A few months ago, I was on an old order Mennonite farm. These are the kind of folks who don’t drive cars, don’t have electricity in their homes, and wear clothes that they tailor themselves. They are the kind of folks who wouldn’t ever read this post in a million years because they don’t have internet.
One of the things that struck me when we were on the farm was that something’s that were allowed in the barn or workshop were taboo in the home. A father may have a phone, generator, or electricity in the barn (place of work), but they might not have those items in their home.
I was struck by the inconsistency.
Several weeks later, I was struggling with the fact that my frugality was a costly burden to my business.
In the business world, I’ve heard it said that time is money. And often times it is. Many times the things we do for frugality in the home require time. This time can be very costly in business.
As an example, I was at a second hand store, and I saw a neoprene sleeve for a laptop. My laptop hadn’t arrived yet, so I didn’t buy it. However, when the computer arrived, I realized that my storage space in my bag was a little big for this smaller computer so the neoprene sleeve would offer good protection. I decided to drive the 20 minutes to buy the sleeve for $3.
The only problem is that there was a Best Buy almost literally across the street. The same sleeve would have cost $25.
Thus, the question came to mind. Which is better:
- Option A: $3 neoprene sleeve plus gas money, plus 45 minutes of my time.
- Option B: $25 neoprene sleeve from Best Buy, plus 15 minutes of my time.
I realized that my hourly rate is more valuable than what I would have saved driving to the second hand store. In an effort to be frugal, I was actually costing myself and my business more. Frugality does have its place, but in business, time is an asset that must be carefully measured against the financial savings. The same mathematical formula does not always apply in the home.
Sometimes in business paying more for items that are more convenient, higher quality, or more efficient are justifiable expenses as they actually increase your income earning opportunity.
I’m not sure if any of the old order Mennonites would agree with what I took away from the visit to the farm that day, but I can see why a smart business person learns how to handle business funds differently than personal funds. In business, sometimes unchecked frugality can be very costly.
At least that’s how I convinced myself to buy a MacBook Pro .
Are there any other small business owners out there who had to learn how to spend business funds more freely than personal funds?