How to Consider and Make Business Investment Decisions (& Feel Good About Them!)

for bookkeepers for business owners podcast Mar 14, 2022
business investment decisions



Welcome back for another interesting post about how you can grow your business and achieve the freedom you yearn for in your life. Today, I want to talk about how to think about investments. This can be a daunting thing, but it doesn’t have to be! 

Let’s talk about how you can think about investments, plan for them, and decide to make them even when there’s a risk involved. Making sound investments can make you a better business owner, even if they end up being something you learn from rather than earn from. The truth is that investments can be expansive instead of scary. Let’s get into that more below.



Setting the Investment Stage 

First, let’s be clear that a “big” investment is different for every person. For that reason, the dollar amount doesn’t really matter. But if you’re pausing when considering an investment, it means that it’s a big deal to you and it feels potentially risky in some way.

So what I think about first when it comes to investment is - is this the right move for me? Is this the right program or person? Have I asked all the right questions? Is this something I’m truly ready to show up for right now?

What is the minimum timeframe that I need to allow this to work or show progress? Usually, I recommend 90 days, as that’s a good amount of time to see proof that something is working. 30 days is not enough time, because you’re just getting going. In 90 days, things start to come together and you gain momentum.

I’m going to use Facebook ads as an example. How long would it take to know if it’s going to work? In 90 days of running ads, you should get an idea of whether it’s going to allow you to make more profit. If over 90 days you’ve gotten better at it and closer to your goals, you’re on the right trajectory.

The point of this is that you need to decide on the timeframe you’re comfortable with waiting out from an investment to see if what you’ve invested in is going to work. Write that down.

The next question is what will that cost? If you’re running 90 days’ worth of ads, what’s the monthly ad spend budget and agency fee? Calculate that and then understand what the total cost is of that investment for the minimum amount of time to see it work. So let’s say it's 90 days and $4500 for 90 days. That number means that if you make NO sales and the whole thing flops, you’ll have spent $4500 total and that’s the worst-case scenario.

The third question to ask yourself is, “can I afford it?” Do you have the cash to invest in this? If not, what do you need to do to get the money to invest so that the worst-case scenario doesn’t seem so bad? Find a plan to pay it off EVEN if the worst-case scenario occurs. This could be opening up a zero percent credit card and giving yourself 12 months to pay it off. Or you could take on a side job, sell things around your house, or use many other avenues to get the money you need.



Showing Up for Your Investment 

From there, you need to prepare to bury the investment and never see it again. Finally, it’s time to SHOW UP for the full length of that trial period that you said you need to see if it’s working. Be the person you need to be to get the results you want and resist the urge to judge during that time. So, if you allot 90 days to run ads, show up as a creative person who is ready and able to run ads. Stay in that mode and don’t pass judgment along the way. You have 90 days to make it work - make the most of them!

If you’re not doing this, you’re not giving it a fair shot and you’re sabotaging. You need to show up, follow through, and do the work. Then, when the time frame is up - in this example, 90 days - you can sit and know that you did your part and evaluate if you received the results you want. Ask yourself if there’s proof that it’s working and if you want to continue and renew what you invested in. 

Now it’s time to zero in on what risk is scarier. Is it the risk of being embarrassed from spending the money and it not working? This is something that many people take on, but usually people are NOT judging you as harshly as you think they are.


Understanding the Risk of Not Trying 

But what’s the risk of not trying? What’s the risk of not knowing what could have been? This is something that you need to consider. Because it’s a real risk. Do you want to take the chance of never knowing what the investment can turn into? Will it bother you? Will it keep coming back up as a dream or as something you really want? 

So which risk is scarier - the monetary risk or the risk of not trying? Even ask yourself - this is kind of morbid - if you’d think about not taking this risk or trying this thing on your deathbed. Are you going to remember the extra money you saved by not investing or will you regret not trying?

Remember that the cost is finite, but the possibilities of what the investment can bring you are infinite. 

Even the things that I’ve tried that haven’t worked haven’t caused me regret. That’s because it was something I was thinking about for a while, then I put the money and effort in, and come judgment day, showed me it wasn’t for me. The reason I don’t regret it is because that allowed me to put that idea out of my mind. These things have given me priceless amounts of clarity that have unveiled the next step forward and have opened up my brain space for other creative thinking.

Sometimes the results aren’t what you think they’ll be. But the clarity you receive is part of the journey and it leads you to your next step, which collectively becomes a life-changing endeavor. Your investments - even the ones that fail - can lead you down a new road, cause you to pivot, and allow you to find an amazing space you never even sought to find.



The Money Tree of Investing:  The Bottom Line

Let me leave you with a metaphor in thinking about money. Let’s think of a money tree. You have seeds for the money tree, and that’s the amount of money you need to invest in what you want to try. You have to start at the soil line - which, in my head, is a profit or loss chart. It’s zero. Above ground is a gain, below is a loss. You take the money you need for this investment - the seed - and bury it under the ground. You have to get comfortable with the fact that it’s essentially gone at this time and that you’re currently at a loss.

Cover the seeds with soil and trust those seeds to turn into something once they’re properly tended to. Below the soil, you’re building the roots, watering the seeds, and giving them time to shoot up and blossom. Even when they haven’t sprouted yet, you need to show up and tend to them. Water the seeds - it’s SO important. 

You can’t just plant them and ignore them and then wonder why they haven’t sprouted. Patience is needed because there’s a period where there’s a lot going on under the soil. Through all of that, you still need to show up and water the seeds and nurture them and learn how to take care of them. That will allow the tree to grow and thrive for years and to sprout into new beginnings that you will enjoy for a long time to come. That’s how I see the investments that I make. 

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