I get it, people like trends. When Slack became popular, everybody wanted to communicate via Slack. Why? Because “All the cool companies have Slack, so if I have Slack, I’m a cool company.” (No, you aren’t) But how many asked themselves, is Slack the most efficient form of communication for my company?
If you’re a company that’s just starting out, you may not be able to afford the fancy tech or the best hardware. What’s more, you may not — probably don’t — need it. Just because all your friends are doing it, doesn’t mean you should do it, too. Spend on things because you need, not because someone else has it.
Office space is one of my biggest pet peeves in this area. Now if you live in a studio apartment and you need a place to work, by all means get yourself a spot at WeWork. But the number of times I’ve heard founders tell me that having a co-working space lends legitimacy to their operations, even though they don’t need it and can’t afford it, is ridiculous.
Or the client that had just launched their business but refused to use QuickBooks because they felt that invoicing out of QuickBooks looked JV. I understand that perception is reality, but I can assure you that no one is judging your business based on what your invoice looks like.
There’s no business reason — zero — to go out and spend your money on expensive tech or an office space, because you think it will make you seem more legit. We see so many people spend money on things because of optics, I promise that a cooler looking invoice won’t make you a more successful business.
I’m not immune. When I started, I opened a “cool”, expensive, corporate card because I thought that’s what you did. Now that I understand my business, I am back to a free option that works best for my business. And guess what? No one cares as long as I’m paying.
“Because all my friends are doing it” didn’t work with your parents when you were a kid, and it doesn’t work now with your business. Don’t get “shoulded”, do what’s right for you. Ask these questions to see if you’re spending for the right reasons:
- What is the justification for the spend?
- Can you afford it?
- Can you justify it to me?
I don’t need much to run my business, a computer, some software, and a phone. But I don’t need the iPhone 14 Pro. Sure I may want one, but I don’t need one. That’s one of the biggest issues I see when going through clients’ P&Ls, their definition of need is often my definition of want. So ask yourself if it’s a need or a want. Be ruthless. And if you can’t be ruthless or you don’t trust yourself to know the difference between a need and a want, hire someone who does. (HINT HINT: it’s me!)