“You have to spend money to make money!”
This is truly one of my least favorite sayings. It tends to come from business people who currently have money. You also need to have money to spend money!
I admit, I also made this statement in the past. If I were to be honest, I said this only AFTER I started making good money.
My business took off while I was being the stingiest because I had no money to spend. But I was smart about what I spent and where I spent it.
There are some major caveats to the connection between spending money and making money that we don’t talk about enough.
First, you shouldn’t take bad risks. If you have very little income, I would not advise that you bet it all on your vision. For every success story of someone who took this approach, there’s a long line of financial hardship.
Instead, I’d start first with taking a look at where you spend money. Eliminate what you don’t need. Investigate where you truly NEED to spend money to grow. Invest smartly and efficiently in that area.
I spent very little money early, but the money I did spend was on Facebook ads, a CRM, design, and website hosting.
Second, you can absolutely throw money away when you have it. Looking back, I spent money stupidly when I had more to spend. I thought this was what I was supposed to do. I felt I needed to invest in every software and technology.
But I didn’t truly benefit from most of the things I spent money on. I was wasteful and inefficient.
Sure, you have to spend money to grow. It doesn’t have to be a lot. A tight A budget is an amount you're willing to spend on your Facebook campaigns or ad sets on a daily or lifetime basis. More will slow the potential speed of your growth.
But spending MORE is far from a guarantee that it will benefit you. Be smart about where you spend your money. Have laser precision in the areas where you should invest.
And don’t let people with money tell you how you aren’t spending enough.