When it comes to business, we know it’s all about the numbers. But most people would rather do anything but look at the numbers. And in some cases, that can be a real problem.
On any given week, someone is trying to convince me why she should be spending money to promote her business in a new way, especially given that so many in person marketing options have disappeared. Perhaps she wants to spend money to launch a digital campaign, hiring someone new, or expand into a new partnership.
The conversation almost always starts with the emotional reasons why this would be a good idea: “It’ll be a great marketing project that I can re-use across a few different mediums;” or “Hiring this sort of resource would really help us do more work for our clients;” or “Can you imagine the exposure we could get if we collaborated with that brand?”
WE COULD SPEND OUR ENTIRE TIME DAYDREAMING ABOUT HOW GREAT SPENDING THIS MONEY COULD BE.
But that would be a dumb use of our time.
The one and only place to start when deciding to invest in your business is with math.
It’s not the only reason to do something, but you owe it to yourself and to your business to know the math and to do the math.
And by math, I’m not talking about building a valuation model, I am talking about answering one very simple question:
What would it take to make this investment worth it?
How much would you have to sell to see a return on the investment? Or if it’s a new hire, how many hours would they have to work to pay for their salary, and do you have that work lined up yet?
If you can’t figure out whether it’s worth spending the money, it’s probably not worth spending the money.