Investing for Business Growth - What Your Accountant (Probably) Can’t Tell You
If you want to grow your business, you have to be prepared to invest in its growth.
It’s just a fact. No matter how many ‘gurus’ out there will try to tell you that you can bootstrap your way to 6 figures, you can’t escape that.
So in this article, I’m going to lay out what that really looks like in your branding agency, and how to make smart choices when you invest in your business.
Disclaimer: This article is purely educational and doesn’t constitute financial advice. Always seek guidance from a professional financial advisor or accountant when making investment decisions.
Your Money Mindset - the cornerstone of your business growth
So here’s what your accountant (or other finance professional) probably can’t tell you. Your financial success in your business is purely dependent on your money mindset.
It doesn’t matter if you’ve got six figures in the bank, or just six dollars. There’s a few things you’ll need to try on if you’re not where you want to be in your business.
But hang on. Aren’t we supposed to be talking about investing?
Yes!
But before you invest any money, you’re going to have to invest time and effort in looking at what might be getting in the way of your financial success.
After that, any actual investment decisions you make will be gravy.
There’s 2 things I want you to focus on when it comes to your money mindset:
1 - Overcoming Limiting Beliefs About Pricing
You might be thinking: "But I can't charge more for my services because...reasons." Well, guess what? Those reasons are probably just limiting beliefs holding you back from success. It's time to overcome those pesky thoughts, so you can start making bank like a true boss.
Easier said than done? OK, here’s where to start.
First, take a piece of paper, or a device you can type on, and write out all the limiting beliefs you have about money.
ALL OF THEM.
You know, when you say to yourself “I wish I could afford to hire a FB Ad Agency…” or “I don’t think I’ll ever make enough to build up my savings…”
Nothing is off the table. The goal here is to get it all out, and then you can see what you’re dealing with.
Next, go back over each limiting belief, and ask yourself “Is this true?” The act of challenging these beliefs will start to shift things in your brain - you’ll notice that you begin to think, and subsequently act, differently.
You’ll find that even if some of these things are true right now, NONE of them are universal truths.
Gravity IS a universal truth. No matter how you feel, what you think, or how much you negotiate, if you throw a ball up in the air, it will ALWAYS come down. (And no, don’t even start talking about what happens in space 🤪. I’m talking about regular life here. K?)
Never making enough to build up your savings is NOT a universal truth. Even if you’re not generating as much money in your business as you want right now, it is totally possible to start small and just save $1 a month.
When you get done with questioning all these beliefs, then create new ones. Ones that empower you, inspire you and actually get you excited about the financial state of your business.
You can call these affirmations, positive mindset, whatever. The key thing is, write out your favorite ones, as if they’ve already happened.
Here’s a couple of examples:
“I see an abundance of opportunities to grow my business every day.”
“I’ve set up a consistent revenue stream that fills up my savings daily.”
There’s scientific evidence to back up that when we say these kinds of statements, or have them visible to us frequently, our brain patterns shift so that we act in a way that has them happen. So in case you were wondering, it’s not ‘woo-woo’!
2 - Realize the Worth of Your Offerings
If scope creep is the no. 1 problem branding agency owners face, undercharging is a close second.
If you've been undercharging for years, it's high time to realize the value of what you offer clients. Newsflash: Your work is amazing and deserves to be compensated accordingly.
It’s easy for me to say ‘Go ahead, raise your prices!’ if you haven’t done any of the work to look at your money mindset. All that will happen is that, at the first sign of a prospect backing out of a sale, you’ll go right back to believing your limiting beliefs.
So how do we keep you out of that mud and in the clear headspace where you not only get how badass you are, but also have the confidence to communicate that to prospects through your higher prices?
Here’s a few things you can test till you see which one works:
JFDI (Just F***ing Do It!). Set a date and say that anyone who hires you after that date will have to pay $X for your services.
No explanation or justification needed, but if you have existing clients or prospects, and they’re some kind of email list, you can make an announcement about it, that gives them some notice and even a special offer to ‘get in before the price goes up’.
Just be sure to stick to your new prices after the date. Nothing screams ‘bullshit’ louder than going back on your word here.Go Incremental. Set a goal for how much you want to charge for your different offers, and then work backwards to how you want to gradually raise your rates till you get there.
You could say that you’re going to go up $200 with every new client, or $500 with every 3rd client. It’s really up to you.
Again, stick to what you say - people will quickly relate to you as ‘high-ticket’, and likely send you introductions and referrals that match your rates.Find new friends. There’s a saying that goes something like “Our income is the average of the 5 people we spend the most time with.”
So, if you’re hanging out with people who have a scarcity mindset, just about making enough money to get by, then it’s hard to stay in your positive, abundant mindset for very long.
Instead, hang out with people who make 6, 7, 8+ figures in their successful companies. Watch and learn from them.
Notice how they may not have the same hangups as you about generating or spending money, so try on their behaviors. Don’t be surprised if your bank balance starts going up…
Spending v. Investing - what’s the difference?
We’ve just done the heavy lifting to get your head in the game to invest for business growth.
Now, let’s look at what investing in your business is really about, and what it really isn’t.
It's like trying to decide between pizza and tacos for dinner - both are tempting, but one is definitely better for your waistline (and your branding agency).
Even if you have to ‘spend money to make money’, not all outlays are equal. Investing means you’re putting resources (aka, money) into anything that will generate long-term value.
