If the spending is to improve service, reliability, or anything pertaining to the actual product, then the answer is generally yes
You Need to Spend Money to Make Money. Agree or Disagree?
That depends on what spending money means. If the spending is to improve service, reliability, or anything pertaining to the actual product, then the answer is generally yes.
In the service industry, the staff is the greatest asset a company can have, and adding staff to ensure that service is better is often well worth it. You certainly need to spend to get the best people that will help your business make money. Investing in them is so important, though that doesn’t always mean salaries. Investment can include training, work-life balance, or creating a relaxed atmosphere.
Spending on marketing and branding is a different story. This is industry specific; certain industries need this expenditure to increase sales. While branding is usually important, it’s hard to translate branding into direct dollars earned. It does, however, give the product or business name recognition, which can increase revenues.
—Azi Mindick, CPA, Chief Financial Officer, Riverside Abstract
You need to earn money to make money. The “you need to spend money to make money” mindset can lead to unnecessary spending and be destructive if left unchecked.
There are times when spending money now can earn you money later. But it’s important to approach spending in a balanced way. Before you spend money ask yourself: “Will this expense bring value to my company?” If it does, go for it!
—Yitzy Friedman, Principal Designer, YF Designers
IN a business setting I agree. For a sole proprietor or freelancer, I disagree.
With a freelancer, the focus should be direct sales and keeping the cost of operation low.
By contrast, when you are building a company, you want to keep yourself working “on the business” versus “in the business,” and for that you usually need to spend some money.
When I started Nail It Handyman, I had two options.
Option one was to hire someone to do all the office work, while I would do the actual handyman work. Option two was to hire someone to do office work and hire someone else to do the handyman work while I would oversee them both and try to grow the company.
Option one is me working in the business (saving money) with no time left to work “on the business,” trying to grow it. I chose option two, working “on” the business, and spent all my time growing and fine tuning the business.
—Jake Guttman, CEO, Nail It Handyman
Raise the Subject: What is the best way to ask for a raise?
DO your research well. Find out what the industry is currently paying for your position (not what they paid six months ago, but what they’re paying today). Network among friends, recruiters, HR departments and even job sites to get a clear picture.
The job market is unpredictable right now; layoffs are happening. If your position was adjusted or you took on additional responsibilities, that’s great leverage for your negotiations.
If your position is the same and your salary is within the range of industry standard, you have to think smart. While yearly raises are a perk that some companies offer (with an average yearly raise of 4.5% to 5%) they aren’t a given; there is no law that mandates yearly raises.
Proper negotiating skills is an art, and whining about the cost of inflation and mounting bills is not the correct strategy. Instead, advocate for yourself by listing your past accomplishments and future goals. Stay positive and focused throughout the negotiations and allow room for flexibility.
—Faigy Ort, Director of Women’s Job Placement, Agudath Israel Professional Career Services
Keep track in writing of your accomplishments, goals met, and money saved to the company. Bring along this “ammunition” to your yearly meeting to show your employer your worth. Show him how dedicated you are to the company.
Also, express how appreciative you are to have a job in the company and how much you like working there (only if it’s the truth). When an employer sees how committed you are to making his company successful, and that you appreciate having a job in his company, he’s more likely to give you a nice raise or bonus.
When you walk into the boss’s office and request a raise just because your friends are making more money or because “it’s the going rate,” it’s less likely that he’ll give it to you. Even if he does give you something, it’s because he’s nervous that you’ll leave and not because he believes you deserve it. In the long run, the former approach is more beneficial.
—Racheli Eisen, Founder, IZN Recruiting
(Originally featured in Mishpacha, Issue 957)
Oops! We could not locate your form.