Are you investing in your business?
I’m not just talking about time. Of course you’re investing time, right? If you’re not, then you’re likely not very successful.
But what about money? Are you investing money into your business?
Over the past decade, I’ve worked with hundreds of small and medium-size business owners. Some have been startups with funding while others have had large marketing and PR budgets.
But I’m not talking about those businesses. I’m talking about small business owners. I’m talking about corporate trainers, business and marketing coaches, personal development experts and other service providers. I’m talking about clients whose businesses are generating less than $150,000 per year. In other words – small businesses.
It’s been amazing to me how often small business clients aren’t willing to invest in their own business. Sure, they might buy productivity or marketing products or hire out projects like website design. But they seldom have a longer-term plan beyond the project scope. And seldom do they consider an ongoing marketing or promotion budget for the growth of their business.
What gives? How can you grow a business if you’re unwilling to promote it? How can you increase your revenue if you don’t invest some dollars into marketing? I’m not talking about thousands upon thousands of dollars each month. I’m talking a few hundred or thousand or whatever fits your budget.
If there’s one thing I’ve learned it’s this – if you’re unwilling to invest in your own business, then why should anyone else? In other words, if you don’t spend money to promote your products or services, why should anyone spend money on them – if they can find you?
So, are you investing in your business? How? What’s your budget and how are you using it? And if you’re not, why not. Let’s talk about it.
(note: image from sash / slash on Flickr)
I wrote an article a few days ago with a similar slant called,
11 Great Investments –
http://www.spinningsilkmultimedia.com/11-great-investments/
My inspiration was all the Wall Street panic going on last week and while I did touch on investing in ways to be more productive my post was more of personal nature with a few things applying to business as well.
You make a really good point about if you don’t invest in your own business, why should others. It is important to remember however that one can invest with more than just money. One can also invest with time, community service, networking and education by reading every day and experimenting with new methods.
I think you are quite right about this issue. I too am too cheap to put money in my online business as the internet is supposed to be free. But I guess that although this might work in separate an isolated cases, it will not be the case for the majority.
Olivier.
so what do you do when you don’t have money to invest? i suppose this is greater than that. having the right attitude towards your own business is crucial? i think if you have only attitude, and not money yet, let it be the right attitude. do what you can with what you’ve got, right?
you started this post with the single greatest investment you can make into your business, time.
Yet you would be surprised the amount of small business owners who do not read. The greatest investment you can make into your company is the acquisition of knbowledge.
The second most importnant importnant investment is unfailing belief in where you are heading.
Jansie,
Certainly. I think it’s a matter of how you think about your business first. If you don’t have money to spend, are you still willing to when you have it?
linkerjpatrick,
(every time I write you handle, I smile.)
Exactly. There are other things you can do to invest in your business. Time is a commodity as well. Yet the willingness to invest money is what often makes the difference for small businesses. Notice I said willingness…
Olivier,
So why aren’t you investing even a small amount toward marketing?
Patrick,
I know what you mean – I work with those clients all the time. Knowledge is vital. As is understanding in how to use it. Yet money still seems to be the sticking point for a lot of businesses, don’t you think?
I’m just making a wild guess here, but I’m betting the investment of time and of money are equally important, just at different times in differing proportions.
And either way, there has to be synergy in the investment: i.e., don’t invest money without having thought it through; don’t invest time unless you’ve tied it to some need and/or have it budgeted.
I’m notoriously bad at the latter–budgeting–and am applying gobs of time (and effort) in Q1 to change this. Also, a little money, in that I’ve hired a bookkeeper.
Interesting topic. I hope you explore it further.
I agree wth you. In making a business big , you must first be willing to invest on it and focus.
Investing into promotions must be of course in moderation. It should be 10% of the total profit. In this way you are in direct proportion with your revenue.
Dawud, we are on a very sticky wicket here. Being an entrepreneur is tough enough without having to choose one or the other.
There are two schools of thought. One says, do your business with your own funds to eliminate interest costs – Islamic businesses are classic examples. The other swings to the other extreme – do not use your own money to do business. For instance, hire premises, equipment and machinery and to the extent keep every cost as a revenue item. You build all these expenses into your cost while pricing and use techniques like buy on credit and sell on cash to maximize your profits which should of course be squirreled away.
