Pinching pennies can be a very good thing–with a business budget to contend with, it is important that you keep a close eye on expenses and make sure that you are not just throwing money out the window. But, like all things, too much of budgeting and penny pinching can actually stifle and choke your business. There is some truth to that old adage that you have to spend money to make money…
A good, working business budget should include an accurate projection of expenses and revenue. But, if you underestimate your expenses, and do not allow for spending when it is necessary, it is like cutting off the flow of blood to your business. A shoe-string budget is one thing–keeping expenses to a minimum, looking for ways to cut costs and make the most of what you have, and evaluate expenditures to make sure they are valid–BUT, if you don’t allow yourself some spending in order to get the job done, your business will show the strain.
With a little creative thrift, your customers shouldn’t be able to tell that you are pinching pennies. You can still give great customer service and make sure you have what you need to get the job done. If you are cutting off most of the main funding to your business and making choices to hold back and not purchase necessary equipment, have those meetings, or take those business trips–all because you think you cannot afford the expense, your customers will know and sense that your business is struggling. You don’t need to throw money around and make a big show of your expense budget to impress customers (in fact, that sort of behavior usually does not impress customers and prospects in most fields and industries), but you do need to make sure that you are funding your business and investing enough in order to do what needs to be done.
See Also: People Want to Back a Winner
Making and Using Business Projections
You Are the Money–Taking Charge of Your Business Income