Risk and Investment
Let me get one thing out into the open right now.
If you won't take a risk and if you won't invest into your business ... It's just not going to happen unless you are incredibly lucky and fall over something so high demand so unique that everybody wants it.
So I'll write this article based on the probable reality that you are not one of the above, you are a business that needs help but isn't sure which way to turn.
Over the past couple of decades working with clients there are two big things that continually raise its head. These two things strike fear into new business owners and even long term businesses.
One is risk.
Two is investment.
So let's really break this down.
You know I honestly believe there is more risk in life from doing nothing. I've always felt like that. No risk in life is a life un-lived. Business is the same. If you don't take a risk of some sort you have a business that is un-lived.
I have or should say had a client that had a great business. The idea was good, the service and product was great and they had been in business for some forty years. His father had built the business from the ground up. You could say it was old school in the way it thought. You know create great stuff and people come and buy that great stuff.
The father died and left everything to his son.
The son knew what to do and knew exactly how to run the business.
The big problem was this.
New Customers Needed
This business needed new customers and needed new customers really fast. They had cash in the bank and certainly had the time to do this yet they took what I call a hoarding and smal mind approach.
He knew money had to be spent but felt it was a risk. He knew investment was needed but felt it was a risk. He knew his time would've to be applied very full on, yet again he felt it would be a risk.
So his logical mind told him that investing would be the best way forward yet his un-logical heart was telling him it wouldn't be the best way as it carried too much risk.
The Real Cost
We did the math.
Every client coming into his business stayed on average around 3 years.
During that 3 year period they would spend around £19,000 in service and product.
Yet his cost for a new client would be just £100.
So let's make this real simple.
- New client cost £100
- New client spend over 3 years - £19,000
Yet can you see what happens with businesses?
The fear put him right into the moment of spending the cash he was sitting on. He saw his risk and investment over the initial outlay as high yet the reality was very different. He felt that first leaving the money untouched in the bank (just in case) was a better strategy. Yet money makes money when used wisely.
In the end this client decided to buy a new Range Rover instead he felt it was less risk and a good investment after all when clients see him he felt they would assume he is doing well due to his new car.
After forty years of a business his father had built for his family and handed over to his son due to the son's fear of risk and investment the whole company folded less than a year after his fathers death. Even the car went back!
Marketing Is Never a Cost
Marketing your business, getting mentored or good advice for your business doesn't have to be a risk at any level in fact I have never seen direct response marketing cost a client money yet.
Truly if you feel that you cannot take risk that is well evaluated and planned you really are creating a business destined to failure. If you cannot and will not invest due to your mind telling you endlessly that this is a huge cost you need to re-evaluate the information you know about business or the advice you’ve had.
I’ll share this with you before I go.
I know exactly what I am worth per hour (do you?)
Every hour I invest into my business I expect a good return.
I have spent weeks and months with no payment knowing that the end result brings a huge reward but I have to invest that time to get that reward. No risk - no reward.
A few years ago one of my clients felt the risk was too great if she did nothing. I spent around 3 months working in and on her business.
Now she had zero cash to invest and actually was heavily in debt due to bad business practice. Within one week of working with myself her sales increases (yes just 7 days) within 4 weeks her business had turnaround. By the end of year one not only did she send me a healthy bonus but she managed to pen her second business by replicating her first and today she has opened her third business using all the systems and strategies I helped her to put in place.
The incredible thing was her risk of doing nothing was so high she was actually about to lose her home. If you had tens of thousands of debt and were about to lose your home would you invest in your business? She did and her rewards were and still are absolutely huge.
So the bottom line for you is this.
Risk is part of business but risk can be reduced with expert advice.
Investment of time, energy and cash is part of business but can be reduced with expert advice.
Over the past few decades I have made my clients an uncountable amount of money.
I have also slashed risk and investment costs massively.
If you like the idea of a stronger, fitter business with more sales and profits but with less risk.
To success and happiness.
Alan Forrest Smith