Applying “I Will Teach You to Be Rich” to Running a Small Business
What if personal finance concepts could help your business too?
Ramit Sethi wrote his book, “I Will Teach You to Be Rich,” for individuals managing personal finances, but its core philosophy, spending consciously rather than reflexively, applies just as well to the businesses our clients run.
Most small business owners manage their spending the same way most individuals manage a household budget: reactively. A subscription renews and nobody questions it. A vendor raises prices and the invoice gets paid anyway. Meanwhile, the owner hesitates to invest in the one hire or one piece of software that would actually move the business forward, because it feels like a big number on a bad month.
The central idea of Sethi’s book translates directly to how a business should be run: stop trying to cut costs a little bit everywhere, and instead spend significantly on the few things that matter, while cutting hard on everything else.
Here is how that idea applies to a small business.
Build a Conscious Spending Plan for Your Business
Rather than tracking every transaction, Sethi's Conscious Spending Plan asks individuals to sort spending into a few categories and assign each one a deliberate share of income. The business version of this is a simple exercise: list every recurring cost the business carries, and for each one, ask whether it is a growth expense, a fixed necessity, or a comfort expense that has quietly become permanent.
Here’s how to identify what category something falls into:
Growth expenses are the ones that either generate revenue or protect it: a skilled bookkeeper, a well-run website, a referral relationship, and in a law firm's case, malpractice coverage and continuing education.
Fixed necessities keep the doors open: rent, payroll, core software.
Comfort expenses are the ones that crept in and never got questioned: the underused software seat, the subscription nobody remembers approving, the vendor that was fine three years ago and has never been rebid since.
The goal is not to cut everything. It is to know, category by category, what the money is buying.
Spend Extravagantly on What Grows the Business
This is the part of Sethi’s philosophy that tends to surprise people. He does not tell readers to be cheap. Once the essentials are covered, his advice is to spend without guilt on the handful of things that genuinely matter and to feel no obligation to cut corners on those areas.
For a business owner, this might mean paying more for a genuinely good employee rather than the cheapest hire, investing in a website and referral network that actually brings in clients, or paying for the accounting and legal support that prevents mistakes that can turn into an expensive problem later. These are not indulgences. They are the categories where spending more produces a return. An owner who feels guilty about every dollar spent on these areas is optimizing in the wrong places.
Cut Ruthlessly on Everything Else
The flip side is just as important. Once the growth categories are funded, the rest of the budget deserves no loyalty. Sethi is direct about this: for the things that do not matter to you, cut mercilessly, and do not feel bad about it.
In practice, this looks like an annual pass through every recurring vendor and subscription with one question: if this stopped renewing tomorrow, would anyone notice? For many small businesses, the honest answer covers a surprising share of the budget. This is also where a lot of professional service firms lose money quietly: software licenses nobody uses, a lease with more square footage than the team needs, insurance policies that have never been renegotiated.
Automate the Decisions You Don’t Need to Make Twice
Sethi’s system leans heavily on automation by moving money to the right places on a schedule so that good decisions do not depend on willpower or memory. The business analogue is automating the financial plumbing: automatic transfers to a tax reserve account, automatic retirement contributions for the owner, automatic invoicing and follow-up on receivables. Every decision that has to be re-made manually each month is a decision that eventually gets skipped during a busy season. Building the discipline into the system, rather than relying on remembering to do it, is what makes it durable.
Chase the Big Wins, Not the Small Ones
Sethi is dismissive of the advice to skip lattes and cut small daily expenses, arguing that people fixate on small, visible costs while ignoring the handful of big financial decisions that actually determine their trajectory. The business equivalent is the owner who negotiates hard on a $40 monthly subscription but has never renegotiated a lease, never rebid a major vendor contract, and has not looked at pricing in three years. The big levers, pricing, major vendor contracts, staffing structure, are worth far more attention than the small recurring expenses that feel easier to control.
A Bias Toward Action Beats Perfect Planning
The last thread worth pulling from the book is its impatience with endless research in place of decisions. Sethi's advice is to pick a reasonable path and start, rather than waiting for the perfect plan. For a business owner, that might mean adopting the first workable version of a spending review rather than waiting to build an elaborate system, or making the vendor switch this quarter instead of after “one more round of research.”
The Takeaway
The next step for most owners is not a new budgeting tool. It is an afternoon spent listing every recurring cost the business carries, sorting each one into growth, necessity, or comfort, and being honest about which category it actually belongs in.
Candidly, Kalaria Law
