If you’re committed to success you’ll buy this.
If you don’t have the money use your credit card.
You need to spend money to make money.
Sound familiar? If you’ve spent more than 30 seconds online as an entrepreneur I’m betting the answer is yes. Like all good lines, there’s a kernel of truth to each one.
Are you serious or a sucker?
Learn when to spend the big bucks, and when to shut your wallet.
This post is part of a monthly word carnival hosted by small business experts. This month’s topic: Dirty Deeds and Due Diligence – what to watch out for in 2015! The New Year is bright with all sorts of new ideas, but in certain circles there’s still plenty of shady tricks and underhanded practices that we think should be called out.
When Committed Should Mean Cash on the Table
Just recently I received a newsletter where the “expert” was telling her audience “If people won’t buy your high end package it’s because they’re not serious.” What the what?!? Maybe it’s because they don’t have the money. Maybe they have other, more pressing needs. Maybe they aren’t convinced you can deliver a real return on their investment.
I’m serious as a heart attack about my business. I don’t need to spend big bucks on a so-called guru’s gold plated offering to prove it.
It’s one thing to say hey if you can’t afford my comprehensive fundamentals book for $20 then you aren’t serious. It’s quite another to say if you don’t buy my program for $5,000 you just aren’t serious about success. I’m serious as a heart attack about my business. I don’t need to spend big bucks on a so-called guru’s gold plated offering to prove it.
Does that mean you should avoid all high dollar investments? No. It means you need to step back and carefully consider your current needs, your long term goals, and your budget.
Here’s a quick way to evaluate a purchase. Rate the following statements on a scale from 1 to 5, 5 being agree strongly. Be honest with yourself, or your bottom line will suffer.
- This directly supports my long term goals.
- This is my most critical need as a business.
- This will grow my sales.
- This will grow my profit.
- I don’t have the expertise to do this myself.
- I don’t have the time to do this myself
- There is a clear contract that outlines services I will receive.
- The contract includes clear language describing any promised results, warranties, or money back guarantees.
- I expect my bottom line (profit) to grow by more than what I will spend. (In finance speak, this is ROI)
- I have the funds available to invest.
Add up your numbers. If you scored less than 20 this is NOT a wise investment. Look for a budget friendly alternative. A score between 20 and 40 means you need to do more research, seek out trusted colleague’s opinions, revisit your goals and budget. Rated above 40? This has potential to be a legitimate time to open your wallet. Be sure to get a clear written agreement before putting money down.
Because I recognize that you, my ideal client, aren’t one size fits all, I offer a range of options to fit any budget. Just starting out? Get my comprehensive book on the basics “How to be a Finance Rock Star: The Small Business Owner’s Ticket to Multi-Platinum Profits” on Amazon. I also offer self-directed ecourses (gamified for fun!), consult with entrepreneurs one-on-one, and even have a Timeshare CFO package.
The newsletter? I unsubscribed.
Credit Card Catastrophes
Small business credit card debt of $20,000, $30,000, even $40,000 or more. Entrepreneurs swimming in high interest debt, barely able to tread water. Pressured into big ticket purchases, or lured by the non-stop upsell (because serious business owners invest ya know), they’re left with big bills and small bank accounts.
Sound melodramatic? The small business equivalent of the guy who had his kidney stolen.
It’s not. I’ve personally heard this story time after time.
Let’s get one thing absolutely clear. I’m not judging people in this situation. We’ve all made mistakes. Mine are too numerous to list here. For those struggling to succeed, I fervently hope they do. For the rest, I want to help you avoid this pitfall. By acknowledging it’s real, and it does happen to smart, hard working, serious entrepreneurs we can start to fight it.
Here are common sales lines, and how you can counter them.
“Just put it on your credit card. By the time the bill comes you’ll be able to afford it.”
Response: If that’s the case then just bill me in 30 days or do a payment plan. Then we’ve both got skin in the game.
“Don’t worry, we’ve never failed to deliver.”
Response: Great! I’d love to see a guarantee in writing. If I do everything required and this doesn’t work, you’ll refund my money right? If you’ve never failed then it’s no risk for you.
“You need to act fast. I can only hold this offer for a few hours. Don’t miss out!”
Response: Wow I must be really, really lucky. I just happened to find you and this deal at the exact right moment. It’s a fast action deal? So someone new could get it in 2 days, but I couldn’t? I believe in taking thoughtful action, my mom always said to look before I leap. Regretfully I’ll have to pass.
High pressure tactics should send you running for the door. Real value has staying power.
Spend Money to Make Money
Back at the top of this post I pointed out that all these lines had kernels of truth. This is the most insidious of the three. By over simplifying it masks the pitfalls. In this case, the profit devil is definitely in the details. Here’s what it needs to say:
Spend money based on careful financial analysis to make money.
Not nearly as sexy is it?
There is a time and a place to spend money on your business. Only you can decide when that is after careful consideration. Anytime someone uses this line to push for a sale take a step back. Big red flag if the main selling point is it takes money to make money.
Have you had an experience with this? Was your second cousin’s best friend’s boyfriend the kidney victim? Sound off below. Disagree with me? Great! I want to hear that too. We learn and grow through courteous discussion and debate.
Interested in exploring if we would be a fit for one-on-one consulting? Fill out the info below and I’ll get you on the calendar.