The difference between the two is a state of mind. The first cannot differentiate himself from his business, it becomes his everything, he becomes his business, often with disastrous effects on his personal life. The second is totally mercenary. His motive is to make money at others’ cost. Not that his personal life is any better, but at least the financial side of it is not too bad.
Both can easily find advisers or consultants to fit into their strategy. I have also come across the same adviser suggesting one to one type and the other to another type!
I have also found that both work.
How can one choose between two perfectly logical approaches to an issue like this? A lot more information will be needed to suggest one or the other.
I suppose that a strategy combining the two will mostly be appropriate, but one needs a lot more background information to come up with an ideal one.
Dawd,
Hey, great post. A few months ago I discussed this on my blog about Rethinking Marketing
http://blog.kamigomarketing.com/index.cfm/2007/11/20/ReThink-Your-Marketing
communicatrix,
There is a balance, absolutely. And what I’m talking about is the often imbalance between time people are willing to spend and money. I see it all the time.
I’ve simply seen that you have to be willing to invest money in your business to be successful. Doesn’t mean you have to spend tons or get VC. It’s just important to get a flow of money happening in your business.
Home Recording,
Great points.
I think it depends on the size of your business. I work with some small corporations and spending often isn’t an issue at all. Yet the smaller, service-oriented solopreneurs I work with often don’t invest their money in their business. Yet, at that level, they need to invest – and invest their own money. A $250 per month marketing budget, for instance, while small can make a world of difference to a solopreneur making $75,000 a year.
lei,
Yeah. That’s why budgeting and planning are so important. You have know what you can spend, how you’re going to spend it and what you expect in return.
Charlene,
You make some nice points in the post. And one consideration is how you engage your people.
I agree with your point. If you are not willing to invest your time and money, then who else would?
If it fits into ones budget one must invest time and money in marketing, as without marketing it is very difficult to sell your product.
Laser Hair,
Exactly! The question really is do you make an effort to invest at least a little into your business? Not you, per se. But all of us.
Time is a very solid investment you can make on your biz. There is no quick way to make your business a success without giving it the dedication it needs. Actual hands on management – a key factor that should always be considered 🙂
Quality Link,
I couldn’t agree more. I’ve always held the notion that business owners should ‘own’ their business. In other words, they should be in it – not just farm everything out. The time for outsourcing will come.
For instance, I always feel that service-oriented clients should write their own copy. They may hire an editor – great. But write it in your own words first so people can get a taste of the you in your business. Because business is about relationships.
I agree that time isn’t the only parameter to succed a task.Global world wants money to circulate.
usa,
What’s been the most rewarding expense you’ve spent on your business?
Most rewarding expense on my business has been online marketing. Has brought me tons of clients I thought were unreachable.
I want to share my own experience, I was consulting one start up company in India, it was a venture funded company, in just 2 years company has to shuts its shutter down.
The biggest mistake owner has done was “he was never listening to other’s advice or suggestion”
“he was spending money like anything, he has signed contracts without even looking at what service those guys are providing”
I agree with article, you should devote your whole n soul to business if you want to make it successful.
I totally agree with you.But you have to invest wisely.
First of all that matters is your own concerned and investment(not only money there are so many other things that linked with your business your time , life etc.), others can provide you an helping hand if and only if you are in right direction with right attitude.
If they found that they can gain profit with your ideas then only they will ready to invest.
You need to invest in to your business for one reason- to grow it. There is two ways of investment- money or time. If you have money that’s ok, but if you don’t, you invest time.
There are so many reasons why you have to invest your business if you really want to be successful with what you are doing
I also hesitate to invest the money I earned with my sweat in my own business. I think that is true for all small businesses because they worked hard to earn their money. Unlike the big businesses that are juggling the money from dept to profit.
This topic is brilliant.There are so many things are investments like your assets. Many ways you generate money without investment for example job any company or organization. But own work is own work I am agree your thought this is very nice post.
Yes invest money is important for business but i think the most important is the skills and good instinc of business. If we had it we can start business without money
One major mistake of starting entrepreneurs is they think that small business means short term goal and expect to have immediate results. Which is very wrong on anything especially on business.
Hi Dawud
Agree reinvesting money into your business is important but not just for the sake of it. Needs to be effective or it’s a waste of good money. So testing your results is important and maybe dip the toes in with a small amount and ramp up if results look good
This sentence “if you?re unwilling to invest in your own business, then why should anyone else?”
