How Do I Make Good Decisions about Investing In My Business?

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  2. My Art Is My Business– And Now Both Are Stuck!
  3. Advice for First-Time Entrepreneurs
  4. Q&A: How Much is Too Much for Professional Development?
  5. Advice for People ‘Living the Dream’
  6. How Do I Make Good Decisions about Investing In My Business?
  7. The Non-Skeevy Way For Introverts To Make “Friends” Online
  8. “How do I get to know people without feeling competitive?”
  9. “I need to charge more. Is this a valid reason to raise my prices?”
  10. Q&A: The Fundamentals of Growing Your List
  11. Where Do I Spend Money on My Microbiz Until It’s Successful?
  12. Q&A: How Do I Know When I’m Making Enough Money To Hire Help?
  13. Q&A: When Will It All Hang Together?
  14. 3 Times When You Don’t Have To Answer The Four Questions (and 1 Where You Do)
  15. Help! A Client Called My Bluff! What Do I Do Now?

My irregular advice column returns with this question:

Sharise Mershon asks:

How do I make smart choices about what to invest in to grow and run my business? For example, when is the right time to invest in a CRM? Is it when I’ve got too many people to keep track of manually? Is it when I’m making enough per month to not be uneasy about the cost? When is the right time to invest in design? When should I invest in hiring an accountant or CPA to help me do my taxes? How do I figure out which courses/training programs/products/etc. are right for me and my business and when the right time is to invest in them?

Sharise’s question is such a good one and it really strikes the heart of what makes running a business hard: How do you make good decisions, and feel confident about them? She also gave me a lot of specific examples which makes explaining easier to do.

how-do-i-make-good-decisions-about-investing-in-my-business

Here’s my response to her:

The specifics of how to decide what to do, when, are mostly unknowable. You have to make a decision, but there will be no way to know if you made the right decision. In general, though, I like to focus on two places: things that are mission-critical, that directly enable you to make (or prevent you from losing money) and things that make you more confident in your decision making.

This is why, almost 4 years into this business, I don’t have a logo. I do not believe that logos will directly make me money (I did, however, redesign my site last year to make it look a little more professional. I think the site itself has more credibility weight.)

Things that make you more confident in your decision-making make you more effective as a business owner. You do less waffling and you execute more. This has a follow-on effect to your business, resulting in more sales and more confidence. It is, you may have guessed, why I am offering this course for free.

When To Make Investments In Your Business

I think that the first investment you should make once you’ve made some sales, is an accountant. Home-based businesses are a favorite target of auditors because they tend to claim for things that they oughtn’t and their records are in a shambles. If an accountant does your taxes, that signals to the IRS that a tax professional went over your records and therefore you are probably not defrauding the government. Even if you think you are doing everything right, an audit is tremendously stressful and time-consuming. In my opinion, the 2-300$ a year you spend on a CPA are well worth it.

As for the CRM, have you seen my review? (just checking.) For me, Contactually was a necessary trigger for me to network more effectively. If you are already networking effectively, and if you have a working system to remind you of followups, then you don’t need a CRM. If you aren’t networking effectively and you have reason to believe you are losing sales or other opportunities as a result of not following up then you should seriously consider a CRM. But it depends on how far along you are in your business. If you are still working on infrastructure (like building a site, creating a sales funnel, tweaking your offerings and refining your purpose,) then paying for your CRM might be jumping the gun a tiny bit, especially if your budget is tight. You should building relationships regardless, but you might not need a CRM. Clear as mud?

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Training and programs: In my personal estimation, there’s a lot of junk out there. So seriously research offerings. I personally have a couple of favorite people (Catherine Caine and Naomi Dunford) that I trust and since I know their stuff is good, that’s where my training budget goes. Time is money, after all. Another friend of mine is on every mailing list imaginable and takes a lot of courses, but she also gets a lot of referrals from people in those courses, so it’s almost like marketing for her.

The other thing to know is whether you learn from the inside out, or the outside in. I learn from the outside in (I need to know broad concepts and principles before I can focus on specific solutions) so I look for big, comprehensive courses. If you learn from the inside out, you have a lot more latitude in choosing courses because they will be smaller and more targeted, but it can be difficult to feel like you really know everything you need to know. (I have a point, and I’m getting to it!)

Where To Allocate Your Training Dollars First

Pick courses based on your weaknesses first. (For instance, if you don’t know how to build engagement, buy a course on engagement. Buy a course on Sales Pages. Buy a course on bookkeeping.) Then, buy courses based on what will make your decisions better. It’s never really mentioned, but decisions are like the pitons that your entire business is hung on. This is the unsexy, almost philosophical stuff, but after you’ve learn the nuts and bolts of business, you don’t just get to rebuild an engine; you get to design it from the ground up.

Decisions are like the pitons that your entire business is hung on. This is the unsexy, almost philosophical stuff, but after you’ve learn the nuts and bolts of business, you don’t just get to rebuild an engine; you get to design it from the ground up.

So there’s a lot of assumptions and reasoning for why people do what they do, and why they’re successful or not successful, that only makes sense in the context of that specific business, its owner/culture, and its industry, and therefore to copy that stuff without understanding why it worked is not going to have to outcome you hoped for. In my opinion, this is the primary weakness of most business books and courses.

Not to toot my own horn too much but there is only one course that I’m aware of that focuses on this, and it’s mine. IttyBiz used to have one called How Not To Screw Up Your Business, but it’s off the market now. Charlie Gilkey does this sort of thing, a little bit, but it’s only in consulting format, and it’s for slightly larger businesses (5-6 people).

I assume that there are few resources for this because a) It’s hard to sell a largely theoretical product and 2) it’s pretty hard to write one. Nevertheless, for people who don’t have the time or the budget for long-term coaching, it’s an effective stop-gap. You’re not telling people what to do, you’re training them how to think. It’s harder to do, but better for everyone.

In terms of the right time to invest, it’s like having kids: There will never be a perfect time. Especially when you’re buying courses that other people release on their own timeline. In general, if it fits in your budget, it’s never too early to learn stuff, even if you can’t apply it right away. But also, don’t let them languish on your harddrive. Make yourself a study schedule and come back to them every year or two. (I’m serious. Think of it as putting yourself through night school. For free.)

Have you got a burning business question? Write to me and ask! I love questions.

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1 thought on “How Do I Make Good Decisions about Investing In My Business?”

  1. Pingback: B-School and Investing In Your Business | Sharise Mershon

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