Two Key Factors to Keep in Mind When Considering Business Spending

Running a business means constantly making financial decisions. Some are small—like whether to upgrade office supplies—while others are major investments, such as equipment purchases, hiring staff, or adding new technology. Regardless of the size, every spending choice has the potential to either move your business forward or set it back.

The challenge? Too often, business owners spend money without a clear strategy. This leads to waste, regret, and unnecessary financial pressure. To avoid this trap, you can filter every financial decision through two simple but powerful questions:

1. How will this purchase help the business make money?
2. How will this purchase help the business save money?

By consistently using these two filters, you’ll gain clarity, reduce costly mistakes, and make smarter investments that elevate your business.

1. Will This Purchase Help My Business Make Money?

At its core, business spending should either generate new revenue or strengthen the path toward earning more in the future. When evaluating purchases, ask yourself:

• Does this directly increase sales? For example, a marketing campaign, sales training, or customer acquisition tool.
• Does it improve efficiency that leads to higher output? Such as upgrading to faster equipment that allows you to serve more customers in less time.
• Does it enhance customer experience or loyalty? Something as simple as better packaging or improved software may encourage repeat business and referrals.

A clear example: investing in a customer relationship management (CRM) system may not produce immediate sales. But over time, it allows you to track leads, follow up effectively, and close more deals—helping the business make money in a structured, repeatable way.

The key is to connect each spending decision to a tangible way it drives income, either directly or indirectly.

2. Will This Purchase Help My Business Save Money?

Not all valuable spending increases revenue; sometimes the smartest move is reducing costs. Ask yourself:

• Does this purchase lower operating costs long-term? For example, energy-efficient equipment, bulk purchasing, or automation tools.
• Does it prevent mistakes or waste? Quality training, software systems, or compliance measures can protect you from expensive errors.
• Does it save time (which is money)? If a tool reduces hours of manual work, it frees your team to focus on higher-value tasks.

For instance, outsourcing payroll may look like an added expense. But if it reduces errors, saves you hours of bookkeeping time, and avoids IRS penalties, then it’s ultimately a money-saver.

Remember: saving money doesn’t always mean cutting costs. Sometimes it means spending strategically to avoid larger costs later.

Why These Two Questions Matter

Running decisions through these two filters—make money or save money—forces you to think beyond the immediate purchase. It creates discipline in your financial habits and helps you resist the temptation of “shiny object” spending.

Many small business owners fall into the trap of buying things that feel necessary but don’t add measurable value. By asking these questions, you protect your cash flow, focus your resources, and ensure every dollar you spend has a purpose.

When applied consistently, these two questions can transform your business. They help you:

• Reduce wasteful spending.
• Increase profitability.
• Build financial confidence in your decision-making.

Final Thought

Every dollar in your business should work for you. Before you spend, pause and ask:

• Will this help my business make money?
• Will this help my business save money?

If you can’t answer “yes” to at least one of these, it may not be the right investment. By sticking to this discipline, you’ll strengthen your financial foundation and set your business up to truly thrive.