I admit that I stress over spending money. Sometimes I spend so much time trying to decide, that the cost of my time outweighs the spending decision.
About 10 years ago, I walked into Pottery Barn and found a table on the floor that said “final sale.” I looked to see what was wrong with it, but it wasn’t obvious. I asked the salesperson who said it just had a couple of scratches. I walked out with what felt like the bargain of the century. A nice dark wood table for roughly $400 from Pottery Barn. We still use it in my office today.
I felt like I should have won the “good stewardship” award. I needed a table and found a quality, classic table that would last for years.
This was a win. But, this is also an example that feeds my indecision. “Maybe if I hold out, I can get another deal like this one.”
I have so many examples of the cliche “you get what you pay for,” and I am a walking example of ignoring the saying, “time is money” to my chagrin.
Good Value is Hard to Know Up Front
At least with physical products, we can make a decision if it is worth it or not. In your business you have many purchase decisions. For the ones you can see, you are able to decide if you want to pay the price. The difficult choices come when we are purchasing a service or a product that has to be used to determine it’s value.
I have learned many lessons that I am sharing with you in hopes that you won’t make the same value mistakes that I have made over the years:
- Website and Marketing Materials – Yes, sometimes you hit a home run by finding the inexpensive freelancer or brother-in-law deal. But, you won’t know until it’s finished and usually this is the perfect example of “you get what you pay for.” I tried going the inexpensive route with one of my websites awhile back and ended up going through three designers/programmers before it was finished. When you added up everyone’s costs, I could have had a Addy winning web developer. Now that we provide website development, I try to make sure that our clients know that we are not the cheapest (and NOT even close to the most expensive), but we will ensure that the final site meets the specifications and expectations.
- Renovations or Repairs – We didn’t want to spend too much on the upstairs bathrooms at our house. We redid them years ago. Last year, we had our master bath redone by other people. It took more time and a lot more money… but the difference in the quality is night and day. We are expanding our offices right now. And although we have gotten a couple of bids on parts of it, we are going with quality because we want it to add value to our investment and to last. The most important part of the decision is to go with people you trust, regardless of the cost.
- Business Services – These are things such as bookkeeping, consulting, or even business coaching. I used to have someone do our bookkeeping for free because we referred so much business to them. We were always an after thought and not considered a real client. I now pay someone and save more time in fixing things/worrying than the service costs me. The same decision applies for lawyers and other services. Spending on a business coach or attorney feels expensive. Would you rather a cheap business coach whose business is floundering giving you advice? Or hopefully you can find a reasonably priced service with a high level of targeted expertise, who charges more, but may take less time. Or keep you out of court!
- Employee Spending – This, I admit, was hard for me, and if I’m honest, still stresses me out at times. I read somewhere that it is more efficient to delegate spending, or decision-making that has a financial implication, to others with a set limit on the transactions. For example, if a $200 mistake won’t hurt your business, then let the employee have the decision-making authority. If they are wrong, it won’t kill you and can be a learning experience. It also will save you a ton of time rather than approving every single decision. If someone continues to make bad judgement that has financial implications, then you address that situation. But if you make every $10 decision, with your input, that decision has probably more than doubled in cost.
- Efficiency and Productivity Measures – It is really hard to spend extra on things that promise improved efficiency and productivity, again, because you can’t see it up front. When we moved into our new building two years ago, I am sure I told whomever set up the phone and internet systems to get the lowest price we could negotiate. We kept having connectivity and speed problems. AT&T would come and say it all works fine. They tried adding extenders and would pretend to tweak things. But we had issues the whole time. As we added people, the internet became unbearably slow. Finally, our marketing coordinator was asking to go to the local coffeehouse for better connectivity. After years of cussing and discussing, I finally gave in to a new provider and a more-than-50% increase in cost monthly. But, we are still talking about only $50/month. The difference is amazing. I have given in to other costlier decisions, yet, again, they have saved so much time and mental distress.
I think the prayer here is to ask God for wisdom and discernment in these decisions. Yes, the Lord wants us to be good stewards of the resources He provides. And, I am not suggesting if you are a penny pincher like me to give it all up and become a spend thrift. That is why we need discernment.
I labor over spending decisions, but I don’t like cheap and poor quality products or services. For me, I have learned it is more about opportunity cost. What do I think we need for the business the most? What is the best quality for what we need? Can we afford it?
The True Cost of Things
I don’t believe in going into debt for luxuries. And sometimes we have to go with lower quality because we don’t have the money at all and we need the product or service in our business now. If it is something we would like, we may have to wait until we can afford it. But, if we have the money, and just don’t want to part with it, we need to consider:
- all of the costs of our time (expensive)
- the expertise we may be purchasing that we don’t have in-house (can’t NOT afford it)
- the satisfaction level of getting what we thought we were purchasing. (priceless)
I am getting a little better over time. I am trying to learn from my poor choices. But, I have to admit, every time I walk into Pottery Barn, I go look to see what floor models they have on sale!
What other decisions have you made in the name of good stewardship that cost you in the end?
Ethan Chabert says
Great post! I think we are all guilty of over-spending our most valuable resource (time.)