now it’s much more expensive!” Then you’ve fallen for the sunk costs fallacy.

This common mistake is famous among economists, and we all fall victim to it from time to time. Simply put, the sunk costs fallacy is what makes us justify investing more money or time in something—even though we’re not seeing results—because we’ve already spent so much. It’s what encourages us to repair the car one more time (after all, you just put new tyres on it), eat a meal we don’t enjoy (simply because you’ve cooked it), and yes, continue to pay for tools and resources you’re not using.

Take a few minutes and examine your current business expenses. What are you paying for month after month that you’re not using? Either make a plan to put them to work for you, or cancel them. Stop falling for the sunk costs fallacy.

Too Much Penny Pinching

You thought this was all going to be about overspending, didn’t you?

Here’s the surprise…..  Spending too little is just as bad for business.

If you won’t invest in your development and that of your business then you’re unlikely to grow your business. We all have limits to our knowledge, skills and mindset. Investing in your self development is the way to grow a successful business.

When you’re constantly on the lookout for free and low-cost tools or working 16-hour days because you “can’t afford to outsource,” you’re not doing your business any favours. Sure, it looks like you’re bootstrapping and working really hard to make something from nothing, but what you’re really doing is digging yourself a rut it will be nearly impossible to climb out of. Not only that, but you’re reinforcing a scarcity mindset that will continue to plague you for years if you let it.

Rather than pinching pennies, learn to spend money strategically. Buy what you need, when you need it. Invest in top-quality products and programmes rather than settling for the low-ticket, half-baked plans. Just like quality clothes, cars and furniture, quality services and software last longer and work better.

Good quality business tools and support will pay for themselves.

Is it time for you to think about how you’re using your business money?


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