Businesses and non-profits often make this mistake: they refuse to spend a few cents to save a dollar. That’s because we think—incorrectly—about money and time in different ways.
First off: money and time are both resources, and we need to plan for them accordingly. But they aren’t the same. They aren’t even convertible into each other. Don’t believe the old saying that time is money.
Instead, recognize that the relationship between time and money is a bridge called productivity. If you invest time, you can get things done. If you invest money, you can get things—things which in turn can help you get more done.
It’s easy enough to think of examples of this:
- It takes time to write a paper, but if you have a computer (or a typewriter) you can write the paper faster.
- You need to plan time for travel, but if you take a quicker mode of transport you’ll arrive sooner.
- You can set aside time to do your taxes, but if you call an accountant you’ll get them done more quickly and accurately.
Pretty straightforward stuff. So why is it that we are “penny-wise and pound-foolish?” The way I see it, there are three different reasons why companies tend to avoid spending small amounts of time or money that end up costing them large amounts of time and money.
Cost Avoidance is not Cost Savings
I’ve heard these six words dozens of times from financial types and accountants. They are right: if you don’t have to pay for something that you didn’t plan to buy, you aren’t saving money. It’s like the clever psychology of the “big sale” at a department store. You don’t actually need it, so buying something that you didn’t plan to get isn’t actually real savings. You’re still spending money you didn’t intend to spend.
But, you need to reverse the statement to get at the truth: Cost savings means incurring costs. If you want to save time or money, you usually have to spend a little time or money to figure out what to do! You need to invest in whatever device, technique, training, or resource that will let you get ahead.
Visible Costs Are Smaller Than They Appear
You know how every side view mirror warns us that “objects are closer than they appear?” The opposite is true for many costs. Spending a few dollars or a few hours seems tremendously expensive in an environment where budgets are squeezed to the max.
However, that’s because you see these costs because you’re talking about them. What you don’t see is the countless hours of time people spend at their desk working on one tiny screen (when multiple monitors make a huge difference), or the tremendous ongoing expense of wasted electricity or wasted space.
In short, just because you don’t see it doesn’t mean it’s not expensive!
Chronically Undervaluing Yourself
“Hey, I can do that,” is a sentiment I often hear from business professionals. They want to step up and be helpful and say they don’t mind doing work by hand.
Stop it. If you’re the executive director of an organization, don’t take weeks off to bake for the annual fundraiser. Seriously. Just don’t.
If you work for a company or a non-profit and ever think “there has got to be a better way,” the answer is that there probably is! But you’ll need to break a few eggs to make that omelette. You’ll need to spend money to make more money.
Don’t be afraid to spend a little bit on new computers, software, or training. Be willing to invest in research, outside experts, or marketing support. Call a consulting firm to get some new ideas.
After all, something you spend money on for improving your business should be such a great deal that in the long run it’s better than free.