Be Ingenious

One of my mentees is a manufacturer’s representative for the paper industry. After two years of hard work, he began seeing some positive results. He immediately wanted to hire one of his CPA friends as VP of finance. 

“How many accounts do you have?” I asked.

“Six.”

“Why do you need a full-time VP of finance or even a CPA? You sell capital equipment. There are not that many transactions. Just use Quicken or plain old Excel for book-keeping.”

Whenever there is a temptation to expend money, one time or recurring, ask yourself,

“Do I really need this?”

“Is there a cheaper alternative that will be as effective?”

“Do I really need full-time people, or will part-time people do?”

“Do I really need a $500,000 construction loan, or is $200,000 (or $50,000) sufficient?

“Do I really need formal office space, or can I work from my basement? Can I share office space with someone?”

You can ask these questions for just about any business facet. Expend capital step by step. Tie investment to events or results. “We will hire another employee once the revenue exceeds $10,000 a month consistently for six months.”

Be ingenious. Many of today’s world-class companies started in a garage or basement.