Where to Splurge, Where to Save

In any business, there are things you try to save money on, others, you spend what it costs. For example, you might try to pick up your desks on clearance sale, but spend what it takes to get good lighting. Or, you might buy refurbished computers for your workstations, but have the top-of-the-line servers for your website.

However, in looking at a business, you can tell a lot about the people running the business from how they spend money. The miser spends not a penny more than the minimum on everything. The irresponsible never shops for a deal.

The wise owner? She is the subject of this article.

The wise owner will sometimes ignore the cost, because it’s either irrelevant (for example, saving a few dollars on a lamp that took an extra hour of your time and a few dollars worth of gas driving to pick it up) or because having the right item is more important (for example, anyone sitting at a desk for long hours must have a proper chair regardless of the cost).

Other times, however, she’ll look for savings, because the effort to save is minimal (for example, ordering books online from one of several retailers takes seconds to look up and can save dollars each time), or because the dollar figures are significant (for example, spending thousands of dollars on a new server can have savings worth several hundred dollars by shopping around), or because the item itself is not relevant, and therefore not worth the expense (for example, the foosball table for your employees to mess around with doesn’t need to be brand new).

In any business, what falls into each category is important. Some business owners, though, when asked about a particular item they are purchasing, can immediately tell you if they’ll look for savings. Others will make a comment about waiting for a sale (which is, of course, saving money by waiting). But there are many who will just make the purchase immediately, regardless of the item.

So which type of owner are you? Do you try to be frugal, at least at times? Are you always frugal? Or do you spend freely, and hope that the money to pay for everything will always be around?