Editor's Note: Learn from a panel of experts and entrepreneurs who have successfully financed their own ventures and are helping others do it at the Thought Leaders Live 2013 event May 29, in Long Beach, Calif. Event and ticket information can be found here.
Your friend who dabbles in WordPress gave you a screaming deal on your website design. And your niece--a junior in college who loves Facebook--will run your company's social media accounts. Fantastic.
Give me a shout in a few months. I'd love to hear about their work. My guess? You won't have time to talk. You'll be too busy hiring a professional designer to fix your website and doing brand-rep damage control because your niece tweeted from the wrong account during an all-night frat party.
Yes, it's tempting to take the cheap route. It's scented with top notes of bottom-line-enhancing pheromones that promise to add curves to your balance sheet in all the right ways.
And you'd be a fool to walk away from a great deal, right? Not so fast.
It's time to start brushing off the allure of the cheap. Follow the path to better spending.
Take your time. When rushed, we tend to make less-than-optimal decisions. Time is your greatest ally on the value front. Take as long as you possibly can to calmly explore and analyze available options, rather than automatically writing a check for the one that's least expensive.
Get flexible. Every business owner has to stretch the budget from time to time. But if you stretch yourself too thin, you'll break. Instead, commit to being flexible and adjust your spending--when one balance-sheet line item goes up, another should go down. This will help you meet your business's needs and protect your company's longevity.
Look twice. Buy once. Real values do come along; I call them bluebirds. But every time you think one of those bluebirds is flying around in front of you, there's a chance it just seems really good because you're comparing it to a pricier bird. If the cheap choice blows up and you have to pay to fix it, your budget will blow up, too.
Sober spending leads to success for a beer-based product
When Ari Fleischer and Aly Moler were launching Frozen Pints, their Atlanta-based craft beer ice-cream company, they asked themselves one question: What is the smartest place for us to spend our startup cash in order to build this brand? The answer reflected their key concern: the quality of the product.
The food and beverage business is all about margins. Fleischer and Moler could have cut costs by whipping more air into their ice cream or by using cheaper beer in their mix, but these decisions would have adversely affected the product. They knew they needed to put high-quality, tasty concoctions into consumers' hands to keep Frozen Pints from ending up a novelty item. They spent more than two years seeking out the best ingredients and processes. Now Frozen Pints is sold in specialty stores throughout Georgia.
Sweet success for Fleischer and Moler didn't come from taking shortcuts--they cooked it up by spending their money wisely. "Focus on what your brand, company and product are about," Fleischer says. "Those answers should guide your business-spending decisions at every stage. We'll stick to buying the best ice-cream ingredients that money can buy, and buy our legal pads in bulk."
Turns out that value-based decisions can be … quite delicious.