Smart Spending Decisions: Stop Wasting Business Money

Think It’s a Good Deal? Here’s How to Know for Sure

I’ve worked in small businesses, government agencies, and large corporations, and I can tell you that no one is immune to the “shiny object” trap. It’s that irresistible promise of game-changing results from the next big thing. I once heard a CIO rave about a new ERP system, saying, “This thing does everything except slice bread.” Sounds like a no-brainer, right? On the other hand, is it actually a good investment?

Unquestionably, today’s marketing is designed to bypass logic and trigger impulse decisions before you have time to think twice. But in reality, business purchases usually fall into one of three categories:

1. Great investment – The value is clear, and it pays off quickly.
2. Maybe worth it – It provides some benefits, but is it enough to justify the cost?
3. Total waste – Should’ve never clicked that “Buy Now” button.

Read on to learn how to separate smart investments from costly mistakes—and the simple method to make better spending decisions. And here’s the best part: I’ve created something to make it even easier for you, the small business owner, to follow this method.

However, this is what happens when we make the wrong call. Let’s look at the hidden costs you might not see upfront.

The Hidden Cost of Bad Decisions (And How to Avoid Them)

We are conditioned to make spending decisions based on how an advertisement makes us feel. Nonetheless, feelings aren’t facts, and buying based on emotion alone can put your business’s bottom line in danger. Here are just a few surprises that might emerge from that gut reaction purchase.

• • Waste of money – It turns out the thing didn’t solve the problem as described. Now you have a tool that costs you money and no practical application. In this day of “subscriptions” you can minimize the damage by canceling that subscription ASAP.
  • Waste of effort – Not only did you spend your money, but you spent your time to set up, learn, and configure the thing. This is time you could have been working with clients or developing products or services.
  • Hidden costs – It was going great at first, but now training, maintenance, and upgrade costs are soaking you dry.
  • False Savings: The Cost of Going Cheap – You felt great choosing the cheaper option, but now you realize you aren’t getting the expected benefits. It’s clunky, hard to use, and doesn’t have the integration that it’s competitors do that would make your life easier

You can’t get that money or time back. But what if you could predict a purchase’s value beforehand? The good news: You can!

How to Make Smart Spending Decisions That Pay Off—And Not Bleed You Dry

In this section I will walk you through the high-level steps of conducting a cost benefit analysis to help you make smart spending decisions.

Step 1 – Identify what you need

What you REALLY need! The problem are you trying to solve. Your definition of success. Once you’re clear on this, you can evaluate options based on need, making it easier to shift from emotional decision-making.

I need a tool that will help me send emails to current and potential clients for marketing and information. Conversely, recipients need to be able to unsubscribe, so they are not getting unwanted notices from me. Ideally, this tool has some lightweight customer relationship management built in so I can keep track of these opportunities and where they are in my leads pipeline, their product of interest, or other criteria that will help get the right email to the right person.

Step 2 – What’s This Problem Costing You?

How many hours a week are you spending on getting this need met today? This is time you could be spending on clients for billable hours or developing your products and services. Alternatively, maybe the cost is in other unrealized revenue from clients lost.

I spend 10 hours a week manually following up on leads from networking opportunities. I struggle at doing this effectively without the right CRM and email marketing. My emails don’t look professional and I can’t quite keep a handle on what outreach I’ve already done per potential client.  I could be missing out on 30 new clients this year at a cost of $30,000 in revenue.

Step 3 – Investigate Possible Solutions

Now the fun begins! Looking for new and innovative ways to get things done. Undoubtedly, there is probably “an app for that” or at least someone for hire who knows how to do it quickly and efficiently. Start by asking other small business owners what they use or who they know. Google and GenAI are other ways you can search for what is out there. For each opportunity, you should consider:

• • Product or Service Name
  • Cost (monthly and/or one-time)
  • How much time it would save you
  • Past user or client reviews
  • How excited are you about its features and promises