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The $100 MBA Show
MBA2298 How to Know What to Spend More On + Free Ride Friday
00:11:32
You’re in profit. Congrats! To keep it that way, you have to reinvest. But where? How much? Where you put your money will determine if your business grows or stagnates.
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Omar Zenhom
Foreign. Hey oh. Welcome to the $100 RBA Show. The place to be to build a business you want every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014. And in today's episode, it's Free Ride Friday. On Free Ride Friday, we give away a lifetime membership to one of our programs. We're giving away the hundred dollar MBA, our full six part course on how to become a better entrepreneur, 100% guaranteed. If you want to win a free ride, just leave us an Apple podcast rating and review and you enter our weekly random draw. Listen in on Friday, just like today, to see who won. We announced this week's winner a little bit later in the episode. In today's episode, you will learn how to know what to spend more on. One of the most critical but difficult decisions you're going to need to make in your is knowing how to allocate your funds. You're going to start making money, you're going to start having customers, you're going to start making revenue. How do you actually reinvest in your business in the right things? Do you spend it on a new employee? Do you spend it on marketing? Do you spend it on infrastructure or tools? Do you give it to yourself as a dividend? But more importantly, what do you spend more money on? Where should you reinvest in your business to get maximum results? Money is an amplifier. It's an accelerator to success. But it all depends on where you allocate it. So let's get into it. Let's get down to business. One of the hardest lessons I've learned in my over 20 years of building businesses is that you have to. You have to, you have to, you have to track what you do. You have to track your efforts and the results of your efforts. Without that data, you're really just guessing. If you don't know how well the activities you're doing in your business is helping you, is it paying off? Is it worth your time and money and energy? If you don't know the answer to that, if you don't have the data to compare activities, then you're really just going on hunches and that's not the way to do it. So you might be asking Omer, what am I supposed to track? How am I supposed to do this? Well, the first thing you always need to track is your income. Your revenue, how much money you're making every month, every day, every week, whatever it might be. If you run a business with reoccurring income, I highly recommend you check out ProfitWell, which recently got bought by Paddle, but their service is still free. You can sign up to their service where they allow you to track your business metrics. You easily just integrate with your payment processor like Stripe or Braintree or whatever it might be. And what this does is that it gives you a clear dashboard of how much money you're making every month, how many customers you have, how many people have left you, or churned as a customer. It gives you the basic business metrics you need to know to see how things are going. Now, the reason why this is important is that it acts like an ekg, acts like a graph to know the status, the health of your business. And when you do something, you can look at the graph and say, hey, did this create a blip in the graph? Did it allow me to make more sales, to make more revenue, to hold onto customers and not have them cancel? Or did that action do nothing? Okay, I'll give you a very simple example. Let's say, for example, I'm trying to get more trials to my software, webinar Ninja, and I'm trying all different kinds of marketing activities. Social media activity, paid ads, partner campaigns, all kinds of stuff. One of the most basic and easy way to track if these efforts are working is just to look what happens after you take that action. I know this is not sophisticated tracking or any kind of like UTM link or any kind of like that. We're not looking into the really nitty gritty way of doing this. Let's just be really basic about it. You run a webinar, you run an offer for that webinar and you get 10 customers after that webinar. You know that when you run this kind of webinar with X amount of attendees, you get 10 customers, or in my case, 10 trials. This is why having the data or having a graph or having some sort of metric tool is important, so that you can know what the ramifications of your actions are. What are the effects of these actions? Now, obviously you can get a little bit more detailed, have tracking links, utm, like I mentioned, tag customers in your CRM in different ways, all kinds of stuff. Okay, but the, the basics to get started is you have to have some baseline metrics that you can track to know the health of your business. Now you might be asking Hilmer, what if I'm running different Kinds of campaigns at the same time, how do I know? Is this helping my business because of this campaign? How do I know if this campaign is making my business grow or another campaign? Well, this is when the tracking comes into play. And the easiest way to do this is to use a tagging system in your email marketing system or CRM. For example, let's say I run a Facebook ad that leads into maybe some sort of free guide or free course. I tag them in a certain way that identifies. It came from the paid ad, the Facebook ad. For example, I now know this customer. The way they entered my funnel, the way they entered my email address or my audience is through the ad. Later on, I can then look at the sales that come in, look at all the emails that are attached to those sales and see, hey, do they have any tags, right? Did they come from the Facebook ads? I can then attribute or give attribution to the Facebook ad based on that. Now, attribution is murky waters, right? Some people allocate attribution to a sale because of the last point of contact. Some people say first point of contact. I personally say first point of contact. If I got