How do you weigh whether or not you should make a large purchase for your business?
Ask these questions:
1 – Will this save as much as it costs? This is a simple ROI calculation that can often be difficult to do. There are usually hidden costs. And there are sometimes hidden benefits. There are ALWAYS hidden headaches. Your ROI needs to be a resounding YES to make a large capital expenditure.
2 – Will this cause more work? New equipment, new online platforms, new fridge for the break room…all of these might cause more work for you or your employees. Some of them might cause less. Try to be as realistic as possible about this before the purchase. More work doesn’t mean you shouldn’t do it, but it should always be considered as part of the ROI calculation in #1.
3 – Will this make a tremendous difference in outcomes for my clients, my employees, or myself? Unless you are replacing non-functioning equipment that is necessary for your work, this needs to have a strong affirmative answer. Period.
This is how you avoid buying the business equivalent to a treadmill in your bedroom that is now used as a clothes rack.