Are Your Consultants and Financial Employees Spending Wisely?

In my 30 years of observing businesses, one truth stands out: no one watches expenses as closely as the owner. Too often, consultants and finance employees believe that spending money will automatically bring in business, leading to misguided decisions that can jeopardize the company’s financial health. Here’s why owners need to stay vigilant and keep a tight grip on spending:

1. Owners Have the Most Skin in the Game As the owner, your financial well-being is directly tied to the success of the business. Unlike hired consultants or finance employees, you feel the impact of every dollar spent. This personal stake makes you naturally more cautious and diligent about where the money goes.
2. Business Success Requires Sales, Not Just Spending Every business is, at its core, a sales business. Simply spending money on life insurance, new hires, or borrowing to expand won’t guarantee success. Clients and customers don’t just walk in because you’ve invested in the business; they come because you’ve actively gone out and landed them.
3. Run a Lean Operation Until You Have Customers The best approach is to run a tight ship until you have a steady customer base. Only then should you consider spending more to simplify operations or scale up. Premature spending can drain resources and create unnecessary financial strain before your business has a chance to grow.
4. The Biggest Cause of Failure: Ignoring Expenses The number one reason businesses fail is not paying attention to expenses. It’s easy to get caught up in the excitement of growth and expansion, but if you’re not careful with spending, those ambitions can lead to financial disaster. Keep a close eye on every expense and ensure that every dollar spent contributes directly to your business’s success.

Disclaimer: This article is for informational purposes only and does not constitute business advice. Always consult a professional before making business decisions.