February 15th, 2021 Taxloopholes.com Advisor
I recently sat down with Tara, a business owner, who was having trouble with the marketing pillar of her business. She had made it a goal to get new clients and her marketing department head had a ton of ideas on ways that they could market the product line and get the word out, but Tara struggled with many of her ideas due to cost constraints. So, she more often than not said “No” to marketing experiments and trials for fear of losing money on failed experiments.
Now most small business owners struggle with cash flow issues from time to time, this is nothing new. But for Tara, her inability to pull the trigger on some key financial decisions was impeding the growth of her business.
Have you ever found yourself saying something along the lines of:
“Sending my staff through a key training program costs too much.”
Or, “Testing out a pay-per-click lead generation funnel costs too much.”
What’s wrong with this frame of reference is that it sees only a price tag and makes a decision on that one piece of information. But in Tara’s case (and maybe yours) there is a lot more to a decision than just the price tag and you are doing yourself an injustice by just looking at the monetary side of things.
The most successful entrepreneurs look at the big picture and consider what else they could gain from such an experiment or expense, even if it ends up being a failure on the surface. They ask, what’s the cost of the status quo? What rate of return should I expect from this investment? What is my risk in making this investment and how can I hedge that bet? What happens if I don’t make this investment?
When you ask these other questions you can reach a more powerful answer.
After talking to Tara a bit more, I learned that they had one main channel for customer acquisition and really hadn’t tried much else in terms of marketing. So, by saying “no” to anything new and risky, she was limiting her companies ability to grow and learn from their experiences.
So, if you find yourself saying “It costs too much” too often consider stepping back and looking at the expense objectively. If it fails to yield the results you wanted, would your business learn a lesson from that failure? If the answer is yes, then you might want to consider giving it a go.
Tip: Don’t forget to document your experiments to build upon in the future. This will allow you to make informed decisions and prevent others in the company from making the same mistakes twice.