A man once told me he could save me $1,000 in less than a minute. Needless to say I was a bit dubious. "It’s easy," he said…and continued on to show me how.
He explained it this way…
“My wife the other day shared that she only spent $500 on clothes she bought. She said she saved almost $500 through the department store sale and some coupons she clipped from the Sunday paper.
To which I said: "If you hadn’t spent anything, think of what you might have saved."
“And there,” he said, “is how you save $1,000 in less than a minute.”
How do you budget for your expenses in a rough economy? Do you create savings by spending? Or do you create them by spending even more smartly or not spending at all unless there is a real savings down the road.
What do I mean by “down the road?" Essentially here are two approaches to saving money:
1. First, you can save on the overall cost like the man’s wife did. Get a discount, clip some coupons, and minimize the overall expense. This will reduce the cost of your purchase but not “save” money. In the long run it usually means money is going out…but there is no return. I'm sure you can think of some business purchases that have been or are enticing that way.
2. Second, you can spend to save money in the long-term, which is often more productive with respect to return on investment. This sort of spending is the type that can not only save you $1,000, it can also reduce later costs as well.
The second way to spend takes more discipline and more insight than the impulse “discount” offers, but suggests a longer lasting benefit to you and your business. This type of expenditure also helps you later on with the first type of spend temptations.
Some examples of smart spending (the second type):
1. Eliminate spending that isn’t result-oriented. If you see (or doubt) something, try making the hard decision and cutting it off right now. Today. Or as soon as the contract for the service ends. Too often, businesses continue to spend money on “comfort” services that make you feel like you are doing something right to get the word out about your business - when all you’re really doing is using up your capital on non-performing ideas.
2. Understand that long-term growth isn’t usually solved by short-term spending. In other words, don’t piecemeal your marketing or business expenditures because you are pulled in by a “save now” sign or advertisement or special offer. Make sure your budget has a planned, long-term goal behind it: X business growth over Y timeframe. Otherwise, you’re just clipping coupons in the hopes that it can look like you’ve saved money when all you’ve really done is spend it.
3. Finally, of course, hire a marketing consultant to help you integrate and get a larger perspective of your business marketing plans and determine where and why you should or should not spend on certain marketing channels. By having someone outside the company come in and help you get a bird’s eye perspective, you can have a fresh look and the issue and challenges facing your marketing/business plans…and how to revise to spend smart, and save more in the long term.
Now, aren’t you ready to save a $1,000 in one minute?