The term "expenses" is something small business hear a lot. We are continually trying to reduce our expenses and raise profits. The problem with this is that some expenses, actually end up making us money in the long run.
Instead of looking at these areas as expenses, I want you to start focusing on it being an investment. Hopefully, by the end of this article, you'll understand that sometimes the saying;
you gotta spend money
to make money
holds a lot of truth
My brother is one of those guys who's fascinated by numbers, especially the ones in the stock market. We chatted for a few minutes, and I told him that I wish I could wrap my head around investing, and the stock market.
He asked me a straightforward question, and it completely opened up a new way I look at my business;
How much are you currently getting as a return from investing in your business?
I stopped for a second and thought about that. I usually get about a $3+ return on my investments. I know this because I invest in my business daily and measure my return on it.
Sidenote: If you don't know how to invest or how to measure your return I'll explain that below!
He stopped me right then and there and told me I was silly if I bothered with the stock market and that with my type of return, I should simply continue investing in my own business.
After we had that talk, I realized that although it's not the stock market, it's my business, which is a million times better than any stock, I can put my money in.
This little piece of advice has stuck with me, and I hope that for those who are reading this, you too can see that investing in your own business is the best way to go.
Now that we talked about that, some of you might be wondering, how the heck is a small business supposed to invest in itself?
Here are some examples for you:
PURCHASING A NEW LENS
I love giving this example because lenses are pricey, and all too often photographers wait a long time to get their dream lens. I waited years to purchase a good macro lens for my newborn sessions. There was something special missing from my newborn galleries, those tiny little details I wanted to document for parents. I couldn't do that with the 50mm I had. I eventually purchased that lens, and it has allowed me to create more beautiful galleries for my clients. Those detail shots are something every parent adores, and it has landed me more bookings than any other lens I have.
Same goes for my fisheye. Having a fisheye to use at the beach is something I love, and it has landed me so many new clients who want those extra wide shots with the dreamy sunset. It has made it possible for me to create different types of portraits in my client's gallery, and they love it.
Yes, a new lens is expensive, but look at it as an investment. You getting that lens might mean you'll be able to book more sessions!
It's no secret that I love using FB ads to market my businesses. I have used it for my sessions, my workshops, my products, literally everything you could think of. I can put money into advertising and then track my return from it over time. There are hundreds of different ways you can advertise your business services and products.
Yes, putting money on advertising can get costly, but what if you managed to get a $3 return for every dollar you spent? You could be making thousands a month with the right advertising!
SIGNING UP FOR MY PHOTOGRAPHY BUSINESS SUCCESS CLASS
I'm going to throw this example in for fun, no pressure to actually sign up unless you really want to. You can take the plunge and sign up for my class for $37 a month. By taking my class you'll learn how to price yourself accordingly, how to attract the right clients, you'll have me as your personal business coach guiding you along the way to make sure that you build a vision for your business and a plan to get there. I'll go as far as guaranteeing that by following my business strategies, you'll make your money back over and over again. By booking one single session, it will pay for the class. Think about it. What do you have to lose? What if you took this class and were able to build a successful business that was booking clients within a few months of putting in the hard work? What if this class showed you how to build a six-figure business? That $37 investment on day one, would have been the best decision you made for your business.
Investing in education can be expensive, but what if you learned valuable information in this class and in the end had a solid plan on reaching your personal goals?
Now many people get confused about how to calculate their ROI; it can be confusing, especially with a service. If you're a photographer, I recommend advertising a specific type of session and tracking how many of those sessions you end up booking per month. If you are selling a product, then it's a little easier, all you have to do is promote a specific type of product, and then track how many items you sold.
HOW TO CALCULATE YOUR ROI
ROI = Return On Investment
Super easy. Figure out how much you are spending, and then calculate how much you made, or sold from a particular type of session or product that you were promoting. Decide what you made by what you spend. If you are selling a product
To give you an example let's pretend you put $500 into marketing your newborn sessions (this would include whatever advertising you choose to do + expenses that it cost you to set everything up)
You had five people book newborn sessions with you at $500 per session.
You Invested $500 and made $2500.
ROI = $5 for every $1 you spend.
Let's think big here and pretend like this will be your return on ALL advertising you spend money on. Look at the numbers below to see the unlimited possibilities!
If you spend $500, you'll make $2500
If you spend $1000, you'll make $5000
If you spend $5000, you'll make $25,000
And so on...
You can see how investing in your own business is the best decision for you in the long run because it will end up making you more money as long as you invest it wisely!