As a small business owner, you live for the freedom to explore creativity and ideas that motivate you. However, it’s a challenging road with many obstacles to face and problems to consider that you otherwise would never have to as someone working a 9 to 5. That’s why the greatest thing any small business owner can do for themselves is to choose to spend money on the right things. Much like Dave Ramsey reminds us to make every dollar count, in today’s article, we’re reminding you where to make those dollars count—as a small business owner. Have you been brainstorming smart places to spend money effectively? Here are 5 areas to kick-start your improvement today: 1. Books Books are a cost-effective way to peruse some of the world’s most brilliant minds—and for practically no money at that. From personal finance to career and self-development, reading is a rewarding and often affordable way to grow and learn. In fact, the average American reads about four books a year, according to Pew Research. But successful entrepreneurs like Bill Gates are opposite of the average person. He reads 50 books a year—or about one book per week. Now we’re not saying that you need to start reading one book per week. But what we ARE saying is to look at reading as a way to improve yourself: to build human capital. Whether it’s to gain a new perspective, become a better writer/communicator, or to inspire yourself to achieve your business goals, starting now is better than not starting at all. Some good books (although not exhaustive) to spend money on are: Good to Great: Why Some Companies Make the Lead, & Others Don’t by Jim Collins The 7 Habits of Highly Effective People by Stephen R. Covey Think and Grow Rich by Napoleon Hill Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink 2. Travel Travel is one of the greatest, most worthy things that small businesses can spend money on. There’s even research that backs this up. According to a leading global experiential advertising agency, Momentum, their 2019 report identified that 76 percent of all consumers would rather spend money on experiences than on material items. Not only this, small business owners who spend money on experiences result in greater happiness, better memories, less clutter, greater mindfulness, and of course, a far greater opportunity to network and connect with others all over the world. From a business perspective, networking is one of the most rewarding activities that anyone can do to grow and improve your business. After all, it’s not just what you know—it’s who you know. 3. Tools/Software That Make Your Life Easier There is something to be said about curious business owners. Curiosity often drives individuals—not just business owners—to constantly ask why. As opposed to folks who stick to the status quo their entire lives, they often revisit existing processes and systems to ask if the old way of doing things still makes sense. As a freelancer, small business owner, or independent contractor, think about a time when a demanding client needed deliverables within a tight timeline. That’s probably every client, right? Clients often don’t spend money on tools on your behalf. So really, it’s your responsibility to spend money on time-saving solutions. Because time is literally anyone’s most valuable asset, Kashoo offers simple, streamlined features to help small business owners save time. Kashoo 2.0 no longer uses the “do it yourself” approach. Instead, small business owners have access to an intuitive dashboard, automatic financial reconciliation, quick in-app client invoicing/invoice management, and overall reduced administration. Also, investing money in project management software, email marketing software, and customer relationship management software (to name a few), are other smart areas that small business owners can spend their hard-earned money on. If you currently run a retail or eCommerce business (or both), we have a great article that discusses some of these tools that help make running your business more efficiently. 4. Long-Term Financial Goals Long term financial goals can be a daunting subject. When we think of “long-term” we often think of over five years away. And we aren’t wrong! Most people live and think for the short-term and this includes how they spend money. Here is a 4-step process to start long-term financial planning today: Start with a Four-Step Process Start by thinking holistically: Think generally about two key questions: what’s most financially stressful to you right now, and what you might consider a dream goal that better finances can help make happen. While traditional long-term financial goals are to buy a home or save for retirement—these goals aren’t for everyone, and it doesn’t need to be. Example: I want to pay off my debt before 25. By creating a monthly and annual budget, I can save money faster to pay it off. That way, I can focus on my dream goal of starting my own stationery business and become my own boss. Whatever dream that might be for you, dreaming big can help manifest your financial and career goals to eventually become real. Chunk them to the most important bits: Next, make a commitment to the goals that are real and tangible. In the previous example, chunking the statement allows you to focus on the first step: to make a budget. Invest in accounting software: Accounting software is a great tool for small business owners to invest in if you already have a business. Properly tracking income vs. expense, cash flow, and invoice and expense management can be a make or break for small business owners. After all, understanding how to read your finances is key to any successful business. Bring in an accounting expert (if required): If financial literacy is something that you struggle with, then you might want to consider bringing an accounting expert into the mix. Don’t feel bad though. While the U.S. is the world’s largest economy, America as of 2019 is ranked 14th when it comes to the percentage of adults who are considered financially literate (a whopping 57 percent). So, you’re not alone! 5. Giving Back Small businesses tend to operate locally and for good reason. They’re built from the ground up by community members, are deeply embedded in our communities, and often are successful because their family, friends, and neighbours gave them a shot in the first place. Even as small businesses grow to medium- or large-sized businesses, it’s important to not forget your roots. Spend money on giving back to your community, where possible. Of course, if cash flow is tight, it won’t be wise to do that. But if you can, start by researching local charities, holidays, and movements that your small business can get involved in. If you’re unsure of where to start, Charitable Impact helps donors find registered charities to donate their funds to—no matter how little. Done through an Impact Account, you and your business can choose the charities that matter to you. Global Giving, Canada Helps, and Charity Intelligence Canada are also some websites to search from. Spend money the right way—today! From successful business owners and multi-millionaires to resilient, proactive individuals just starting out on their great business idea, there is very clearly a trend on where these people spend money. Splurging on books, saving to travel, investing in tools to streamline efficiency and save time, planning for the long-term, and giving back is at the top of the list. Ready to start improving your money management? Try TrulySmall Accounting to start on Tip #3 and #4 today. We encourage you to take advantage of our free 14-day trial to try out all of TrulySmall Accounting’s useful features that can help you and your small business continue to improve—because that’s what investing in yourself is all about!
