When to Invest in your Business … This question has been coming up in my own business these days, and I thought maybe it was a question you’re also facing!
Investing in your business is a scary thing!! For some of you, it means deciding whether or not to invest when you’re not currently bringing in an adequate revenue stream. For others, it means figured out what to invest in when you do have funds to invest. Both situations can be frightening in their own accord, and both are areas I have faced myself!
In whatever situation you are facing, I find the following 6 tips helpful:
Write down your Bucket List Investments. Some of us have quite a few things we wish we could add to our business – whether it’s an educational opportunity or a piece of equipment. I encourage you to keep a running list of the things on your Bucket List so you can prioritize them & decipher what is necessary at the given time.
Ask yourself: Is this a necessary investment? Identify whether the investment is a need or a want. For example, I knew that hiring an accountant was a need for my business. I could go no longer without having a professional to work with on this area of my business. Maybe there is a lens you feel you can no longer go without, or a design program you have been needing. Deciding whether you NEED it or WANT it (or both!) will allow you to prioritize your list
Budget, Budget, Budget! In order to know which investments you can afford to make, you must have a budget for them. My goal is to budget for 1 conference per year & 1 one-on-one session; I love community based experiences, yet I also see value in one-on-one! Therefore I budget for 1 of each per year. This allows me to allocate the appropriate funds & also look forward to each one during the year!! But I know what your’e thinking – how do you budget with variable income?! While I am not an expert, the following has worked for me: look at your income from the year before & base this years budget off of that. If this is your first year, think about how much you are willing to invest outright. For the first 10 months of my business, everything I made I put right back into my business in terms of equipment & education. That was a personal decision, and you may choose to do differently – that’s okay! Either way, having a plan of attack will be vital in planning your budget.
Ask yourself: Will this investment better my business? Why & How? Are you considering investing in equipment? Will this allow you to offer a new product/service & add another revenue stream to your business? Or are you considering education? What benefit with this educational opportunity at to your business? It’s best to understand HOW this investment will effect your business. Think about: will it save you time, will it directly effect your services, will it effect your pricing, etc.. This will allow you to prioritize the investment & decide whether it’s a want or a need!
Ask yourself: Do I have the funds to purchase this investment outright? Is there a payment plan available? When will I have the funds to pay for this investment? My experience has been to have the full amount necessary before making the investment. It has always been important for me to run my business debt-free, therefore I want to ensure I have adequate funds prior to committing. Now, that doesn’t mean a payment plan isn’t an option!! Sometimes, even if I have the funds outright, if there is a payment plan option penalty-free, I will choose that one to ensure I can allocate funds easier & less at one time.
Reward yourself with an Investment when you reach a certain goal. Now, who doesn’t love a gift?! When I celebrated my 1st Business Birthday, I rewarded myself (i.e. my business!)! It was nice to have an end-goal in site & I knew that if I reached a certain milestone, I would invest in ____. What milestones can you celebrate? Maybe when you hit your booking goal for the year? When you’ve attracted your first ideal client? Think of ways you can keep pushing yourself by gifting yourself a certain investment you’ve been waiting for!!
Have these worked for you in the past? What investment tips do you have? I’d love to hear!
xo! kat
Photography: Hope Taylor Photography /// Venue & Rentals: Paisley & Jade
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