Money Management

Do You Really Have to Spend Money To Make Money?

By  Karen Banes

Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals and firms that pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals and firms not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

We’re often told this in business. You have to spend money to make money. But how true is it? And what exactly should you spend it on?

There are lots of times when spending money will make you money. Those who spend on education still earn more on average (although it’s possible to earn more money with less education in some professions). Spending on things like real estate, for investment purposes, is still making a lot of people a lot of money, too.

When it comes to self-employment, however, you don’t always have to spend as much as you think. I’ve written before about how you can start a freelance business with little or no investment. Online business models that involve strategies such as drop shipping mean that it’s possible to start an e-commerce business without spending out on things like inventory or premises: two of the bigger expenses for traditional retailers.

Sooner or later, however, you’ll need to spend money as a self-employed freelancer or entrepreneur. Here’s where you’ll probably want to spend it.

Training

You don’t need a lot of inventory or extensive premises to start an online business, but you really do need to know what you’re doing. You don’t need a fancy office to start a freelance business but you do need a marketable skill that you’ve mastered to the point that you can do it better than most others. Money spent on mastering that skill, and learning how to market it, is money well spent. Spending money, and time, on learning the ins and outs of whatever business model you choose is vital.

Equipment

Spending money on training was the first step I made when I decided I was committing to making a living as a freelancer. But the single best major investment I’ve made in my freelance writing business isn’t some course or training package. It’s my Mac Book air. I’m using the term ‘major investment’ loosely here. That single piece of equipment costs a fairly reasonable $1,000 or so but has paid for itself many times over. Having versatile and reliable equipment is a top priority.

The phrase ‘a bad workman blames his tools’ is meant to imply that a good workman can make do with any old tools. This may be true to a certain extent, but really, anyone who works with technology knows, tools that run slow, crash, or simply don’t do quite what they’re meant to, can really slow you down. Investing in the right computer, recording equipment, or software is generally money well spent for the freelancer or online business owner.

Advertising

People can’t hire you if they don’t know who you are or how to find you. Paid advertising is not, of course, the only way to get business. Maybe some of yours come from referrals and recommendations, pitching and cold calling, or a great social media strategy. But generally speaking, if you’ve spent out on excellent training and high-quality equipment, but still need more business, some carefully targeted paid advertising is probably a good place to put the rest of your budget

There’s a caveat. Don’t invest in advertising if you don’t know what you’re doing. It’s complicated. There are plenty of people in the online business forums complaining that advertising isn’t working for them. They’re invariably trying to cobble together an advertising campaign themselves with limited knowledge of copywriting, keyword research or targeting strategies. If you’re going to invest in advertising, you probably also need to invest in paying someone who knows what they’re doing to run those ads for you.

You still need to spend money to make money. You just need to spend it carefully. Whatever your budget, make sure you put it where it will actually make a difference.

Karen Banes

About the Author

Karen Banes

I’m a freelance writer specializing in online business, personal finance, travel and lifestyle. I also work as a content creator for hire, helping brands and businesses tell their stories, grow their audiences, and reach their ideal customers. I’ve lived, worked and studied in six countries, across three continents. Stop by my blog TheSavvySolopreneur.net to learn how to run your own (very) small business on your own terms. You can also connect with me at my website KarenBanes.com or follow me on Medium.com


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Disclaimer: In order to make Wealthtender free for our readers, we earn money from advertisers including financial professionals and firms that pay to be featured on our platform. This creates a natural conflict of interest when we favor promotion of our clients over other professionals and firms not featured on Wealthtender. Learn how we operate with integrity to earn your trust.

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