Pop Quiz: Are you making business investments based on strategy or shiny object syndrome?
If the answer is the latter, don’t panic, most online businesses start that way too. Mine did! I bought all the courses and guides and templates because I didn’t really know what I should be spending my money on so I bought everything that sounded like it would help.
And since there always seems to be another offer, another bonus, and another limited time discount, let’s put some guidelines in place and talk about what you should be actually investing in to grow your business and when to make those investments.
Resources + Links
Need accountability – join The Essentials
Profit First (affiliate link)
Brian Tracy books (affiliate link)
When first starting your business investments fall into two categories: investments that will help you position your offer more clearly and investments that will help you sell more of your stuff.
But what most solopreneurs spend their money on at the beginning are things like hiring a web designer or investing a lot of time and money into perfecting their website. But as long as you have a place for people to find the information and instructions on how to hire you or get what you sell it doesn’t need to be complicated or fancy. I had a student in my digital product program last year who sold a workshop multiple times from a Google doc. A GOOGLE DOC! She was using her personal Facebook and her personal network along with her Instagram and just sending people to that document to get the information and the link to pay. And she sold out that workshop multiple times.
Along the same lines, you don’t need to be investing in a logo or professional photos. But if you do want to create a professional-looking website, invest in a template, and swap out the colors and photos. That’s all you need to do to get your site up and running, and that should cost you no more than $100.
What you’ll probably find in the first couple of years is that your time investment and your energy investment are much higher than your monetary investment…
because in the first couple of years you’re probably not making tons of money and you might even be side-hustling so you’re not devoting a full-time schedule to your business just yet.
Other things that can be worthwhile to spend money on at the beginning are books or programs on selling, copywriting, and marketing. Because most of us are not inherently great at selling. I know I wasn’t at the beginning. What helped me hone my selling skills were books by Brian Tracy. (affiliate link) He’s like an old-school, door-to-door seller however the principles that he teaches in his books absolutely work for online business. The things that you need to talk about with prospective clients or customers are the same no matter what you’re selling. You’re still going to have to bust through the beliefs and excuses and learn what triggers sales for your product.
Instead of spending time all your time reading blog posts and listening to podcasts, you should study copywriting, selling, and creating a clear message for your brand. Those are the things that are going to help you make money so you can invest in more. Diving into one book or one course will get you that information in a more concise way and faster than researching across a bunch of different content.
Your goal at this time shouldn’t be to perfect your image but to have a clear message…
and get in front of as many people as possible, which because of social media is totally free. You may feel the need to spend money to be legit or grow faster but sometimes the best way to grow your business is just to show up and you can do that on lots of platforms for free – Instagram, Facebook, YouTube, TikTok, Clubhouse. (And don’t talk to me about the algorithm, if your content is great it can’t hold you back)
The next thing to invest in prior to really making money is an email platform.
You need to start building an email list from the beginning because that will be the easiest way to sell to your audience. It’s fun to create content for Instagram but it takes time to build an audience and it takes time to build trust. If you can get those people onto your email list then it’s a little bit easier to create a consistent connection because people pay more attention to what shows up in their inbox than what they see scrolling through Instagram.
Something to think about as you are looking at your investments is how much you need to sell in order to pay for that thing. Creating an email list on ConvertKit is going to run you about $29 a month to start, that price will go up as your list grows but hopefully as your list grows you are making more money.
So if you need to pay $29/month for an email list, what do you need to sell or how many clients do you need to pay for that? If you have three clients and they’re all paying you $500 a month then $29 is totally worth it. But if your clients are only paying you $120 a month…then raise your prices. That’s how businesses afford all the things that they need. They look at how much they need to pay in expenses and payroll and then they adjust their prices or their products in order to hit those numbers. You can and you should do the exact same thing.
Other things to invest in when starting your business would be help with anything you need to do but you feel terrible at or it just takes you forever. So for me this was hiring a podcast editor right after I started my podcast before I even knew if it would bring in clients and customers. I dont like listening to myself talk and it took me a long time to edit episodes myself, so I would put it off.
The person who edits my podcast now is a sound engineer and he not only makes me sound way better but I guarantee he is much faster at editing than I am. So when you think about investing in someone to take over a task for you consider how long it takes you to do that task. If you are spending three hours writing a blog post or three hours editing a video what could you do with that three hours instead? Maybe you’re paying someone $20, $30, $40 to do the same work in an hour and then you’re not only getting those three hours back but also avoiding the frustration that comes up every time you have to do that task.
I’d also recommend hiring an assistant as early as possible.
Looking back to my first couple of years in business I was doing so much admin work – writing contracts, sending invoices, going through my inbox, updating little things on my website, tracking stats – all that stuff can be done by an assistant. And even if you’re just paying them for five hours a week that’s five hours you get back to show up on social media, to make your programs or products even better. Those are the things that are going to grow your audience and create happy customers or clients which will get you great testimonials which again is a free way to help sell your stuff.
One other thing that is helpful to invest in and doesn’t tend to be super expensive is anything that is going to help you automate repeating tasks.
This could be paying for a platform like Planoly (affiliate link). I pay a monthly fee so that I can schedule my Instagram posts and let Planoly auto-post them. It also helps me organize my grid and plan my content in advance so there’s a strategy behind it and I’m not just posting what feels good in the moment. It helps me show on the days I don’t feel social because my posts are already written, they’re already scheduled, and Planoly will post them for me even if I don’t open Instagram at all that day.
