We are all always looking for ways we can move the needle and take our businesses to the next level. If you are like me you have spent countless hours bouncing between books (I do recommend The ONE Thing), podcasts (I like Entrepreneurial Thought leaders and Startups for the Rest of Us), blogs (I have one of those!), and signing up for new software (I have some of that too–guaranteed to save you time). Unfortunately these rarely move the needle as much as we hoped. The reason is that we are consuming content and making purchases without having a plan in place.
If, instead, we are deliberate about our investments of time and money we will have better outcomes. When we start examining the costs and measuring the results we will be able to prioritize how we deploy our resources. You know the term ROI which is an acronym for “return on investment”. Typically this is thought of in terms of expenses and revenue. A positive ROI is when for every dollar you invest in your business you get more than a dollar in revenue because of it.
These are the key ways we invest in our businesses and some ideas on how to do so with better results going forward.
This is the easiest to measure of all of the ways for an entrepreneur to invest in their business. It is the quickest way to leverage your resources and when deployed well can yield great results. Learning where to spend money on your business takes some trial and error and you will inevitably end up wasting money in the process. (To start I am thinking of the millions of dollars that entrepreneurs have wasted on Adwords campaigns that did not yield any customers. I speak from experience.) Grizzled business veterans might refer to that as tuition costs–money you spend to learn something that will help you in the future.
One method of helping make sure you are spending money where it will have a positive ROI is doing a cost benefit analysis. This is a process that large businesses go through before making big investments in people and equipment. It compares the expected lifetime costs of a project with the projected lifetime benefits.
- Direct costs (both initial and ongoing)
- Indirect costs (e.g. training) – estimate a monetary value of these
- Increased revenue
- Decrease in expenses (money spent upfront saving you money in the long term)
- Increase in focus (on product and customers)
When the benefits far outweigh the costs then you have identified an investment that will push your business forward.
By forcing yourself to do this analysis you are reducing the impulse purchases which promise to save you time and make you money. So many of those “investments” result in months of waste as you never fully get around to implementing them.
Time is said to be your most precious resource. You can make more money but you can never make more time.
All that matters is the way that you spend your time.”Joshua Reeves (ZenPayroll)
That said, time and money are very similar in some aspects. The more (time/money) you save the more (time/money) you have. Where you invest your (time/money) directly results in your return on investment as some places have a higher return than others. Some even have a negative return.
Based on this you need to learn to predict as much as possible what events, conferences, and meetings will have the highest ROI. Compare that to what you could be doing if you were working directly on your business. Start saying no to more invitations for coffee or nights out drinking. Guard your time like it is a pot of gold.
However, there is something to be said about serendipitous meetings and if you do not put yourself out there some opportunities will pass you by. (I wrote about a concept called “luck surface area” that is worth a read.)
We are making a distinction between time and energy because time is a finite resource while energy can be replenished. Being able to apply greater energy to your business in the time you spent working on it is a great lever for growth. Coupled with the right skills (see next section) this will have the greatest impact over the long term for your business. (Investing money can have a larger short-term impact.)
Your energy comes from your mind, body, emotions, and spirit. Each of these affects and is affected by the others. When all are aligned you feel you can conquer the world.
The mind is the application of your energy. You might sometimes say that you’re “not in the right frame of mind” for a task. What you really mean is that your mind is being pulled away from the task by a lack of physical energy (maybe from being tired), that your emotions are affecting your concentration, or, most troubling, you no longer find purpose in that task.
Multitasking can have a negative effect on your mind as you are not able to focus your energy on one thing. If this is an issue for you then you might want to try out time blocking.
The body is where your physical energy comes from. Sleep, exercise, and diet are the fuel that your body requires. When one suffers you will not be operating at peak efficiency and thus unable to sustain any significant stretches of energy.
Emotions are what determine the effectiveness of your energy. When you are experiencing negative emotions such as anger, fear, or sadness you are not going to be as effective at the tasks you are attempting to perform. When you are experiencing positive emotions such as happiness you are going to be able to bring greater energy to your tasks and they will get done better and quicker.
The spirit provides purpose to your energy. Your purpose comes from deep inside you. As an entrepreneur you probably have a good idea what your purpose is. When you get out of bed in the morning you cannot do anything but work on your business. It is what you are meant to do. So, should you find yourself applying your energy to tasks that are not part of your purpose negative emotions start cropping up and your output wanes.
If you effectively manage your energy you can bring your best self to your business, family, and friends day in and day out. In order to do so you can use a series of quick fixes and long-term solutions. The long-term solutions might be diet, exercise, meditation, therapy, etc. For me the best short-term method for a quick recharge is a midday walk. I call it rebooting the brain and the fresh air, light exercise, and deep breathing clear my mind and recenter my emotional core.
A quote that I love:
You will be the same person in five years as you are today except for the people you meet and the books you read.Charlie “Tremendous” Jones
Applied here that means that if you do not invest in learning new skills, either through reading or learning from others, you will not grow as a person which will make it impossible to grow your business. Your business is where it is at today based on everything you know as of today. If you want a different result tomorrow you have to try something new and that comes from acquiring new knowledge and skills.
Every person learns differently so there is no one right way to learn new skills. I learn better by doing as compared to reading a book or watching a video. When I hit a wall I will reference those but for me practice trumps theory. The important thing is to identify the way you learn best and then to set aside some time to learn prior to there being an immediate need for that skill. When there is a fire the time constraints keep you from learning the new skill effectively.
There is a line where you need to ask yourself if a new skill is worth learning or if it is something you should hire for. Few of us get a cavity and think we should learn dentistry in order to fix it. Too many of us have no business doing our own books, taxes, or drafting contracts. If a new skill can be applied to your core business functions then it is worth learning. If not then your energy will be misplaced.
Your successful business
A successful business is not a product of what you learn but a product of what you do. Being deliberate about how you invest your money, spend your time, use your energy, and learn new skills will show you what levers to pull and when. This simple planning will have as big of an ROI as anything else you do and will be the catalyst for growth that you have been searching for.