As the economic headwinds blow, looking at the costs of your business and what you can cut back on is a good idea. In fact, I’d say it is always a good idea to keep an eye on the costs of your business.
There are some costs you need to pay to keep your business running and there are many things it makes good business sense to continue to pay for. What about investing in new things?
If you read my blog post, The Best and Worst Investments I’ve made in my Business, you’d know I’m a big believer in investing in your business. I would not have the business I have now without the investments I have made in both my business and myself. I’ve invested thousands. Not all of them have been good investments, but overall they have definitely been worth the collective cost. I’ve got far more back than they have cost.
But what about investing now? What if we’re heading into a monster of an economic downturn and all my clients disappear???
I hear you. It’s a risk I face too (albeit I know not everyone cuts back in hard times and even those that do continue to spend on things that are important to them).
I think it is just as important to invest in your business now as it has ever been. In fact, I’m putting my money where my mouth is. I’ve just committed to a significant investment in my business. But it’s imperative (as always) to invest in the “right” things. Investments that really will move your business forward.
So what are those “right things”?
1. Investments that will lead to an increase in revenue
So the first type of investments to make (or continue) are ones which should lead to an increase in revenue.
This could be investing in skills that mean you can offer something different or charge a higher price because what you offer is better than before.
Earlier this year I invested in a course on memberships, and now run my own membership. Whilst I could have run a membership without taking this course (I’ve been in plenty!), I knew this course would help me run a better membership.
One of my clients had taken the same course and, when I asked her, she said it was one of the best investments she had made in her business. And, without it, she wouldn’t be earning what she was in her membership. That investment (which was significant) had a very good return on investment for her.
Of course the real return is in actioning what is learnt on the course rather than just taking the course… I know a fair few “course junkies” who think they need to keep taking courses, learning, getting more qualifications etc. And I’m not knocking this, but a good business investment is taking a course that will allow you to offer something different and/or raise your prices and then doing just that!
The other type of investment that should lead to an increase in revenue is marketing. Marketing (especially ad spend) can be one of the first things cut when times are hard. But that is, in my view, short sighted. Because in the longer term it will lead to a reduction in revenue.
A lot of marketing doesn’t need to cost you at all. Social media, SEO, even PR needn’t cost you anything (in terms of money) but they do cost time. I’ve invested a lot over the past few years in learning how to market my business most effectively using these free tools. And I now regularly get clients from these efforts via both Instagram and SEO.
Investing in marketing is however usually a medium to long term game. But if you can invest in marketing when your competitors are cutting back it will leave you in a much stronger position.
2. Investments that will save you time
The second type of investments I think are worthwhile are investments that save you time.
As an entrepreneur or small business owner, investments that save time can be harder to justify. I see many people spend 50 to 100 hours building their own website when they could outsource it to a professional like me, saving a lot of time (as well as doing a better job). Often they have paid thousands and spent a lot of time qualifying as a coach, nutritionist, or similar but won’t invest in their business until it is “successful”.
But your time is valuable. I’ve just invested in help to grow my business from someone who has grown her business in the same way I want to. And I know I can save a lot of time learning from her. Hopefully I’ll make fewer mistakes too!! I could easily have tried to do it myself. There’s no “need” to make this investment, but I believe the result will be better and it will save me a lot of time.
Early on in my business I invested in Dubsado, a client relationship management tool. At the time I was manually copying contracts and amending them for each client. Investing in Dubsado was a big step as I was early on in my business and it was a significant sum that didn’t bring more revenue. But I believe it saved me 2 to 3 hours on every client project. That’s saved me a lot of time over the past few years and the investment has been very worthwhile.
Outsourcing is another investment which can save you time (you have to make sure you’re not redoing their efforts though!). I’ve outsourced many things that others can do better than me/save me time. In the past I’ve used a professional copywriter, graphic designer, VA, tech VA and a social media manager. These are all jobs I could have done myself, but outsourcing has meant that I have saved time as well as, usually, getting a better result.
I’ve also invested in a lot of skills training to enable me to save time. Not just in website design, but in many business skills, especially marketing. These have definitely increased my ability to make money as well as saving me time in the long run.
It’s then up to you how you use that time. You might spend that time on other parts of your business (which I have done) or you might decide you want to spend less time in your business.
3. Investments that save you money
These are, of course, the easiest to justify. Sometimes you have to spend money in order to gain. So that may be paying annually for something instead of monthly.
Or it may be investing in learning something so that you can do it yourself rather than outsourcing to someone else (yes this contradicts reason number 2 but sometimes it is worth it). I decided to invest in learning how to do my own podcast rather than pay for an editor, etc. At some point I may outsource it, but for now I’m doing it myself (this does mean I often leave recording my podcasts until the day before they go out – not the best idea!)
4. Investments that give you support
Being an entrepreneur or small business owner can be lonely. And sometimes you can drive yourself mad wondering whether what you’re doing is the “right” thing.
I think it is important to be part of a community of others who understand what it is like and can give you their experience or views. I’ve been in a number of memberships where the primary benefit has been this community (usually there is an element of skills learning too – which I might use to justify this investment!). I’ve found the size of the group to be hugely important to give this. Too large and you easily get lost!
I went on a business retreat to Morocco (which I talked about v recently on the podcast). Whilst there were a few reasons for deciding to invest in this, the biggest benefit I got out of it was the amazing community of other entrepreneurs/small business owners taking part. The support we gave each other was incredible (and has continued beyond the retreat).
And sometimes you can get additional revenue from the contacts you have made (or learn from them and therefore save time).
Despite the concerning times ahead I’m still investing in my business and I recommend you do too. But, I’d think about the investments and make sure they’re likely to be worthwhile (there are never any guarantees!)
I don’t recommend investing if to do so would cause you to get into debt or make significant cut backs at home (“this course or feed my children”?).
But I would recommend investing to make more revenue, save time, save money or even for a community. And if it is a course, membership or other training the most important thing is to take enough action to get the benefits!!
One investment I would make, if you’re struggling to market your business or think it could be improved, is in my new marketing membership. Doors are open until 10am Wed 5 Oct 2022, or you can join the waitlist for the next time it is open. You can find out more here.