We all know the adage, that life is all about the attitude and perspective taken. We are constantly encouraged to look at situations in life and business through a different lens or from a different angle. Sometimes we are too close to the situation or activity to see clearly the correct actions and steps to take in resolving an issue or challenge.
Having said this, I have been thinking recently more so the attitude and perspective taken by business people when it comes to the expenses incurred. So many small business entrepreneurs are always talking about how they can expense so many expenses for tax reasons, but perhaps they have taken this attitude a little too far.
If you took a poll, almost every business person would rather invest money into the future of the business health than pay a bill or expense. Expenses are seen as money leaving the company and reducing profits.
Some expenses just overlooked are in fact investments. It is my belief that an investment is anything that will bring a return on the money spent or invested. So if you spend $10, that $10 allows for you to generate more than $10 back in revenue, with the difference being profit. I have always taken the total return perspective, where the profit is measured against the total investment into the business activities, services and products. I have always wanted to see a return on the funds put to work and see a better return than I would putting that same amount of cash into the bank savings account.
Paying your electric bill is most likely viewed as a necessary evil cost, however if you take a step back from the immediate up close picture and adjust your thinking, without the electricity, you can not operate a business and generate a profit. The funds used to pay for the electricity are an investment into the company, and without the investment there can be no return!
Perhaps when you see some outgoing payments as investments into the operation and health of your business, you will not only pay the expense with less of a grudge, but you will be looking and expectantly waiting to see the return on your investment!
Having said this, I have been thinking recently more so the attitude and perspective taken by business people when it comes to the expenses incurred. So many small business entrepreneurs are always talking about how they can expense so many expenses for tax reasons, but perhaps they have taken this attitude a little too far.
If you took a poll, almost every business person would rather invest money into the future of the business health than pay a bill or expense. Expenses are seen as money leaving the company and reducing profits.
What is the difference between an investment and a expense?
Some expenses just overlooked are in fact investments. It is my belief that an investment is anything that will bring a return on the money spent or invested. So if you spend $10, that $10 allows for you to generate more than $10 back in revenue, with the difference being profit. I have always taken the total return perspective, where the profit is measured against the total investment into the business activities, services and products. I have always wanted to see a return on the funds put to work and see a better return than I would putting that same amount of cash into the bank savings account.
Paying your electric bill is most likely viewed as a necessary evil cost, however if you take a step back from the immediate up close picture and adjust your thinking, without the electricity, you can not operate a business and generate a profit. The funds used to pay for the electricity are an investment into the company, and without the investment there can be no return!
Perhaps when you see some outgoing payments as investments into the operation and health of your business, you will not only pay the expense with less of a grudge, but you will be looking and expectantly waiting to see the return on your investment!
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