This article was written by WeddingWire Education Guru Alan Berg, CSP. Alan has over 20 years experience in wedding related sales and marketing, and is an author, business consultant, a member of the National Speakers Association, and the wedding & event industry’s only Certified Speaking Professional®. Learn more at alanberg.com.
As we approach the end of another year, it’s often time to reconcile our finances. We need to get our books in order, so we can do our taxes (I know, yuk). Then comes the scramble to find the deductions you qualified for over the year. While doing so, it becomes easy to focus on our expenses. For some of us, it’s time to re-evaluate those expenses as we prepare for the coming year.
These insights will help you get a handle on your financial planning needs and help you take control as you plan for the future!
Expenses vs. Investments
The danger in focusing only on expenses is that you can lose focus on the bigger picture. The only money you can save is the money you spend. It’s a finite amount. You can’t make all of your expenses disappear. You have to buy gas for your car, and pay for telephone service, internet connection, electricity, and more. But those are expenses, not investments. Expenses are things that you pay for, where you don’t expect any return other than what you bought (gas, electricity, phone service, food, etc.).
Investments, on the other hand, are things that may, and the operative word is ‘may’, provide a return that’s greater than the value paid. When you invest in a new employee, you would hope to get more value than what you pay them. When you invest in a new website, you would hope to get more value than the cost of the website. When you invest in advertising and marketing, you would hope to get back more than the value that you pay. When you invest in a new location, you would hope to get back more than you invest.
What you need to focus on is getting the best return. The opportunity cost of not investing is the money you could make if you did. Sometimes, that means doing more than just paying the bill. For instance, if you buy a booth at a wedding show, and don’t take the time to design your booth correctly, and invest in great email/direct mail follow up, and actually do the follow up, you’ll never get the most return from that investment. Similarly, if you take a new office/warehouse space, build it out and decorate it properly, but don’t invest in marketing to let people know about it, you’ll never see the full return.
Go Big, or Go Home