In Times of Crisis, How do You Spend?
By Rock Paper Simple // May 23, 2012
In the book, “Midas Touch” by Robert Kiyosaki and Donald Trump, a story is put forth about a company that borrowed $27,000 during a time of low sales and the CFO/CPA of the company spent it on paying off old bills when he should have spent it on purchasing more product to sell. This resulted in stagnation… with no new income, the company was in no better position and would soon owe just as much as they did before, but this time with a $27,000 debt in addition to the bills.
When possible and especially in times of crisis, always spend money in a way that will make you money!
As Robert said in the book regarding the CFO, “Obviously, Stanley, the CPA, did not know my rich dad’s lessons. But it was not only Stanley who was in the dark. Most people do just what Stanley did. They work for money, then pay bills, and save what is left over. This is why most people live paycheck to paycheck. Entrepreneurs must know how to spend money to create more money — spending time and money on marketing, advertising, and sales promotions and offering sales incentives to sales representatives.”
He continued with, “In times of crisis, for example, times when sales are low and income is low, most people tend to do what Stanley did — save money, or pay bills. This generally spells disaster. In a crisis, a time with low income or low sales, smart entrepreneurs know that they need to spend money on sales and marketing promotion, even if they have to borrow the money. When the sales start coming in, then they can pay bills and pay back the money they borrowed.”
Amazing how a different perspective can change everything, isnt it!? This from a man who knows how to make money.
Circling the wagons and “playing it safe” when your company is hanging in the balance, can actually kill your company. When sales or income is low, the #1 thing you need to do is generate fresh sales or income! Make sure every dime and every minute of your time is spent with that goal in mind if you want to pull out of that crisis.
Written by Joshua Adams at Rock Paper Simple
Joshua lives and breathes web development and internet marketing and is passionate about not only providing quality service, but also educating fellow business owners about internet marketing and web presence.