• Richard Blades

Investment Vs Expense

How would you decide?

It is said that when you are in business, "you have to spend money to make money". It is a cliche that has been bandied around from time immemorial. What does that mean? In business, spending has been categorised into investment and expenses. Still many who are in business have not yet made the distinction between the two.

Sure, you are looking for an article that will spell it out for you; and I will not do so here. I will present some thoughts though for you to have a read and hopefully engage in discussion. This way, you should be able to benefit from the collective thinking of others rather than be subjected to my opinions presented as facts.

  1. A training opportunity has come up and it is priced at US$350 to attend for the day. You have seen the agenda and the information being presented can really give insights and provide sound information that can move your business to the next level. You agonise over the attendance fee despite the benefits for your business. Is it an investment or an expense?

  2. You have the opportunity to get information for your business that would provide you with marketing research that would enable you to plan your competitive advantage. Unlike the information readily available on the internet which is around 5 years old from the most recent sources, this marketing research comes in the form of a report just completed for your region and is just less than one year old. The report though is priced at US$500.00 to obtain. There are no free sources and the only access is to pay for it in order to access the one off download. Once again the question is posed: Investment or Expense?

  3. Your business has been struggling for most of the year and you've only just managed to get "big" contract that provided significant revenue. You learn that one of your favourite performing artist is going to be in your area for a one night only performance. Everyone you know will be going, including people you were hoping would do business with you. The tickets, outfit, transportation, and associated funds for entertainment including the after party sum US$850.00 and you try to settle it in your mind that you can gain potential business there. Will this be a worthy investment or an expense in a doodad?

Weighing the consequences of your decisions

I will stop at these three scenarios to allow you time to really think about yourselves in these situations and what decision(s) you would take in each and why! Please participate, there are others who would love the benefit of your feedback. Please keep it clean as youth would also be reading here as well.

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