Spend your money on the product and the customer’s experience

Hey, it works and the customers are never going to see it

Do you like fast cars, a glamorous lifestyle and the adoration of the masses? If so, business is going to be hard for you.

As a business owner you quickly learn that the scarcest resource is cash, and without it life is very hard.

You will rapidly learn to use your meagre savings on only those things that make a difference.

For example, it is not uncommon to see retail shops that are modern and appealing in the shopfloor and look like an industrial nightmare out the back, with second hand shelving and furniture.

Offices in the best buildings, overinvestment in fitouts, buying buildings and assets when you could rent or hire, encouraging a high flying lifestyle – all these things are warning signs for yourself and your potential investors.

To put it as simply as possible, you need to make your product look professional and up to date, plus you need to make it as easy as possible for customers to find your product and buy it. This is where you should spend your money.

Smart investors also think about this too. Venture capitalists traditionally insist that all funds are spent on the business and that there is no repayment of existing debts or rewards for the founders. They are providing capital to grow the business and want you to see the rewards when you succeed.

Ration your money and use it where it makes a difference.