A speaker was addressing a group of advanced students who were about to graduate and embark on professional careers after many years of school. They may have been doctors, nurses, lawyers or counselors. The principle remains the same.
One student had a question. “How do we deal with all the stress?”
The speaker’s answer was simple, “Don’t buy a big house.”
I thought of this when I saw a forum from Julie, who was starting a business while still working in her day job.
Julie was getting extremely frustrated. She was paying a coach, a bookkeeper, a graphics specialist to prepare social media posts, and a finance pro to help her assess her financial picture.
She had the business equivalent of buying a big house…in fact, it was not unlike building a mansion.
Julie got a lot of encouragement, but that’s not what she needed. She needed a plan.
A lot of business coaches like to focus on revenue. They either ignore expenses for resources or they encourage business owners to spend more. “Don’t be afraid to invest in yourself,” they say.
I’ve known a number of business owners who enjoyed financial success, only to lose most of their hard-won assets by spending lavishly on their businesses.
I’ve also met successful business owners, those who consistently earn high income, who are very “hands on.” They buy resources and pay for support, but they watch the bottom line.
One business coach answers every query himself and makes appointments without a calendar app. He says it’s more personal and easier in the long run.
A software creator edits all her own training videos. “I know what I want to change,” she says.
A high-end business consultant makes all his own graphics. “I know how and I like it,” he says.
A successful author designs her own ebook covers with low-cost design software. “I can’t see a reason to hire a designer,” she says, although she could easily afford one.
Some coaches could criticize these business owners. They might ask the sarcastic question, “Is that really how you want to spend your time?”
But these business owners doing well enough to tell any critics to go fly a kite.
And the truth is, sometimes spending less will actually make you more successful.
(1) Know what’s out there.
In my early business days, I tried working with a bookkeeper. I had to fit into her schedule, give her lots of info and check her work. But software seemed even more time-consuming.
One day another business owner told me about a particular brand of accounting software. To my surprise, a lot of entries were automated. Many banks, credit card companies, and payment services could be set to make entries as they were posted. Every month, I can just make sure they’re classified correctly, add a few entries from the one bank that won’t integrate, and I’m done. Less than an hour ..for less than 10% of what a bookkeeper would charge.
This approach worked for my landing page software. I love the products and didn’t want to move to a cheaper product. Another colleague, teaching a webinar leader (earning a very comfortable high-end income), told us she’d just dropped to the very basic level. I did the same and, as she predicted, I don’t notice a difference.
All too often I see people opting to buy more than they need because they just don’t know what else is out there. That’s like building a mansion because you didn’t know where to find a smaller house. Ask lots of questions in mastermind groups, webinar Q&As and anyplace people in your industry hang out.
(2) When you’re moving in a new direction, make sure you understand the client’s backstory before spending significant sums to grow your business.
Get a few clients, or make a few sales, before spending large sums.
Let’s say you want to help newly divorced women deal with money challenges. Their backstories might be, “I got a big cash settlement and need to invest wisely.” Or you might hear, “I need to find a way to reach my goals on a smaller budget.”
When you tell people about your offer, they seem enthused.
Your next step is to get up a one-page website with an option for paying by Stripe, not a high-end shopping cart. You can do this yourself or pay a low-cost developer on Fiverr to set it up.
Now you call the people who seemed interested.
If they are, you’re on your way. If they hem and haw and ultimately say, “No thanks,” you’re back at the drawing board. You haven’t communicated value…or you’re targeting a “nice to have” or a group of wishful thinkers.
One business owner waited till she got a few hundred people on her list. She offered a $97 product. Ten people bought. She knew she was onto something.
Another business owner was friendly with a successful marketer. He agreed to let her have a solo email promoting her services to his huge list, in return for a share of the profits. She completely filled her consulting practice: her offer combined with his endorsement. She didn’t have even have a website.
If you put out similar feelers and get crickets, it’s tempting to throw more money at the problem. That’s like building a house before checking out the land. When I lived in the southwest, I had a neighbor who did just that; he bought the land and hired an architect before he realized he had no way to get water on the property.
The equivalent of checking for water: find your client’s backstory. Understand all the dimensions of the client’s backstory so you won’t be caught by surprise.
Ironically, some people actually earn more money when they face their budget straints. They spend money only for what’s absolutely essential to target the client’s backstory. They create a tight, focused message. They concentrate their marketing on one activity till they master it.
You can always find mentors who will urge you to hire more support and buy more software. Hold out for discovering your client’s backstory and remember: a lot of times, less will be more.