Investing in your online business is often one of the most terrifying steps a new entrepreneur will take. Let's be honest, even as a seasoned entrepreneur, knowing when to invest and where to invest can be intimidating. So how do I know when to invest in my business? I've heard this question from a few clients this week, and I know if they're asking, you might be too! {And the answer might just surprise you!}

Investing in your online business is often one of the most terrifying steps a new entrepreneur will take. Let's be honest, even as a seasoned entrepreneur, knowing when to invest and where to invest can seem overwhelming. So how do I know when to invest in my business? I've heard this question from a few clients this week, and I know if they're asking, you might be too! {And the answer might just surprise you!}

What not to ask...

When most online business owners are trying to decide whether or not to invest in tools or training for their business, they ask themselves this question: “How much does it cost?”

I get it... I’ve made the same mistake! When you’re starting up, it's generally a good idea to keep costs down. I've been there. Money is tight when we're first starting out, and we need to be strategic about where we invest. While there are definitely expenses that I would tell you to stay away from when you are first getting started {i.e. areas where you can wait to invest}, there are some strategic investments that are important to make up-front. And "how much" isn't the right question to ask.

Instead, I run my investments through this framework:

Question #1: Is it a financial strain?

The first question I ask: Is it a financial strain? Basically, I take into account my company and it's current financial situation and ask myself "If this doesn't work out, will my business go under?"

If the answer is "no" then I move to the next question. Now you may be thinking "but wait, even though it's not a strain, it could still be a risk" and you're totally right. And the reality is: every day in business is full of risk. {Don't worry - the rest of the framework will help us decide if the risk is worth it or not!}

Question #2: Would a $____ company do this?

The next question I ask: Would a $___ company do this? {insert a financial threshold for a business that is one step above yours}. So would a million-dollar company do this? Or would a six-figure company do this? Or would someone who is making $1k/month do this? {Depending on your situation.}

I heard someone put it this way, and it really resonated with me: The reality in business is that what got you here won't get you there. If you continue to make decisions based on the business you have, you'll continue to have the business you currently do. {Think about it like weight loss... If you keep doing what you've been doing, you'll stay on the same path. One small change can make all the difference.}

So if you want to see a change in your business, do something different!

@@What got you here won't get you there... how will you invest in your future?@@

Question #3: Is it profitable?

The final question I ask is: Will this investment be profitable? What will be the return on my investment?" {i.e. How much can I gain by investing this time and/or money into my business?}

One of my favorite examples of smart investing is the show Shark Tank. When Mark Cuban is about to drop a million dollars on a new investment, what does he ask? Does he say, “How much does it cost? Can I afford to spend a million dollars?” No! Instead, he says, “What’s the return on my investment going to be? If investing a million dollars will yield ten million, then I'm in. But if it won't, then I'm out.” Mark Cuban’s strategy should be our strategy as well {on a smaller scale, of course!}.

There are two mini-questions that help me frame return on investment:

(A) Do I need it? With where I'm currently at in my business, do I actually need this to move my business forward? Will I use it?

For example, if your biggest gap/most important need right now is learning how to close the sale, then investing in my course on Pinterest isn't what you need, but a course on how to close the sale would be perfect! This sounds so simple but you would be surprised how many ladies come to me because they've invested thousands of dollars in training or in fancy websites, but they are missing the basics.

(B) Will I get $X of use from it? Entrepreneurs  know how to turn $1 in to $2 and then $2 into $4, etc.

Putting it all together

So let's walk through an example... You've written down each of your needs, and you need a new printer. The printer is a $150 investment, including paper and ink.

  • Question #1: Is it a financial strain? No. A $150 printer will not break the bank for my business. If the printer doesn't work or if I never use it, I will still have a profitable business.
  • Question #2: Would a $____ company do this? Yes. A $XX company would have their own printer.
  • Question #3: Is it profitable? (1) Do I need it? Yes. Right now, I've been going to Office Max and driving 15-minutes each way to pick up my printing. (2) Will I get $150 of use from it? Absolutely. Not only will I save money no longer having someone else print it for me, but I will save time no longer having to drive back-and-forth to pick up my printing.

Final Decision: Yes, I will invest in the printer.

How much should I be investing in my business?

The first few years in business are the most critical, and my opinion is that it's wise to invest a significant amount of earnings back into the business to fuel momentum and fast-track success. Investments can be supplies like a printer, training, marketing, advertising, coaching, support staff, or a host of other tools.

The key to growing your business is to identify your weaknesses and determine where to invest to alleviate those weaknesses.

@@If you want to see a change in your business, do something different!@@

Take Action

Determine today where you need to invest in your business. {Don't worry if the list is long, you don't have to invest in everything today!}. Rank your needs in order of importance, and before you make your next business investment, run it through this framework!

You're Invited!

And if you're still struggling and need help growing your online business, make sure to sign up for this week's FREE Workshop! Inside this workshop, you’ll learn the three things you can do TODAY to save time, increase sales, and improve your bottom line. Click the link to sign up today.

During this FREE Workshop, you will learn:

- The mistakes that cost people hundreds {or even thousands} of dollars in their first month of getting started - One mistake that's costs even the biggest marketers leads on a daily basis - How to overcome fears that your product isn’t “good enough” - What you need to do TODAY to protect yourself from future mistakes.

Take advantage of this FREE Workshop where I'll break down exactly what I did to transform my own business, save time, and double my sales. And more importantly, what you can do to ensure you don't make the same mistakes I did!

Click here to sign up now: http://rachelmcmichael.com/workshop/

How do you make decisions on where to invest in  your business?

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