SOLID GOLD!
Thanks for this Dawud
Neil Asher
I think one should invest time and money in business.
Money and your valuable time you have given to your business can return much more than you invested.
Really good post.
No matter what your size you still need to do what the bigger guys do. This can obviously be done on smaller budgets as you already mentioned.
I agree with you in the sense that I do not understand how small business owners are not willing to invest additional dollars into aspects of having a business which will in result bring in even more dollars. Prime example it internet marketing, advertising, even government contract work. I believe the cheapest, most efficient form for a small business to increase their revenue, at least if they are a service company, would definitely be online marketing.
Great topic – No matter how small or big the business is I think It’s really is a good idea to keep investing in it. That’s the only way to keep it going. Thanks
Ho this article is very interesting. I don’t know if I could reuse that but I will sleep clever.
Thanks a lot. Laura
This is a great topic because money is woven into our lives and many of us do not have a good relationship with money. I agree that knowledge is power. Keep learning from books, from other entrepreneurs, network and whatever you can do to help your business. Don’t be afraid of mistakes or failures because these will be your greatest learning tools.
I am doing job these days but not getting enough money according to my work. So planning to invest in my own company. I think your tips ll help me on this…Thanks
How much do you spend on promoting your website a month? I am only starting to outsource and is planning to spend about $600 for content and seo services.
I agree, we have to invest money on our business to grow. Personally, it’s easier to invest your time on a business over money. Your thoughts just reminded me, and your right about it, it’s not necessarily big amount, at least a few hundred bucks for promotion would be enough. Thanks for this post.
Investing in YOUR business is the wisest money you can spend. But like spending time on yourself, the quality of your investment greatly determines the quality of your business. Time for yourself on the couch watching a sitcom on tv might be relaxing, but not lasting. spend time relaxing on yourself bettering yourself. Over spending on services, cheapens your investment.
It’s part of business, investing. We cannot expect our business to survive, let alone to grow without the proper investment of time, effort and money. Even in relationships, we have to spend time getting to know people to expand our connections, because more connections means better chances of expansions.
I agree to that simple saying that ‘If you don’t want to invest in your own business, who will?” but I have my doubts about the amount of money I can spend, especially at the beginning.
In Israel, the PPC (Pay Per Click) field is very competitive and it can easily turn to quicksand… Don’t you think that at first you should try Oraganic SEO and most important: *networking* and only then pull out the big $$ ?
Good investment strategies need determination and attainable goals.
I think nothing to lose by buying your ebook
but if I may ask for money back guarantee
I’m agree with author! Investment in your own business will help you in future! Everybody who wants to be successful must invest into his own business!
i also agree in what you said above, to get good business should start from good invest
Re:”One major mistake of starting entrepreneurs is they think that small business means short term goal and expect to have immediate results. Which is very wrong on anything especially on business.”
Absolutely agree.
M.
Dawud – you wrote a post a few years ago that hit me upside the head – about owning your own website vs using a free blog. I took the plunge that day and haven’t looked back – what a HUGE difference it made to make that investment in my business. If anyone is wavering on the line of investing or not, I’d say owning your own website is the first MUST on your to-do list. Thanks for your help over the years, and best wishes to your family.
I acquiesce that information is power. Keep discovering from publications, from other entrepreneurs, mesh and anything you can manage to assist your business. Don?t be aghast of errors or flops because these will be your utmost discovering tools.
This is really basic thought and one of the few basic lessons of doing your own business is to invest in it. Have you ever seen any plat that grows in to a tree without water? Probably not and this is the same with businesses. If you want your business grow and perform better you have to invest? Investing better way to get maximum out of it is another debate?
I believe investing is vital for anyone. There can only be growth when you invest both time and money, and get more in return.
Where I live I however see a lot of businesses who do invest, but they don’t measure the ROI…they don’t last very long either.
Sadly, most folks nowadays have not concept of the cost of running a business. With all the get rich quick schemes it seems that success is handed on a platter with no work. However, without the investment of some finances most businesses will fail.
I invest about 15% of my income into my business in marketing. I have spent money a few ways, the most effective being fixing my website and doing some SEO work. My business it at a point now where I make a very good amount of business from my website and internet marketing.
