You’ve heard this before “There are no expenses in business, only investments”. But what does it really mean? And how can you put it into practice?
When you think about expenses in your business, what comes to mind? Rent, wages, taxes, utilities, insurance, subscriptions, marketing costs? It’s common to view these as necessary evils, the unavoidable costs of running a business.
But what if you shifted your perspective? What if you saw every dollar spent, every hour put in, and every ounce of effort exerted not as an expense, but as an investment?
The Investment Mindset
The key to this mindset shift is understanding that all expenditures should yield a positive return that is greater than the investment. Whether that return is immediate or long-term, tangible or intangible, in business, there must be a positive return. By reframing “costs” as investments, you can start to evaluate them based on their actual and potential contributions to the growth and stability of your business.
Here’s how this perspective applies across different areas of your business:
Marketing and Sales: Investing in Growth
Marketing and sales are the lifeblood of business growth. But first let’s define the difference between each.
The purpose of “Marketing” is to generate leads, people who have the problem you solve and who are interested in the solution you provide. I like to think of “Marketing” as “marketing activities”, the things get done, to generate leads.
The purpose of “Sales” is to convert those leads from people who have the problem you solve and who are interested in the solution you provide into paying customers.
Delineating the differences between these two processes allows you to better determine the specific investments and required returns to make it make sense.
Every dollar you spend here should bring in more interested people (leads) and convert them into customers and ultimately, drive revenue.
More paying customers means you’re helping more people and generating more revenue as a result.
Example: A medical practice investing in an online marketing campaign, such as Google Ads might attract more patients seeking specialized services. The cost of these ads is an investment that directly contributes to increased patient appointments and practice revenue. It is the owner’s responsibility to make sure they are clear on their numerical targets for leads and new customers with a customer acquisition cost that makes sense and preserves the profit margin.
Customer Experience: Investing in Loyalty
Customer experience is a critical area where attention, effort, and relatively small investments can yield high returns. Happy customers are more likely to return and refer others, word of mouth. Focusing your time and efforts to invest in over delivering on the promises made during the marketing and sales processes is key happy customers and feeds back into word of mouth marketing.
Example: A physical therapy clinic that invests in auditing their current customer experience and facing the truths about their current patient experience, from the perspective of their patients, will identify areas to fix and others to dial up and make even better. Actively listening to patients, repeating their goals, and reflecting their progress along the way, can result in higher patient satisfaction, increased loyalty, and more referrals, driving near-term and long-term growth.
Staff Training: Investing in Capability
Clinical staff are constantly working on obtaining new clinical skills and refining those they have. Professional staff are constantly working on obtaining new professional skills and leveling up those they already have. But this is often like continuing to focus on the strongest muscles in the kinetic chain. Focusing on improving the weaker links can often turn into bigger improvements and results. “Soft skills” like communicating to understand, listening, teaching, and making sure patients and customers are taken care of can further uplevel your customer experience.
And don’t forget your supporting team members. Most customers’ first and last contacts with your company are with supporting team members. A friendly voice answering the phone, or a knowledgeable and empathetic person being able to explain a bill can make a huge difference in how your business is perceived by your customers.
Beyond the return for your customer, investing in training and development for your team not only boosts their skills but also enhances their engagement, feelings of accomplishment, and productivity. Well-trained team members are more effective, provide better customer service, and contribute to a positive workplace culture.
Example: A dental practice that invests in continuing education and training for its staff, including communication, the latest dental techniques, and patient care methods, will see improvements in service quality and patient satisfaction. One that invests in the first point of contact and the non-clinical staff will see happier patients. The investments in training can lead to better patient outcomes, higher retention rates, stronger word of mouth, and ultimately, more revenue.
Security and Compliance: Investing in Peace of Mind
Security and compliance measures, such as insurance, HR, bookkeeping, and cybersecurity (your EMR, banking security, etc.), often feel like burdensome expenses and efforts. However, these are critical investments in the longevity and stability of your business. Consider them as investments in peace of mind and risk management. When you spend on insurance, you’re investing in protection against unforeseen events that could otherwise cripple your business. Compliance costs, though often annoying, are investments in staying operational and avoiding legal pitfalls.
Examples: A physical therapy practice investing in an outsourced HR professional can create greater clarity for team members, and protect against future claims against the employer. This investment safeguards the practice’s financial stability and reputation, allowing it to continue serving patients effectively.
Time, Effort, and Emotional Energy: Investing Beyond Money
It’s not just money that counts as an investment. As mentioned before, your time, effort, and emotional energy are valuable and finite. Consider these as investments you are making to give a specific, positive return.
Example: A business owner who invests time in strategic planning and setting goals for the next quarter and year, rather than getting bogged down in daily operational tasks, can steer their business toward long-term success. This investment of time in high-level thinking and planning can result in more substantial business growth and sustainability.
Evaluating Your Investments
Prioritize tasks that have the potential to yield the highest return from your investments. And track your results to be able to double down on those giving you the best returns while culling those that don’t. Avoiding spending your time, effort, and emotional energy on low-impact activities to focus on what drives your business forward will yield more of the results you desire.
Set clear targets and goals for what are acceptable returns on your investments. Track metrics and analyze outcomes. Assess which investments are giving you the most return for the input. And be prepared to change where and how you are investing your time, effort, and emotional energy. If an investment isn’t delivering as expected, change your approach or stop spending there. This approach ensures that you’re continuously optimizing your resources for the best possible outcomes.
Conclusion
Adopting an investment mindset can transform how you view and manage your business expenditures. By seeing every dollar, hour, and effort as an investment, you become more strategic in your decision-making, leading to greater growth and stability for your business. Remember, there are no expenses in business, only investments that yield a return.
Following the principle that doing >>> knowing, here are a couple things you can do right now.
1. Message me to get your free copy of The Winner’s Playbook, a reflection and planning tool for the coming year.
2. Share this post with a fellow business owner who needs it.
Let’s spread the word on how a simple shift in perspective can help transform business expenses into strategic investments for growth and success.
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