We’ve got to stop throwing money at business problems as our first response. Why? Every business goes through cycles of change and different phases as the business grows – and we need to know where we’re at.
You begin as a start-up, and you’re often a one-person show for a while. But as your business grows, you move into needing a team to support you when there is more to do than time available.
As you scale into the multi six-figure mark (around $500K), you’ll find that you’ll need to create systems and processes in order to improve productivity and manage all there is to do.
Then, when you get to 7-figures and beyond, the business once again needs something new to support growth. It could be more people, better systems, and some automation so you can focus on scaling without dropping balls.
In every one of these situations, your first instinct will be to hire more help.
Don’t do that.
Business Problems and Rookie Mistakes
Throwing money at business problems without diagnosing and assessing what is causing the problems is a costly rookie mistake.
When you throw money at a problem instead of assessing the situation carefully, you’ll find temporary relief, sure. But it won’t be long-lasting. And you’ll never get that money back.
Throwing money at a problem is the fastest way to erode your profits and limit yourself from future growth.Throwing money at a problem is the fastest way to erode your profits and limit yourself from future growth. Click To Tweet
Instead: first figure out what the problem is.
- Is it a bandwidth issue, or a productivity issue?
- Is it a systems problem or a capacity issue?
- It is a business problem or a people problem?
Use Strategic, Critical Thinking
As your business grows (and so does your business problems), your capacity for strategic critical thinking and problem-solving will expand and become even more important.
It’s easy to throw a band-aid on a problem by spending money, but it’s not a long-term solution that will help you grow into the next goal and the profit margin you’re dreaming about. But band-aid solutions create additional problems that you’ll need to figure out.
Do you really want to pile that on in the long run?
Stop spending money before you’ve spent time to think through why your problems are happening.
This applies to cash flow, marketing, lead generation, productivity, disorganization, you name it.
Any problem you face in your business requires your mind before you give it your money.Any problem you face in your business requires your mind before you give it your money. Click To Tweet
So, the next time a problem comes up, and it will – because that’s a normal part of owning a business – take note of your first response to dealing with problems.
What business problem are you currently dealing with, and what solution are you thinking of? Tell me in the comments below.