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Education
StreetSmarts SM
Let's waste some money
By Jeffrey I. Shavitz As Starbucks Inc. Chariman and CEO Howard Shultz
Affinity Solutions Inc. said, "Risk more than others think is safe. Dream more
than others think is practical."
uh? Did I really just suggest in the title of this
article that we waste money? Isn't this about Depending on your organization's size, the number you
the most counterintuitive thing you've ever put here will vary. The good news is that it's entirely up
H heard … especially in an article geared for the to you how much you decide to allocate to this portion
ISO and merchant level salesperson sphere, where every of your budget. For example, when I started my first ISO,
dollar should be strictly accounted for in the hopes of Charge Card Systems, (now I have Alternative Merchant
using money wisely to grow our businesses? Processing, a high-risk organization) I allocated $10,000
to the high-risk category. This was while I was running a
Despite what you might think, I have a theory that, in young startup with little revenue and even less profit. As
business, it's sometimes a good idea to "waste" some money we grew into a more mature company, the amount in that
if you want to see serious growth. It might surprise you account was closer to $100,000 annually.
even more to know I think this is especially important in
a startup business or ISO you are forming that may not I have to admit, most of the time, the money in the fund –
even be cash-flow positive yet. when we chose to spend it – is lost. Another term for this
is "invested." Whatever you call it, these investments have
It sounds crazy — but hear me out most often resulted in zero return. However, that fund
also occasionally brings us a home run. I'll tell you about
When I lay out my budgeting process, it's fairly easy to two of them.
quantify the main categories. They include the usual vital
items: employees, marketing and rent, for example. But I Taking risks can pay off
also always make sure I include a "waste money" line item.
How did I choose to "waste" money profitably? Years
This "waste money" category is reserved for use doing ago, most credit card processing companies were only
something totally outside the box of conventional attending "end user" shows, that is, tradeshows for
thinking. It is our risk-taking capital, earmarked to be restaurants and retailers. That's when my web developer
spent in support of something that could – and most likely said he'd heard about a national web developers' show in
would – fail. As long as it was also a concept that could Las Vegas.
bring us excellent results if the idea took fire and worked
out, it could apply. I was intrigued by the possibilities of reaching outside our
industry's normal tradeshow box. However, coming from
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StreetSmarts SM
Let's waste some money
By Jeffrey I. Shavitz As Starbucks Inc. Chariman and CEO Howard Shultz
Affinity Solutions Inc. said, "Risk more than others think is safe. Dream more
than others think is practical."
uh? Did I really just suggest in the title of this
article that we waste money? Isn't this about Depending on your organization's size, the number you
the most counterintuitive thing you've ever put here will vary. The good news is that it's entirely up
H heard … especially in an article geared for the to you how much you decide to allocate to this portion
ISO and merchant level salesperson sphere, where every of your budget. For example, when I started my first ISO,
dollar should be strictly accounted for in the hopes of Charge Card Systems, (now I have Alternative Merchant
using money wisely to grow our businesses? Processing, a high-risk organization) I allocated $10,000
to the high-risk category. This was while I was running a
Despite what you might think, I have a theory that, in young startup with little revenue and even less profit. As
business, it's sometimes a good idea to "waste" some money we grew into a more mature company, the amount in that
if you want to see serious growth. It might surprise you account was closer to $100,000 annually.
even more to know I think this is especially important in
a startup business or ISO you are forming that may not I have to admit, most of the time, the money in the fund –
even be cash-flow positive yet. when we chose to spend it – is lost. Another term for this
is "invested." Whatever you call it, these investments have
It sounds crazy — but hear me out most often resulted in zero return. However, that fund
also occasionally brings us a home run. I'll tell you about
When I lay out my budgeting process, it's fairly easy to two of them.
quantify the main categories. They include the usual vital
items: employees, marketing and rent, for example. But I Taking risks can pay off
also always make sure I include a "waste money" line item.
How did I choose to "waste" money profitably? Years
This "waste money" category is reserved for use doing ago, most credit card processing companies were only
something totally outside the box of conventional attending "end user" shows, that is, tradeshows for
thinking. It is our risk-taking capital, earmarked to be restaurants and retailers. That's when my web developer
spent in support of something that could – and most likely said he'd heard about a national web developers' show in
would – fail. As long as it was also a concept that could Las Vegas.
bring us excellent results if the idea took fire and worked
out, it could apply. I was intrigued by the possibilities of reaching outside our
industry's normal tradeshow box. However, coming from
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