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.
Final Thoughts
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.
Excellent advice, Nicole, and I love the quiz to help you evaluate when to spend and when to keep your wallet firmly shut.
Thanks Sharon. It’s my mental process before I spend money.
“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.” << YES, this a few thousand times over with some jumping up and down and excited muppet flailing. I have always had this split reaction – very emotional, very visceral – to this particular tactic: equal parts shame and rage. Thanks for validating the latter! I especially love that evaluation quiz you included – that's incredibly helpful.
You and me both. That emotional, visceral reaction is what prompted the post. We work hard for our money. It should work hard for us!
That little eval quiz is dynamite, Nicole. I’ll be sharing that one with my own clients/prospectors. We really CAN make rational decisions about this stuff. Thank you for reminding us.
Awesome Tea. I would love to have a day come when I stop hearing these horror stories. Will look at creating something a bit more robust too.
“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.”
I FINALLY raised my rates to closer to what I’m worth. After 14 years, it was past time. Even as cheap as I was before, people wanted more for less. I don’t pressure people into a sale. There’s my price: take it or leave it.
And this: “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 can relate to that. If someone doesn’t go with me, I figure that’s one of the many reasons. And like I said, even when I was making websites a lot cheaper, people would tell me it was too much money for them.
My kids can’t eat on “donate what you want while I make a website”.
Janice I absolutely, 100% agree that we should charge what we are worth. People aren’t just buying your time, they’re buying your 10+ years of accumulated knowledge. They’re buying the freedom from stress, and the chance to make more money doing what they love.
It’s a vicious circle, if we keep offering deep discounts then we are always struggling and never have the money or time to invest in our business. If your budget is restricted it’s ok to start with a DIY book or ecourse. It’s NOT ok to expect someone else to give you services for free.
That’s a big reason I wrote a book. If someone is really serious it will provide the fundamentals to get started. If they’re not why should I waste my time with them?
I hear you. And actually, I need a copy of your book, since I’m on a budget after losing my day job. Alternating between job hunting, and getting my business running full-time.
My preference would be to work for myself though. I REALLY just want to run my business instead of work for someone else.
LOVE! Wow, there are few things as annoying as high-price, high-pressure sales tactics. I don’t mind telling people things like, “If you can’t cough up $10 a month for hosting then you’re not running a serious business.” (To people who think everything is or should be free.) But that’s quite different than telling someone they’re not serious if they don’t pay thousands of dollars… for something YOU’RE SELLING. It’s insulting. And distasteful. And while we’re on the subject, don’t get me started on the “today only!” deals. Right, because tomorrow you won’t be offering this same thing to the next guy who stumbles on your offer.
The thing that bugs me most about this stuff is that whenever you or I or people with half a sensible brain write stuff like this, we’re preaching to the choir. I really want to get out there with a big virtual stop sign and stand right in front of Miss $5000 and stop her sales.
I really love your checklist/quiz. It’s EXACTLY what Miss $5000 is afraid of – that someone will actually stop and THINK. Is this affordable? Valuable? Will it help me? What can I expect? If more people did this, fewer people would get rich off slick scams. Preach it, sister!
Exactly Carol Lynn – no business owner should expect to get everything for free (see my response to Janice above). I put the $10 / month hosting benchmark right next to $20 for a book that will tell you how to make money. Can’t afford it? You should rethink the whole business thing. That’s not mean or harsh, it’s reality.
Since I can’t go out with the big virtual sign in front of Miss $5,000 I created the quiz instead. For the record I also use this when I talk to a prospect for consulting. If I can’t provide a return on their investment then I won’t bid on the work.
I’ve always been thrown for a loop with that slimeball “you gotta spend money to make money” line. I always picture a greasy Mafioso saying it to some 20-something in an alley.
“You gotta spend money to make money, kid.” “Now you wanna piece of this strip club or not?”
It just seems like a bad decision, right?
Your quiz about whether or not to make a purchase is so useful; I’ve bookmarked this post so I can come back to it when need be!
Your assessment quiz is divine! Simply divine. Not to mention brilliant.
Nicole, I’m sick to death of the “urgency” factor being used as a sales tactic. For that matter, I’ve had it up to my eyeballs with the “limited quantity” claims, as well – on digital downloads, no less! Gimme a break, people. Unless your house is on fire, you’re bleeding profusely or unconscious, urgency can go take a hike!Pfffttt!
This infuriates me to the point my jugular veins protrude: “If you don’t buy my program for $5,000 you just aren’t serious about success.” That sly little devil of a statement has one purpose and ONE PURPOSE ONLY – to get you in the guilt pocket. At a minimum, it’s a tactic that’s shameful and cruel.
Thank you for doing your part to protect small business owners from being taken for a ride and for helping them (us!)to be clear whether investments will provide a positive ROI.
You ROCK!
Carol Lynn sent me the link to this post. We were discussing a Webcast I ended up listening to with just such an individual. She was doing a “hard sell”. I love this post. I don’t understand why people don’t realize that there ISN’T a shortcut to success. Granted, you have the couple of people that get a break and someone grand finds them and blows them up on social media. But, even they have to work really hard to maintain that level of notoriety. Everyone has to put in their due diligence. Everyone has to work hard, tread water and keep trucking along. There is no “Secret Formula” yet, everyone seems to be selling it. The formula is, work your butt off. Don’t give up. Let your customers know they can rely on you and your product. Absolutely Great Article, Awesome Message..
Your checklist is gold. Everyone should have it printed and on their wall for constant review! Want to use your credit card right now. Review Nicole’s checklist!
Could be used for anything to be honest, because sometimes we just want something because we want it, not even because we are being pressurised by Sam the spam oil merchant (I just liked the sound of that!).
The seminar that was both good and really really bad for us happened in 2008. It was free and four days. RED FLAG. We sat in a darkened room with music and lights and lots of people telling us a little bit about a lot, just enough to get us hooked and excited and buzzing.
On the fourth day they bought out their psychology guru. He said. You have been given all the tools. If you fail it’s your fault and you’ll never succeed (or words to that effect) after he had practised a goodly dose of NLP on everyone. That sent everyone scurrying to the back of the room with their credit cards.
I have never forgotten (or forgiven). Even though it opened my eyes to the power of the internet, it also opened my eyes to sheer naked greed and we will do whatever it takes to make squillions. I believe the use of NLP is now under examination, but it should be banned in that kind of setting. It’s criminal.
We should keep on exposing anyone who is selling purely to make themselves, ‘here I am standing in front of Disneyland’ rich.
Cutting through the crap one blog post at a time…bravo Nicole!
I think so many entrepreneurs could benefit from reading this; knowing that an opportunity isn’t always (or in fact, hardly ever) heralded by the arrival of A SALESPERSON FROM ON HIGH is really important advice.
Sure, the product or service might be a great thing right now. It might sound great. But there’s an opportunity cost of every dollar you spend; you have to work that much harder to make it back up again. You have to make sure you put in the work to make the thing happen. There are often times also loads of sources of free advice that can save you a ton of money. There are geeks (in their own fields) who will sit with you and teach you what you need to know for much less than the cost of a big-ticket “guru” product.
Real opportunities create leverage. And leverage requires… WORK. Anyone who’s selling you on the teeth of the offer (the high-pressure sales tactics) rather than the meat (the value, the effort invested, the return and process) is not doing you any favors.
Great advice, Nicole!