Focus on what we need, not on what we lack.

One of the most common ways in which new entrepreneurs end up wasting valuable time and resources is by focusing on the things they don't have, instead of attending to the things they really need. The things we lack are not necessarily the things our company needs, each business has its own demands and these respond to their progressive growth and the moment they are in.

That is why we must always be clear about our objectives and goals, that way all our efforts will be focused on achieving a concrete result.

During this guide we will be addressing some important aspects related to this topic, so that you can find it useful when managing your resources.

A young company can only make essential expenses

The first basic concept you must master is that of survival. Young businesses can go bankrupt by making a few mistakes. The resources of a start-up business are usually very limited. Whether they are monetary or human resources, they must be very well managed to achieve a healthy growth of the company. If we start investing in sectors and processes that do not represent a solid progress towards the results we aspire, sooner or later we will be undercapitalized, which will lead to the bankruptcy of the business.

At the beginning, make only those expenses that are essential and can be reverted into profits in short periods of time.

Return on Investment

The return on investment, or ROI for short, is the most commonly used indicator of whether or not an expenditure was made efficiently. ROI is measured as a percentage and in time.

We can invest a thousand dollars in advertising and calculate whether it has been a good expenditure by observing the ROI in time and in percentage of profit. Let's say that $1,000 was successful in attracting 100 new customers in a three-month period.

Those 100 customers netted us $20 each, which would represent a three-month ROI with a 100% return on our investment.

The previous investment would have been a smart expenditure, because we have invested 1000 dollars in advertising that has left us a profit of 2000 dollars, which subtracted from the 1000 invested represents a clean 1000 dollars of profit. If, on the other hand, the result had been negative, the investment would be qualified as a bad expense.

By calculating the ROI of each of our expenses, we can deduce where we are wasting resources and where we are making good investments.

Necessary investments that do not generate profits

Logically, not all of our expenses are going to generate an appreciable profit or one that we can calculate through ROI. There are expenses that contribute to keeping our company operational and that are unav