Likely you’ve heard the advice that “you’ve got to spend money to make money.”
While there are business investments that will absolutely transform your business and help you get where you want to go, not all investments are created equal… and not every investment is appropriate for every person.
Just because your friend’s life was changed by hiring a copywriter, or social media manager, or business coach, doesn’t mean yours will be.
A few years ago, a friend of mine hired a consultant to help with a launch, and it blew up (in a good way) the results in her business. I figured it would be worth me working with this person also.
A five figure investment and flopped launch later… I learned the lesson that just because an investment seemed to work really well for someone else, doesn’t mean that it’s going to work the way you want it to.
So next time you are feeling the pull towards an investment, whether it’s a new team member, coach, consultant, course, software, or anything else, here are some questions to ask yourself to get clear on if this is going to be a good move for you. It’s not totally foolproof, but it will get you slowing down and reflecting, which is always a good thing.
If this doesn’t work, can I still afford it?
This has been one of my key questions throughout my career as a business owner. It doesn’t completely protect you from bad investments, but it can help you mitigate getting into a bad situation from investing beyond what you can handle.
The truth is, even great investments can take time to pay off – and you don’t want to be in a place of extreme financial stress while you are waiting for that.
What am I wanting to get from this? Why do I think I will get that from this?
Confession time… there have been investments I’ve made where I did not have a good answer to this question. The amount of money I threw at things without having a clear reason makes me cringe now. (Note: even if you can afford it doesn’t necessarily mean you should do it!)
What’s the worst case scenario if I moved forward with this? How would I handle that?
Something I see a lot with people who are considering hiring a new team member is that they worry about being able to continue to pay this person long term. The added level of financial responsibility scares them away from getting the help they actually need in their business.
This can be a great question in these situations, to get clear on what would actually happen if things went wrong, and how you’d handle it. This is going to have the bonus of making sure you pay attention to the agreement you sign or terms you agree to – which is really important with any investment!
What are the alternatives to this?
Sometimes when we make an impulse purchase, we decide between buying this thing or nothing… and forget to investigate alternatives that might be better.
Many businesses have a standard of getting 3 quotes before hiring a service provider or making a big purchase, and this mentality can be really helpful for you as well as you make big buying decisions in your business.
What problem am I trying to solve with this investment?
This is a question I ask clients all the time when they come to me for advice about an investment they are considering. Listen, sometimes you just want something – and that’s ok! But when you are making business investment decisions, you do want to have some clarity about WHY.. including what problem you are trying to solve.
Often I find that we tend to downplay our experience, knowledge, and skills, and are on a never-ending quest to try to learn more and more. Many business owners I work with tend towards over-investing when it comes to learning…
…and on the flip side, they tend to under-invest when it comes to getting actual tangible help, such as hiring a housekeeper, laundry service, etc to support them with household tasks, and procrastinate on investing in a virtual assistant, an online business manager, or similar role to support them with tasks in the business that they could delegate to make their life so much easier.
Ultimately, the investments you make in your business can completely change your experience of your business, and the business itself, for the better. But you want to be smart with your investments and make sure you prioritize the things that will make the biggest impact for your business right now, with the amount you want to spend.
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