Kristin Pruis • December 5, 2019
In the spirit of it being the biggest shopping season of the year, I want you to reflect on all the purchases you made this year for your business. Were they good or bad investments? Maybe some of them you’d make again while others, maybe not so much. Which is why I want to talk about making smart business investments.
An investment doesn’t have to just be a large purchase or obtaining stock of a company. Really, an investment is any money you spend on your business with the intent that you will receive more money (value or time) back from it than you spent on it originally. Inherently, all investments involves some sort of risk so if you make a bad investment, essentially you face the adverse effects of that risk. If you make a good investment, you get to reap the rewards and all the benefits that come with it.
When you are just starting out in your business, it seems like there’s always a new app to purchase or monthly cost added to your list of expenses. It can feel defeating to look at all those little costs add up as your margin disappears. Which is why it’s so important to take a critical look at those “investments” you’ve made this year and decide where you can trim the fat.
Now I want you to critically assess which investments you made that were “good” and which ones were “bad.” Do you see any patterns here? Cut out the ones that aren’t working for you and narrow in on what was working. How can you repeat these smart business investments for you next year so they continue to help your business grow?
My #1 Smart Business Investment
This year, I had the privilege to make some great investments for my business, one of them being hiring my very first business coach. Was the price tag scary? 100%! But making that investment was the first domino to creating a ripple effect of incredible growth for my business. Could it have been a bad investment if my coach didn’t deliver or I didn’t put in the work? For sure, but I committed to it, did my research to ensure I hired an awesome coach and guess what? I had my best year ever in business!!! I’m talking almost 2.5x my revenue from last year. You better believe this is not the last time I’m hiring a coach for my business!
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So, now you may be asking, how do you know when you are faced with an opportunity whether it is a good or bad before you make the investment? Undoubtedly ever opportunity that comes knocking will not be a good investment. In order to assess whether an opportunity is a smart choice for your business, you need to revisit your business goals and ask yourself a few questions:
- Is this investment something I can actually afford?
- Will this investment bring me closer to what I want to achieve?
- Am I willing and ready to follow through with the steps to make this investment fruitful?
- If this investment falls through, will my business still be OK?
- Will this investment save me time or money more than what it costs?
If you answer, no to any of the above, then this is not right investment or the right time for this investment in your business. If the answer is yes, then girl, what are you still doing reading this blog?! Go out and do the thing!
My #2 Smart Business Investment
I went to share a real-life scenario of this in action: At the beginning of this year I was struggling with the idea of hiring a nanny to watch my daughter because of the additional cost it would be for our family. But when I did the math, I was able to 5x the investment of hiring help by earning more back per hour in my business. Even though we were paying a nanny $200 a week, I was able to earn over $1000 that same week because I had the support I needed to actually get work done. So was it a smart business investment? Absolutely!
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This example illustrates how important it is to look at the outcome vs the front-end cost. If I had only considered the cost, I would never had hired the help and I would still be earning the same five-figure income I was last year. So ultimately the best time to make that investment in your business is when the math adds up!
So, let me ask you what smart business investments are you putting off? Is it a hiring a coach? A new website redesign? A social media manager? Consider what the outcome for your business could be if you followed through. How would it change your business? Let me know in the comments!