#122 How to decide where to invest in business
A lot of the work I do with my clients is strategic in nature and one of the things I ask them early on is what they stand for in business. When it comes to deciding where to invest in your business, there is a lot of noise out there about what you should be doing. That’s why it’s critical to understand what you stand for so that you can make informed, sustainable decisions that align with you and your business.
In this episode, my goal is to help you navigate the often confusing world of business investments. I’m not talking about stocks or trading, but the internal investments that can make or break your business, such as engaging with contractors, investing in a coach, upleveling your website or social media advertising.
Knowing where to invest in your business can be really daunting. There are endless options out there. As business owners, we need to be crystal clear on why we do what we do and stay grounded amidst the alluring quick fix promises that we’re bombarded with on a daily basis.
So today I’m sharing the three critical questions every business owner needs to answer before making any business decisions - What do you stand for, what drives you, and what are your goals?
I’ll guide you through what it looks like to get clear on these questions and how the answers directly impact your investment decisions. Whether you’re just starting out or you’re a seasoned business owner, if you want to make strategic, growth-focused decisions, gaining clarity on these questions will help cut out the noise and make your decision making process so much more simple.
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[00:00:00] Tracey: Hello everyone. Welcome back to another episode of the Rise Up in Business podcast. Thank you so much for tuning in. In today's episode, I'm going to talk about a question that's coming up a lot for me with my clients lately, and that is how do I decide where to invest in my business? I'm not talking external investing like shares and trading, talking about business decisions that are an investment.
[00:00:44] And this has come up a lot over the last couple of weeks in the business because of the time of year and people are reevaluating where their money's going and they're looking at upleveling and taking things to the next level. So what that's meant is there's more contract review work coming across my desk clients and engaging with third parties to bring on contractors or suppliers or whatever the case may be.
[00:01:05] And they're asking me to review contracts that have been presented to them or draft new contracts for my clients to issue to the contractors, for example, and what I'm witnessing is that the decision making around investment has become a real pain point for so many small businesses, and I wanted to record this episode to deal with that.
[00:01:23] I'm not surprised. Can I just say I am not surprised at all? There is so much noise at the moment. In fact, I think there's been so much noise for quite a while, but it just doesn't seem to be quietening down when it comes to all the things that business owners should be doing. And what I see is that it makes staying focused really challenging.
[00:01:47] We should be doing this, we should be doing that. This person's doing this, this person's doing that. Oh my gosh, the pressure, the money, it all costs money. Am I doing the right things? Oh, I don't know about you, but for me it's too much. And about 18 months ago in my business, I declared, and you would've, if you're a longtime listener, you would've heard me on here declare openly, "I don't do overwhelm" cause I was the sort of person that would go into overwhelm quite easily with all the different moving parts coming at me all of the time. But since I've paused and taken a breath and made that declaration over 18 months ago, I don't do overwhelm in my business. I don't buy into it and I don't get caught up in it.
[00:02:27] But the reason I'm able to do that is because I'm able to stay grounded and anchored to my why. And I'm crystal clear on what drives me. So what I see is when my clients and some of them are new clients, when they're reaching out to ask me, where should I be investing? Can you give me some advice? Let me just be clear also, they don't ask for financial advice. They don't ask for accounting advice. We talk business strategy. It's very different. I do a lot of strategic work with my clients. One of the things that I ask them very early on is, what do you stand for in your business? And the silence on the other end of the phone or the blank look, I guess if we're on a Zoom, says to me that that's where we need to be spending some time helping clients get really clear on what they stand for, because from then, we can work out what decisions need to be made and where the money needs to be spent.
[00:03:22] What I see a lot of, and I'm sure this is resonating and I'm sure you're seeing it too, and you'll be nodding along, saying Yes, Tracy, I see it too. What I see a lot of in the small business space at the moment is the desire for a quick fix because there's so many people or businesses out there selling.