And before you nix the idea of hiring help whether that’s an ongoing virtual assistant or someone who is going to edit a video or do a one-off project, take into account how much time it would take you. Because if you are going to design a landing page or a PDF and design is not really your thing you could end up wasting 5 or 10 hours. When you could be doing something that is more with your zone of genius.
And an even more important reason to hire someone to do things that you just aren’t good at is that you’re going to spend less of your day feeling frustrated. So if you find yourself often saying, “I have to do this but I feel like I’m pulling my hair out. It’s so hard I never know if I’m doing the right thing.” Then just hire someone. Before you decide that you can’t afford it go on Upwork go on Fivver or reach out to your network to see if there is someone you can pay. You don’t have to spend hundreds of dollars. You can pay someone really well in another country and get your project done without all of that stress and wasted time.
And if you have a hard time getting being productive…
a great investment is an accountability coach, a mastermind, or paying to join a community. Just being around people who are doing the thing that you want to do, who are showing up consistently, who are getting results can be very motivating. So if you need some outside motivation to get yourself to show up on Instagram, raise your prices, start that podcast, joining a community can be a really helpful way to do this.
Psssst! Did you know you can get twice monthly coaching, accountability, a rad community, and all the trainings to market + grow your business online in The Essentials?? Click here for all the details on becoming a member.
Now what about things people tend to invest in, especially at the beginning of growing their business, that they don’t really need…
It’s mostly the outward-facing stuff that makes us look really good like hiring a website designer, (this is coming from someone who was a website designer for years), hiring someone to design a logo, hiring someone to make your videos all fancy, hiring someone to take professional photos. All of this stuff can wait until you are actually making enough income that it is worthwhile to level up your brand. That at the beginning there are tons of free templates on Canva, logo templates, website templates, PDF templates (Creative Market (affiliate link) is great for these) that you can buy for like $10. So be scrappy, DIY you’re your design, and spend more money on things that help grow your audience and your revenue. Looking cute is not part of that.
I also need to point out that often we use these things as an excuse for why we can’t show up.
My website doesn’t look professional, my photos are old, or I took my photos myself – these are excuses to not show up. I took my own headshots for the first four years of my business before I got professional photos. No one said a damn thing and I was always booked out with clients. People are not looking for the best website unless you’re a web designer. What they really want is to know exactly how you can help them and that your service, course, or product actually works. They want to hear from people that have already purchased it/hired you and gotten those results. That’s it! So you don’t need professional photos or logo or a fancy-pants website in order to make that happen. You need a clear message and you need to show up.
One last thing I want to say about investing in your business, something that I didn’t do at the beginning at all which meant that my finances were kind of all over the place, I didn’t make a budget and I didn’t track my expenses very well I just kind of spent whatever sounded important in the moment.
Two things that helped me create an expense budget and stay on track…
First, I’ve started following @TheLAMinimalist on Instagram. She posts about minimalism (duh) but also about being conscious about where you’re spending your money. And she says if you didn’t need it before you saw it then you still don’t need it (paraphrased). Now I mostly follow her so that I will stop spending so much money on shoes (especially since we’re in a pandemic and all I wear is my vans and UGGs) but it’s a good reminder for online businesses as well – if you didn’t think you needed that course, that template, that upgrade before you saw it then you probably don’t need it right now either.
When planning expenses, be conscious of what you’re trying to accomplish and add expenses related to that goal. Whether it’s buying a book, a course, or hiring someone, you want to have a plan for what that purchase is going to help you accomplish.
Look at the areas in your business that need help or the next thing you want to accomplish and then make investments according to that, not according to what the person on the podcast or the blog post or the IG live told you that you need. Even the tips that I share should be audited against your goals because I cannot see inside your business so I don’t know exactly what you need. Always be advocating for yourself and work on not letting FOMO or all of the shiny things catch you and put their sticky fingers into your bank account.
The other thing that was helpful in getting my business finances figured out is the book Profit First (affiliate link) which will help you figure out what percent of your revenue should go to expenses, what percentage to pay yourself, and what percentage is profit. The book gives you the formula to figure it out. For most businesses in the first couple of years, your expenses should be about 20% of your revenue. so if you’re making $5000 a month you should be spending about $1000 on apps, software, templates, ads hiring an assistant, coaching, courses, and whatever helps you grow your audience and sell more. And as your income increases than that percentage might fluctuate if you want to bring on contractors or employees but in the beginning 20% will help you get used to having a business budget and figuring out the best ways to invest that money.
One last thing – if after listening to this episode if you are feeling your money is all over the place and not spent wisely…
Join the club! At the beginning of running my business, I was throwing money all over the place because I wanted to make sure I was investing and everything sounded important. If you’re having a little panic after listening to this don’t worry, you are in very good company, and now that you know you can do better.
So take time in the next week to go through all of your expenses for the past six months to figure out where you’re spending most of your money. If you’re spending it on in-the-moment purchases, or on things you have been needing, or are using your investments to next-level your business.
And also track your time for 10-14 days. This may sound like it doesn’t go along with figuring out your expenses but you might be spending too much time on, tiny admin tasks or things outside your zone of genius, and that would be a sign to hire an assistant or contractors or even an employee to help you out.
All right hop over to Instagram, find me @xosarahmorgan, click on the Episode 58 post and let’s talk about online business expenses and investments.