I also do a few other things. The usual marketing materials, some things like coupon advertising, trade shows and the like. Marketing is your most important budget to generate growth.
I think people underestimate how much money they have invest into a business before they start to see any coming back. Time and time again I have worked for companies who are unwilling to invest and can’t understand why they then have to make people redundant because they are making enough money! It’s all about give and take. Give and then take. I fully agree and support your article. Thanks
Hi Dawud, I am a silent follower for your blog and I just need to write to comment on how you nailed my interest on your post. Whether it is promotion, making your product your service better or boosting support bounderies, balancing cost effective investments and time is crucial. While, you need to research on how you can save more, cutting out on costs is not always a good idea. Very nice. Now you motivated me to get that SAAS for my online business!
Its very important to invest in your business..good post like it..
Recently come to the conclusion that invest in their business is worth money, but it is possible only when well understand the niche for which began, otherwise it will be wasted money
This is really basic thought and one of the few basic lessons of doing your own business is to invest in it. Have you ever seen any plat that grows in to a tree without water? Probably not and this is the same with businesses. If you want your business grow and perform better you have to invest? Investing better way to get maximum out of it is another ….debate?
Be a part of the conversation
This is the important thing to be pointed out for small business owners. I have never used any extra penny for marketing and other stuffs as I was the beginner. But now onwards, I should use the effective marketing campaign for my blogs. Thanks for the suggestions for us.
Investment in your own business serves as a great test of whether you’re serious about it. In a world where you can start an online business with zero initial investment, the point when you invest in your business is when it stops being a hobby.
I think it’s important to evaluate what investments will truly pay off–in business and in life–and to make those investments as soon as possible, whether it’s money you’re investing in tools, or time in learning new skills.
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I think success is the real achievements measured against your perceived challenges. Everyone/business has challenges (goals) and so they should be able to calculate their successes.
Ok, it is going to be a long list.
i have invested more than 70,000 rupees for sure, let me list it out. First of all a Personal computer worth 18,000 rupees with advance configuration. Then made a 20,000 rupees fixed deposit in sbi bank and got a sbi credit card with credit limit 16,000. I did that because i could buy some products from online related to web designs and i have purchased many from themeforest. Then purchased hosting space of 100 gb reseller account from siliconhouse and it costed me 3000. thats for investment.
And for marketing my business 8,000 rupees per year for sulekha.com, a b2c portal website, got a preferred business listing but didn’t get much business from them but earned double the money invested in sulekha.com till now.
And IN last month, since a person from indiamart called me for an offer package with online catalogue section in indiamart.com domain i agreed. the catalogue design is also good. Now they are promoting my catalogue in online. i am waiting for results (local leads) from my city. yeah it costs 20,000. checkout the catalogue whether it is worth or not
http://www.indiamart.com/classified-web-designs/.
i dont know whether i am going in the right path for marketing in MY business or not but i have strong hope that i will succeed .
I have purchased a brouche template in graphicriver.net and customized it as my business profile.
And i am planning to give it to all the computer dealers in my city. hoping they will refer any requirements from their customer.
If you suggest in any best marketing techniques that have worked for you it would be very helpful.
Quite an informative article. Marketing is a key to increase sale and winning customer. Although it is easy to find the excuse of neglecting marketing but a small business owner can not run his business until he invests for the marketing of his product or service. He always tries to develop a marketing budget. Promotion, product, price and place are basic elements that need to run a successful business. Undoubtedly Success of business depends on investment and marketing strategies.
I am totally convinced with your post, and I really liked your last paragraph
Great arguments! As usual I enjoy your articles – even when you don’t accept my comments 😉 The truth is that every business owner needs to have a sustainable long term investment plan. The plan should contain future investments in advertising, and development. I find it outrageous that some don’t actually plan everything ahead and I consider those businesses to be failed form the beginning. In the end, how can you think of a growing business since you don’t have funds to grow it?
Re-investing in your business should not be a hard thing to do; it?s only if you are a glutton, I mean someone who see his or her business profits as something that needs to be spent on luxuries. Spending your business profits on luxuries will do no good to your business. It will affect your business and you if care is not taken. In order to take your business to greater heights, you must embrace the act of re-investing in business.
Business owners need to look at their business as an investment much in the same way they look at their personal investments in the stock market.