7 ways spending now will save money later

Paradox of thrift

If you can keep your head when all about you are losing theirs is very true of times like these.

In this blog post, management consultant Naomi Clews discusses 7 ways your business can spend now to save in the future. ​

The paradox of thrift (popularised by Keynes) states that spending may help and saving may hurt an economy. 
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If a population decides to save more money at all income levels, total revenues for companies will decline causing high unemployment and eventually, lower economic growth.
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As many economic downturns are demand-based, exercising thrift now may not be good for the economy as a whole.

How can a business spend now to gain a competitive advantage in the future? Below I suggest 7 investments that businesses can make now that will pay dividends in the future. 

#1 Swap to a Multi-Functional Device (MFD) 
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The cost of individual printers and creating paper documents is seldom understood.

For example, there is a cost associated with each and every printer: paper, ink, electricity, maintenance, insurance. 

People who have to leave their desk and walk to a central printer may be deterred from printing unnecessarily.

It may also prevent any use of company printers for non work purposes.  

#2 Stock up on inventory 
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This strategy works on the assumption that the goods you buy now will cost less than the same goods will cost in say 6-12 months time. 

However, it's essential that you consider the opportunity cost, have adequate insurance for increased inventory and an effective stock rotation and stock forecasting system in place, to manage the additional stock. 

This will help to avoid wasting money through obsolescence stock and/or unnecessary storage costs. 

#3 Prioritise quality over quantity   
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Spending more money today (on quality goods with an extended warranty, or ability to be repaired, maintained) will cost less money over the products life cycle than continually buying cheaper products that break/fail and fuel a disposable, throw away culture. 

Better still, buying goods from a supplier who offers a buy back service (at the end of the products useful life) is a win for you and a win for the environment.

​The product avoids landfill and continues to have a useful life elsewhere, either as part of a new product or in a new sector.  ​

#4 Find services with useful free perks 
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When buying services and deciding where to bank, which accountants to use or which business insurance to buy, it's worth checking what perks and additional services are included in the premium/price.   

For example, banks that offer free accounting software and insurance  and insurance companies who offer free access to legal advice may appear more expensive at first glance but if you are already paying extra for the free perks, this could save you money in the long term.  

#5 Always pay on time
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If you pay your suppliers on time now and maintain good financial records with them you will be in a stronger position to ask for extended payment terms later, if you experience cash flow difficulties. 

Nobody wants to lose a good customer, and generally an extended payment agreement can be reached if you have previously always kept your accounts in good order.  

#6 Learn new skills 
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Investing your time (which is also money) in learning new skills now to save money later, makes great business sense. 

For example, when I launched my business in 2016, I could not afford to hire a website designer and a marketing company to manage the website for me.

Instead I found a low cost website builder and invested my time in learning how to build my own website on a shoestring budget. 

#7 Invest in your staff 
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The recruitment of new staff, induction and training is expensive. 

A toxic culture where employees feel under valued and over worked is a playground for recruitment consultants, who will happily target all your employees until there are none left. 

By investing in your staffs well-being and professional development today, you can hopefully build a culture where employees enjoy working for you and want to stay for the long haul.

About the author
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Naomi Clews

Naomi Clews, management consultant and owner of boutique procurement advisory firm Naomi Clews Consultancy Limited has 30 years experience, knowledge and skills of how to better manage an organisations spend and contracts. Find out more here.