The 12 questions you should ask before making any business purchases

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The 12-step checklist that we use every time we’re about to drop moolah on business purchases!

 

For those of you who don’t know, my husband Jason left his day job at a law firm to come and work with me full-time at NBBS last year. When that happened, shit got real, as we started to build what is essentially a family business together. We have never looked back, and this was one of the greatest decisions we have ever made – and as time has gone on, we’ve realised that all the great decisions we have made (business or otherwise) have been because we made them as a team. Jason and I are like chalk and cheese – I’m ballsy and creative, while he is level-headed and practical, and it works like a charm because it means our business decisions and business purchases are bold, yet well thought-out.

As part of #nbbsmoneymonth, we thought you guys would be interested in reading about the process we go through before investing in something for our business. As parents, we’ve learned to be responsible with money, so we never spend money whimsically – instead, before making the purchase/investment, we ask ourselves these 12 questions…

Pinterest graphic for 12 questions you should ask before making a business purchase blog post

 

1. Do we already have it?

It’s really easy to get caught up in hype, especially with a new piece of technology. But we always ask ourselves, is this actually significantly better than the one we already have? Is this upgrade necessary, and is it actually going to enhance our business? The key is to think logistically rather than getting excited.

2. Have we done the research?

This is super important to us before making a purchase or investment. We always make sure we have researched whatever item/service we are considering to make sure that it’s going to truly benefit us and give us what we need so that we’re not left regretting the decision. We ask our insta followers, watch youtube reviews and if it’s a piece of equipment sometimes we will check ‘which?’ too.

 

3. How is this item/service different?

When it comes to being a small business owner, you’re always trying to stand out from the crowd. So most of the time our purchases reflect that, and we try to ask each time if this investment is going to set us apart from the rest. This rings particularly true when we are hiring people for our team – we want people who stand out and who will help us do the same.

 

4. Do we NEED it?

I think we all ask ourselves this one, right?! But this is the best way to make practical purchases. We always ask ourselves if we can work without this purchase, but we also think ahead in terms of investing for future projects. Is not having this item/service going to hold us back from securing paid work in the future?

 

5. Is it going to make us money?

In an ideal world, every purchase you make would bring back future revenue – I mean, that’s the whole foundation of investing! But the reality is that sometimes we make silly purchases, or we have to spend money on getting a washing machine fixed instead of on our business. At least with our business, we have power over what we spend our money on, so we try to make sure that every expense is going to bring us either short-term or long-term revenue. For instance, a new camera lens might help us secure a future job by showing a client the kind of high quality work we can produce.

 

6. How much is it?

The best thing (and equally the worst thing) about running your own business is that you’re directly in control of how much money comes in and goes out every month. This means we really need to be on top of our P&Ls and always be thinking one step ahead. Usually, if we want to assess whether or not we can afford something, we ask if it is more than 10% of our bank balance – we rarely ever spend that or anything over it. We also ask if our projected income for the following month is going to sufficiently cover the expense.

 

7. Is there a clever way to finance it?

This is where we try to think smart. Is this something we should pay for in full, in cash, right now? Or is it better on a finance deal with low interest to spread the payments and help us predict cash flow?  Every purchase is different, so its important to weigh up all of the options. If you do finance something then make sure you have looked at what you will end up paying overall with interest added. Is it worth doing? For instance, one piece of software we just invested in cost around £17 a month if we paid for the whole year upfront (£204). If we paid month by month it was £29 a month which worked out to £348. We saved around 40% by paying for the whole year upfront so it made sense to us. Also, this tool was ticking all the other points on this list 😉

 

8. Can I pay it off with an upcoming project?

One of the best feelings ever is when I’m able to pay something off in full with money from a project I’ve done. It’s like direct results, and so I try to do this with most big purchases, though it’s not always an option! This is the idealistic way to pay for something new, so I revel in those moments whenever I can!

 

9. Can we make it cheaper?

One of the perks of being an ‘influencer’ (I hate that word) and having contacts in the industry, is that I’m often able to get discounts or freebies on stuff, especially if it’s related to my interiors business. Wherever possible, I’ll reach out to brands and people I want to work with to see if they’ll cut me a deal in exchange for coverage or content, to make sure both parties benefit, even if not from direct monetary value.

(Pssst! If you’re new to the industry, you can download my free email template here to help you reach out to brands for free stuff!)

 

10. Is there a sale coming up?

When I knew I needed to take my photography to the next level in order to up-level my content, that required new equipment. My old Olympus Pen had served me well until that point but I needed to invest in a better camera in order to get the shots I wanted (you can read more about my camera equipment setup and why I upgraded here). As always, we went through our checklist of questions, and I realised that Black Friday was coming up – BINGO! It always pays to be a bargain hunter, so think ahead and make sure you’re getting it for the best price!

 

11. Can we sell something to offset the cost?

The whole concept of ‘out with the old, in with the new’ and ‘one man’s trash is another man’s treasure’ ring so true here! Jason and I (mainly Jason) always try to keep a clean, uncluttered house, and so when we’re about to invest in a material possession, we like to assess what we already have and see if we can sell some of our old stuff to make room for the new item. It kills 2 birds with one stone, as you make back a bit of money as well as de-cluttering!

 

12. Have we waited a month?

Impulse buying is a real issue, so we really have to impliment self-discipline when we are about to splurge some cash! We have a ‘one month rule’ where we have to wait a month to see if we still want/need this thing – its crazy how many things we have realised we didn’t need using this rule!

 

Follow NBBS on Instagram for more No Bull money and career advice @nobullschool

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