From today until the new year, will be inundated with sales and special offers from retailers. It’s very easy to get caught up in the excitement of all the different deals.
When it comes to your business, it can be easy to rationalize purchases that you have either deferred or, perhaps, not even considered before. The problem is, you can end up with things that don’t serve your needs, because you didn’t put a lot of thought into the purchase.
Throughout the year, especially now, I use a decision-making matrix that I applied to business-related purchases, especially large ones.
Here’s how it works. I first ask myself the following questions:
Will this purchase…
- Directly increase revenue and profitability?
- Decrease expenses?
- Directly enhance productivity?
- Improve safety/avoid injury?
- Enhance professional satisfaction?
Now criteria #5 is a “soft” one; if this is the only criterion that my contemplated purchase meets, but I don’t make the purchase. But if the purchase needs one or more of the preceding four criteria, then the purchase gets a “green light.”
I found these criteria to be very helpful for keeping me from making an impulsive purchase and wasting a lot of time and money in the process.
You may have other criteria by which you make your purchases and investments in your business. I’d like to hear some of those; please leave them in your comments below.
In the meantime, if you apply the simple criteria to purchases you make today and moving forward, they’ll help to keep your business in the black.