It’s not always obvious what will bring you that value - that’s why investing in anything is ALWAYS a risk, and if you’re getting serious about dropping a large chunk of change in your business, it’s always wise to get professional advice first.
That said, there’s some indicators that will help you figure out what is an investment, and what’s just spending:
Training and knowledge - masterminds, online courses etc. If you can stay out of the ‘shiny object syndrome’ and be clear about what training/mentoring you need, joining a training program can generate multiple ROI over many years. You get to upskill yourself which means you get better at what you do, so you can charge more. The relationships you build can lead to lucrative introductions and referrals, that could keep bringing you new clients for years.
A shiny new MacBook Pro - unless your current computer is literally emitting smoke when you switch it on, this is more of a ‘vanity’ spend than an investment. It won’t make your business grow any faster, and physical assets depreciate (go down in value) over time. Look, I hear you, you DO need functioning tech to do your work. But if your focus is on building and investing for growth, then upgrading your equipment is something that can wait till you’ve built up reserves.
Paid ad campaigns - done right, these can be a great investment. If you’re not doing them yourself, then do your research and due diligence to make sure you work with an agency that has a good track record in generating qualified leads. It’s not something I recommend if you’re still in ‘ramp-up’ mode, but if you’re beyond that and serious about scaling, this can be a worthwhile use of your funds.
Expert Wisdom - How Shannon Mattern of Web Designer Academy Invests Like A CEO
One mentor I admire who has a really smart method of investing for growth is Shannon Mattern of Web Designer Academy.
It’s simple, but incredibly powerful, so I’m going to share her borrowed wisdom.
She asks herself ‘CEO Questions’. In other words, taking a step back from looking at yourself as the whole 1-2 person branding agency, and instead, picturing yourself as a CEO of a large corporation.
In that role, what would you do? What data would you look at to make those important decisions? What would be a ‘hell yeah!’ and would be a deal breaker?
Where Shannon starts is looking at her vision and objectives for her company.
So what’s yours? Where do you see your branding agency in 5-10 years’ time? What are your objectives?
Do you want to expand and bring on partners? Do you want to be able to sell the business for a significant profit so you can retire comfortably?
Get this laid out first, and if you have a business partner, make sure you’ve worked on this together, so you’re on the same page.
Then, take a look at the investment opportunities that are available to you right now. Are there any that align with your vision and objectives that you want to implement this quarter? Or are there ones that you want to park till the next quarter?
Using this method keeps Shannon’s emotions out of the way, so she only ever deals with the clear facts.
The other key benefit to this way of approaching investment decisions is that it stops fear in its tracks.
Like I said earlier, we have limiting beliefs that get in our way of success, and fear is a big one. When you have a clear structure and method for approaching your investment decisions, or any other decision in your business, it’s a ‘failsafe’ that you can count on, if your emotions and fear get the best of you!
Alternative Financing For Business Growth
OK - you’ve got your money mindset sorted, so you’re primed for growth.
You’re clear about how much your services are worth and how to communicate that.
You even think like a CEO and make all of your financial decisions against a rigorously thought out set of criteria.
But there's still a missing piece that you need.
If you’ve done the math and want to borrow funds to invest, but don’t want to go through the traditional bank loan route, there’s lots of options that have opened up that are great ways to get additional capital into your business.
These are top line suggestions - I’ll leave it to you to do more research, get professional advice, and ultimately decide what’s best for you.
Angel Investors, Venture Capitalists, Partner Financing
These are different types of individuals or companies who are actively looking to fund start-up companies or rapidly scaling ones.
Each has their own pros and cons, as well as their own terms and arrangements. The one big pro is that the financing also comes with business growth advice - angel investors and their counterparts have a lot of experience backing companies, and their advice is almost as valuable as the funds they give you.
Invoice financing, or factoring
This is a great solution to manage cash flow. You partner with an invoice financing company, who front you the money on your accounts receivable, and then once your clients settle their bills, you repay them.
It’s really handy if you are dealing with late and overdue payments from your clients - even with the best of systems, these things happen! The good news is that the invoice finance company is the one doing the chasing, not you. Just think how many hours that saves you!
Crowdfunding
You might think that this is just for viral T-shirt designs or cool new gadgets invented by those twenty-something Silicon Valley hipsters.
Wrong!
Crowdfunding can be used for anything these days, and as long as you’re clear on how much equity you’re willing give to investors, you can use these as a boost if you’re starting or scaling up, and don’t want to take on the risk of getting all your funds from just one investor.
There’s also a bunch more options that you have access to if you search for ‘alternative financing’, and if you’re serious about this, then take the time to do your research, speak to professionals, and then make your choice.
Here’s what you need to get…
Investing in growing your business can be super complex, and it’s easy to get bogged down in fear and overwhelm.
It all starts with transforming your money mindset - after that, you’ll have the headspace to be objective and assess each opportunity against clearly defined criteria that you’ve set as the CEO of your business.
And it can be really fun! The world of investment can be infinite, and as long as you do your research, take your time, and keep a clear head, it could be one of the best decisions you make to scale up fast.
P.S. I dedicate an entire module on how to get smart about finance, investments and credit in the No BS Agency Mastery Program. If you want to learn that, and all my other tools and strategies to scale up your agency - just go here to get started!