[00:03:43] Yeah, quick fixes. It's very much like weight loss, isn't it? Where we get lulled into this sense that there's a magic pill that you can take, to lose the weight and get the dream body and live happily ever after. It's similar with the messaging as I see it for small business owners Here, do this quick and you'll get all these Instagram followers and I can guarantee you sales and, and get this many people on your email list.
[00:04:05] And oh, honestly, it's so off-putting. Just as much as the weight loss industry because as we know, as educated business owners, there is no quick fix to weight loss and there's no magic pill. We've gotta do the work. And as we know in business, there is no quick fix to earning a million dollars or turning your business around or doubling your revenue in the next 30 days.
[00:04:29] You've gotta do the work there's no quick and dirty solution. To growing the business and achieving what you wanna achieve. It takes time and it takes doing the work. So when clients are asking me about whether or not this is a good decision to be making, cause I'm involved in their businesses for quite a while, and we make these strategic decisions together, I like to pause and ask three things.
[00:04:53] So I'm gonna share those here so that you know what it is that I work through with my clients when they are considering I. Budget and financial planning and the spent, so the first thing I ask is, what do you stand for in your business? The second thing is what drives you? And the third thing is, what are your goals?
[00:05:10] If we don't have clarity around what a business owner stands for, what drives them in their business and what their goals are, it's very difficult to make informed sustainable decisions in the context of investment. Bringing on contractors, investing in a coach, investing in social media. Should I invest in Facebook ads?
[00:05:29] Should I uplevel my website? Do I need a web designer? Do I need my graphic designer to do this? If we don't know the answer to those three questions, it's very difficult to make well-considered grounded, sustainable decisions. It almost feels like throwing spaghetti against the wall and hoping something sticks, and that it might turn out all right.
[00:05:49] So with that, knowing what you stand for in your business will very much help inform you moving forward where your logical next investment sit. if you stand for creating a soul led, purpose driven business that supports service-based businesses or product-based businesses, You start getting a clearer picture of what that looks like and you know who you wanna serve, so you know who you wanna talk to, you know who you wanna reach, and you know what you want to do.
[00:06:22] What drives you is the next most important thing. You may be driven solely by money, which means it's inconsistent with the example I just gave of what you stand for, but that's okay. I'm just throwing the examples out there. But if you're driven solely by money, then negotiating the cheapest deal and the cheapest labor and the cheapest person are gonna be really important to you.
[00:06:40] And quality and sustainability and connection and customer service are going to be less important. But if you're like my clients, what drives you won't be money. Money will be important to you. You will like money. I like money, but it doesn't drive me. And I spoke about this a lot on the podcast last week, so if you haven't listened, tune in.
[00:07:01] That was a really great episode. But what drives you might be things like peace of mind, security, balance and time with your family, providing quality services for your aligned clients. Those things might drive you, in which case that will help you. Understand where to invest in your business because things like the right business structure to protect your assets, to protect your family is going to be really important and it will be a no-brainer that you should be investing with a good accountant to get yourself set up right.
[00:07:35] You should be investing with a good lawyer to get yourself set up properly. That's where I come in. In terms of terms and conditions, client service agreements, compliance with your obligations under the Australian consumer law. That's the work I do, and I work with clients who are driven by the desire for that peace of mind so that they're not left lying in bed at two o'clock in the morning, wondering if this thing that they just did with this client's gonna bring them unstuck because are they protected?
[00:08:04] Is the client gonna ask for a refund? Are they likely to receive a damages claim? Whatever it might be. Those business owners who are clear that peace of mind and security and protection for their family is one of the things that drive them. They're my type of clients. That's the type of work we do. So it makes it really easy to prioritize investing in working with a business lawyer to get your legal documents set up.
[00:08:27] And when you know what your goals are in terms of your team, your client base, who you wanna connect with your annual and monthly revenue, it makes it much easier to make decisions that are reliant. Do I need this new Ubu photocopier slash printer plus plus scanner in my business at the moment? Well, no, my goal is to reduce my debt or increase my profit.
