The Three Places You SHOULD Spend Money When Starting Your Business

Spending money is difficult when you’ve just started a business. But there are some reasons to spend. 

When you are starting a new non-profit, small business, social enterprise, or any type of organization, you try to save every single penny you can. Things feel tight. There is not much margin. The first days can be gut wrenching. You have big hopes and dreams you will be profitable, everything will go your way, and you won’t be forced to eat dirt for breakfast. Worrying if you will have enough money in those first days can be consuming. You think about it throughout your day. You dream about it in your sleep. 

But, as they say, you have to spend money to make money. 

I don’t believe that is true in every situation, and I have seen people waste money – especially if they manage an investor’s cash – but I do buy into this in a few ways. 

There are three reasons to spend money in your first days of running a business – or even BEFORE running a business – even if you don’t feel comfortable with it:

Spend Money on a Consultant

“Wise people do wise things. Poor people have poor ways.” My friend Ben said this to me about 20 years ago while I was volunteering with him at a food pantry. A man without much of an education, Ben had a lot of life experience. After he was permanently injured in a car accident, Ben got off the streets, cleaned up his life and started helping the people who he used to share needles with a decade earlier. While Ben dropped out of high school, spent over a decade in prison, his wealth of knowledge and wisdom superseded almost everyone I knew.

“Wise people do wise things. Poor people have poor ways. Make sure you are wise, not poor, Chris.”

Hiring a consultant is the wise thing to do. There isn’t a hero on the silver screen that ever saved the day on their own. Whether it be Star Wars, Rudy, or a Pixar film, every protagonist has a mentor that inspired them, coached them, gave them guidance, or caused them to believe that they could accomplish the task at hand.

It’s good to gather wise and experienced people to serve as a Steering Team for you. It is good to set up regular meetings with a good expert in your field. But the best thing you can do is or hire a good business coach or consultant. As you look for these folks, make sure they have a heart of a teacher, are trustworthy, love the product or service you provide, and, most importantly, care about you!

Making mistakes that could be avoided is expensive. So, spend the money up front. It may seem like a lot at first, but you’ll be glad you did.

Spend Money on Branding

Branding is more than just making a logo and building a website. Branding is sharing the story of who you are. My friend Anderson Harrison III, owner of Superlative Brand Consulting, says that every person has an important story to tell. You have an important story to tell and your product tells that story.

When starting an organization my partner suggested that we hire a company to help us shape our brand. Truth be told, I was very resistant. There was only so much money to get started that was put up by our initial investors, and I didn’t want to tell them that we spent several thousand dollars going through a process of brand creation.

However, I learned that working with a good branding company was worth every dollar. While we had to put up several thousand up front, they helped us to see who we already were and what value we were providing. In making that initial investment, we were able to raise over $2 million from investors.

But the key was, the branding process didn’t create a story that we could tell, it revealed the story we were already living! And the process gave us the confidence to tell our story to anyone who would listen.

Here we are, six years later and this brand story has shaped our identity as an organization.

As you build your business it is essential that you get good at telling your story.

Spend Money on Counseling

The financial, personal, and emotional pressures that go along with starting a new business can be incredibly taxing. When I left my secure job to start a new organization, I received this advice from leadership guru and owner of Collision Leadership, Dr. Scott Peterson. One day he said to me: “When things are going well at home, nothing can touch you.”

The truth is many new businesses and organizations fail. There is no other way to say it. Starting a new business is hard. That doesn’t mean it’s not worth trying. In fact, the journey, as hard as it might be, can be rewarding in more than one way. Financial reward, large profits, and gaining brand recognition aren’t the only benefits. Personal growth, gaining a valuable education, and learning life lessons also contribute to the journey.

However, it’s important to protect yourself and the relationships that are most important to you. That’s why it’s important to spend money by visiting a professional on a regular basis.

Socrates said, “To know thyself is the beginning of wisdom.” Just like exercise keeps your body healthy, spending money on a counselor or a therapist is an investment in your emotional and mental health. Checking your emotional temperature, or assessing your mental health, your stress level, and your relationship health keeps you in tune with what is really happening in you. People start business to make their lives better. No one sets out starting a business or organization with a goal to get a divorce or suffer a heart attack, or deal with a nervous breakdown.

That’s why this is so important.

Starting a new organization was the best – and the most stressful – thing I’ve ever done. My kids were young, my wife was in her own career, I’d left the secure money-maker with the benefits, and there wasn’t a guarantee that I could get this thing to go. Talk about pressure. But our weekly visit to our therapist centered us, helped us keep perspective, and because we were attentive and things were going well at home, no matter if we were experiencing the up or down in the organization, nothing could touch us.

Saving money when you’re starting your new business or organization is extremely important. If it is difficult to spend money in these areas, don’t spent. Consider these investments.