the lead from somewhere and then that lead ends up buying, I'm going to attribute that sale to that action. Now, once I know this, now that I have some metrics, I have some sort of tracking, I have some sort of way to know when I do this, this happens when I make sales. The sales are attributed to these actions or this particular action or this effort, this campaign. This gives me a clear cut answer to the question, where do I double down? Where do I reinvest in? And my advice is to continue to reinvest until it doesn't give you a return. Too many entrepreneurs see something that works and they continue to do it for a little bit and then they get distracted with some other strategy or some other way to make money and they put their foot off the gas. This is horrible, okay? This is horrible for your business. If something works, it's a gift. Utilize that gift, continue to do it, continue to use it as long as it's giving you a healthy return on investment. For example, if I'm running ads and it costs me $100 to acquire a customer and the value of a customer is $600, this is a no brainer. I'm going to do this over and over again, even if my efforts don't result in the same roi. Let's say, for example, the cost of acquiring a customer moves up to 150 or 200 or even 300, it's still worth it. Because I'm earning a $600 customer, I'm doubling my money. Now, once you have some metrics to know when you make a sale, how much money that sales worth, with something like ProfitWell and you have some system attribution, whether you're using or UTM links or system to just attribute the sale to something, this makes it easy for you to say, okay, this action is allowing me to get more revenue and more sales, not the same thing. By the way, you can make five sales and make less revenue than two sales because of how much revenue making each sale, right? So sometimes you get higher quality customers and make more revenue with one channel versus another. So the TLDR is really you need to track. You need data so that you can know what to double down on, what to spend your money on and reinvest into your business. Now what if you want to reinvest in multiple things, not just one thing? Well, this is where you can really start to scale and see your efforts really blow up. This is going to require you to start outsourcing some of these activities to somebody. And this may not be expensive. You can just outsource this to an executive assistant, a marketing assistant, somebody that's going to cost you, you know, five, six, seven, $800 a month. If you hire overseas or somewhere like the Philippines, which has really strong talent, you can allocate each strategy to somebody on your team and have them focus on running that play over and over. If ads are working for you, train them on what you do, show them how to do this whole funnel and run that play over and over until it's not working for you anymore. If content marketing is doing that for you, go ahead. If TikTok is doing that for you, go ahead. And you may not need to hire multiple people or have one person for each task. You can might have one person do it all, depending on how time consuming each task is. The point here is that if you can get yourself out of the equation and get other people to do the work, the possibilities are endless. You can continue to scale your business using multiple levers and multiple ways to reinvest and respend on your business. When you have a surefire way to bring in customers, when you have ways to make sales and make revenue, a system that you can repeat, this not only gives you a superpower and allows you to grow on demand. This gives your business incredible value because you have a way to bring in customers whenever you want. It's like having an atm. If somebody were going to buy your business and they knew that you had a way to bring in customers at will, this is a no brainer for them because they could just buy your business right now, hand over the system and hey, they can just repeat it. And the best businesses out there have these systems in place. All the big brands and all the big companies you know and love have a customer acquisition system and they have multiple channels of customer acquisition. They have their business taken care of because they know how to bring in new customers at will. Thanks so much for listening to the Hundred Dollar MBA show, but today's episode's not over. It's Free Ride Friday. Let's see who won this week's Free Ride and the winner is Dorothy Hala. That is the Handle on Apple Podcast. Dorothy says Great show. For time tested actionable business advice, the $100 MBA show is one of the best podcasts out there. For actual business advice to advance your career, 10 out of 10 recommend. Well Dorothy, thank you so much for leaving an amazing review. Your mission is to email me over at omar@100mba.net so we can hook you up with the lifetime membership to the Hundred Dollar mba, our six part course on how to become a better entrepreneur. If you're listening and you want to win a free ride to the $100 MBA, just leave us an Apple Podcast rating and review and you enter our weekly random draw. Listen in on Friday to see if you want. It's that easy. Thank you so much for listening to the Hundred Dollars NBA Show. If you love what you hear, hit subscribe, hit follow on your favorite podcast app right now. Whether it's sp, Apple Podcasts, Stitcher Radio, Himalaya, we're on every platform. Before I go, I want to leave you with this. There is nothing like the feeling of knowing what makes your business grow. Once you figure this out and you've measured everything and you are tracking what's working, what's not, and you double down on what works and it works and you start bringing in customers and revenue and you see the numbers going the right way. It's exciting. It's like, wow, sky's the limit. Let's keep it going and ride that wave. Keep doing it until it stops working and then you can move on to something else. The second thing on your list that brings in customers. Thanks so much for listening to the $100 NBA show. I'll check you in Monday's episode. I'll see you then. Take care.