How safe is your business from your spending habits?

The new iPhone launched last week and like many of you I’m excited to get it. I’m still on an iPhone 4 (stupid 3 year contracts in Canada) which is a bit slow and getting long in the tooth. I really notice the speed when I have to do something on my wife’s 4s.

Despite that excitement I don’t have one yet and I’ve set a deadline of Oct 1 before I’m allowed to make the purchase.

Hype hype hype

It’s so easy to get caught up in the hype of a new gadget without evaluating the real business case for it.

99% of the time I’m at a computer that has access to iMessage, Twitter, ADN, Byword and email. So really what does the speed of a phone matter to me? I can check Twitter faster (and maybe more often) in the evening when I should be hanging out with my kid.

Not a selling point.

Business Use

The true business use of my phone is the occasional inquiry from a possible client. I might get a call instead of email one or two times per month.

After that I use it to add/refer to tasks in OmniFocus. Jot a blog post idea down in Byword. Check email when I’m away from my desk during the day (not often). Finally read RSS feeds.

Few of those things really make me actual money or increase the profitability of my business.

That means getting a new iPhone 5s is really about me turning down my frustration a bit for the small amount of time I do use it after normal office hours.

Now I’m not saying that I won’t be at a store on Oct 1st getting a new phone I’m just saying that if I was to evaluate it as a strictly business use decision I don’t need it.

You’re a business owner now

As a solo freelancer or small business owner it’s so easy to just get the stuff we ‘want’ without evaluating the actual business case for it.

Do you really need a new laptop every year?

Do you really need to have expensive speakers at your desk?

Do you really need each new ‘cool’ piece of software that comes out?

I’m all for trying new things out and seeing if they fit into your workflow if you set a budget for that. I allow myself a $50 iTunes card each month and when it’s gone it’s gone.

That means I have to really evaluate each purchase to see if it’s something I really need or just a want. Before I had that limit I was spending $50 a month most months and sometimes 2X or 3X that.

That budget has saved me at least $300 this year. I simply decided I didn’t need to spend the money on the latest cool app people were talking about. The thing I wanted at that exact second wasn’t really a good business decision and once the next month came around I had cooled off enough that I just didn’t care about it.

How I evaluate business expenses

I’ve talked before about how I evaluate ROI on services and the same basics apply to all of my purchases.

By purchasing PHPStorm for $50 a year I save hours and hours of time each month. The speed of the tool increases my productivity so much that it would easily be worth twice as much to me.

WP Migrate DB Pro saved me the cost of the developer license in the first week. Moving sites is so fast now and I don’t have to kill time with MySQL queries to change the URL in the database.

Both of those have huge returns in my business and I’ll happily keep using them and paying for them yearly.

Way too often as solo freelancers and small business owners we either just spend money without thinking about the ROI or we don’t spend money because it seems expensive. Sure WP Migrate DB Pro may seem expensive for the developer license but when I figure it saves me an hour a week that means I saved about $5k in a year.


Do you have a cool off plan?

How do you evaluate your purchases that are ‘for the business’?

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