23 August 2017
Are you an impulse buyer or do you take your time, research your options and then only commit to spending after a period of consideration?
Once you spend money, you never get it back. You could earn more but you will never get that pot back once you’ve spent it. With that in mind, I have always been prudent in our spending choices.
We have spent many years watching the purse strings. Carefully considering our purchases and looking at how we could cut costs or be more efficient. Perhaps that’s because, as a business, we have never taken on any outside investment. We’ve had to find a way to make ends meet and we’ve only made purchases when necessary.
It would be easy to assume that we’ve been frivolous with money when you consider the incredible workplace that we have at UKFast Campus or when you look at UKFest our annual music festival. But, when you look closely, we’ve thought carefully about how we’ve spent every penny.
Take our data centres for example. Up until around six years ago we were outsourcing our data centre needs. As we grew, we quickly realised that it was becoming increasingly cost prohibitive and were facing the real prospect of having to raise prices. Alongside this we were struggling to meet the service level we promised our customers because we weren’t receiving that service ourselves. It was a challenging time and we had to act.
In response we invested £20 million to create our data centre complex in Trafford Park. Whilst it was a huge initial investment, because we’d been so frugal in the run up to that need, we were in a great position to reinvest. Equally, we are now in complete control of this huge area of cost, and of the service level we provide to our clients.
Spending money carefully
How to spend money is a lesson that many business leaders discuss. During my Entrepreneur Week podcast series, Chris Percival, CEO of Jigsaw Medical, shared his experience. He said: “Part of the journey is realising what you want to spend money on and what are your biggest costs. For example, we were spending a huge amount of money on software. When I looked at it, we could do it better ourselves. So we set up a separate business to run both our internal software. Now we’ve taken it externally too.”
Not only does this move neutralise the cost for Jigsaw Medical, it also sees the business portfolio grow. It provides an extra level of service to help other businesses to grow.
There’s a trend these days for getting a cool office with funky furniture and all the bells and whistles before you’ve got the turnover and money in the bank to have a strong business foundation. One of the greatest lessons I learned was to never borrow money or spend too early on things like this. If you’re thrifty in the early days these will come in time.