[00:08:50] I don't actually really need it because I don't do much, even though it's bright and shiny and it looks great. No, I don't need that. For example, do I need this digital notebook right now because I love new, bright and shiny things? No, because I'm already investing in a pay rise for my team. so therefore I might revisit the digital notepad.
[00:09:10] Next quarter. They're just little examples because obviously the types of decisions you'll be making depend on the scale and nature of your business. But they're just some little examples on how understanding what your goals are can really organically and, and usefully and helpfully feed into your decisions around where to invest.
[00:09:28] So if we're investing in things like new shoes, And new handbags and fancy designer clothes just so you can jump onto social media and take photos. And everyone knows you're wearing a designer. Chances are you've got different drivers in your business to somebody who really wants to increase their profit, increase their team.
[00:09:49] Build more time into their calendar and have some more time with their family. I'm not saying the two are mutually exclusive and there's nothing wrong if you are resonating with the first one. There's nothing wrong with it at all. This is not a podcast where I'm trying to say this way's right and this way's wrong.
[00:10:04] What I'm doing instead is shining a light on all the different drivers. And different priorities and different goals for different business owners, which is why it's no one size fits all. And when you get clarity around what you stand for, what drives you and what your goals are, because yours will be different to the next person.
[00:10:21] When you get that clarity, you can make in informed decisions on whether or not you wanna work with that business coach, whether you want to join that mastermind, work with that lawyer, engage that accountant, have a bookkeeper on your team. Get a social media manager. All of those things are investments in your business and everybody's going to have different priority lists and that's okay.
[00:10:44] So this is the formula that I work through when clients reach out to ask me should I bring on this contractor? We work through these types of questions. I'm certainly not the be all and end all when it comes to the decision making, but I am an advisor and for most of my clients, I'm a trusted advisor.
[00:11:02] And they rarely enter into new things without either having me draft their contractor agreement or review their new agreement that somebody's produced to them, they rarely I. Do things in isolation of reaching out to me at some point, and even if it's the annual review or the biannual review, they'll reach out and say, let's regroup.
[00:11:20] Let's have a strategy session. Wanna bring you into the loop on all of the things. I've now got these offerings. We need to tweak this. This is why I've done it. I'll then ask the question. Sometimes when we are drafting those documents, well, hang on, you've got this new offering, but you've just said you're gonna include all of these things, but that's not aligned with what you told me.
[00:11:36] That really drives you and what you wanna achieve. do, we need to remodel this? When I'm drafting those terms, when you're talking about your inclusions, those are the types of big picture, holistic discussions that we have, and Those types of discussions are part of what really lights me up because that's where I add value and I can enrich their journey by adding that second set of eyes as the trusted advisor and helping work through those decisions.
[00:12:01] So making decisions about where to invest in business is not necessarily easy. It can be really challenging. It's becoming more challenging, I think, with all of the noise that's around. What I'm hoping to do in this episode is provide you with some grounding and just share with you how it is that I work through these types of decision making processes with my clients, and it will come as no surprise to learn that I apply this same approach in my own business.
[00:12:27] Regularly when I sit down to work out, is this a good choice for now? Is this a wise decision for now? Should I park that for next quarter? And I do that. And I do it regularly. But I have found over the years that this approach, this formula works. It works for me. it works for so many of the clients whom I work closely with in this space. So I'm hoping that you'll be able to take some value out of this and that some of this will work for you too. If it is the case that you have listened to this and some of this is resonating and you think, oh, I'd really like to ask you about that, Tracy, or, I'd really like to understand a bit more about this part, or, yes, I've been thinking about this, how can we work together?
[00:13:03] Please don't hesitate to reach out and book in a time for a chat, so you can send me a DM on Instagram or you can jump over to the website, tm solicitor.com au, and you can book in directly there into my calendar, a time that suits you, and we can have the conversation. Just have the conversation and see where it is that I might be able to add value and see if I can help clarify things for you.
[00:13:25] Thanks for listening. I'll catch you next time.
LINKS:
Previous episode mentioned:
Getting Personal: What REALLY drives me in my business
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