I’m pretty sure every small business owner or entrepreneur who has ever had to prepare a business plan – or even a grant application – is familiar with three very important letters. No, not VIP, although, sure, you can argue that I suppose. But I’m talking about R. O. I.
Return on Investment.
And if you’re more of a creative type like I am, you may have grumbled a time or two (or sixteen) about the difficulty of quantifying the ROI on an artistic venture. My go-to for those arguments is a quote by author Kurt Vonnegut:
“The arts… are a very human way of making life more bearable. Practicing an art, no matter how well or badly, is a way to make your soul grow, for heaven’s sake. Sing in the shower. Dance to the radio. Tell stories. Write a poem to a friend, even a lousy poem. Do it as well as you possible can. You will get an enormous reward.”
Unfortunately the people holding the purse strings usually want a more monetary return on their investment. So these days I point them to the ubiquitousness of Netflix, Disney+, Amazon Prime, etc. – the services that got us through the pandemic shutdown without losing our sanity or murdering someone – all filled with creative endeavors. Pieces of art that the platforms have (and continue to) pay a pretty penny for.
But that’s not what we’re looking at today. While we’ve all considered ROI, for the money lenders and our retirement accounts, I’m betting most small business owners haven’t considered the corollary: the Cost of Inaction.
What Are You Waiting For?
I can tell you, from my time educating people about retirement options, that bankers and investment specialists also focus on the flipside of ROI – COI. The most poignant example is the one where you take a look at how compound interest works. A dollar properly invested at age 20, even if it’s never touched again, after 10 years is worth nearly 100 times what investing $10 is at age 30. Even during the recent recession.
Stock Brokers and Mutual Fund salesmen are fond of pointing out that when the stock market crashed in 1929, the people who survived and thrived in the Great Depression were those who didn’t panic. While the average consumer was pulling their money out of investments and savings and loans, the Rockefellers and Carnegies “let it ride.”
Opportunity Cost is defined as “the cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.”
Opportunity cost can be positive or negative. Cost of Inaction is the negative side. In Tim Ferris’ “Fear Setting” exercise, he calls the Cost of Inaction possibly the most important consideration you can take. For him, understanding the emotional, physical and financial costs for you and the people in your life is what truly drives us to take the uncomfortable action that moves us out of the status quo.
Put simply, every choice is in fact two choices. Every time you say yes to one thing, you are saying no to something else. And every no is really the choice to prioritize another yes.
Investing Your Time
In many ways, building credibility and visibility online is like investing for retirement. We don’t have an exact formula with marketing like they use in calculating compound interest, but it’s a similar mindset. The more you do now, the more your results will build on each other. The longer you wait, the smaller your potential returns could be.
Brokers will also tell you, the more consistent you are at putting away a few dollars every week, the more your investment will increase, not just compounding, but growing exponentially.
And just like investing for the future, consistently producing valuable, actionable content blog posts will exponentially grow your search engine visibility – regardless of how often Google changes their algorithm. Consistently providing extra worth to customers and searchers boosts organic search traffic. Adding value will always yield a profitable return.
Trust Doesn’t Rust
I’ve written extensively on the fact that 99% of the time, you won’t make a sale from a first visit to your website. In nine out of ten cases, searchers will never return to your site after the initial visit. I wrote those articles a few years ago, and I think if someone studied it, those numbers may have adjusted slightly since the pandemic began, but for the point I’m making they’re still valid.
You exchange valuable information like Lead Magnets for the potential customer’s contact information. That way you can keep in contact with them on a regular basis and when they’re ready to make a decision, hopefully you’re top of mind.
Online, there are seldom opportunities to do the old Tom Hopkins sales presentation to build company credibility. Even if you tried, people don’t have the patience for it, and often distrust the presenter, even if they appear interested. But every time someone visits your site and finds the answers they’re looking for, it adds to your trustworthiness in their minds.
The more often, and more consistently you provide value to the people who find you on search engines, the more you build credibility. And it’s an even stronger, more emotional connection, because they’re making the decision to trust you – not just taking your word for it. And as ol’ Tom has often told us, emotions make sales.
Investing in Emotional Impact
Psychologists tell us that as human beings we are more emotionally affected by losing something than by gaining something. We like to win, but we hate losing even more. To the point that if we worry that upsetting the status quo will cost us, we’ll sometimes ignore the fact that it can also greatly benefit us. Even with a track record of knowing change has been beneficial, we can still be stymied by the fear of loss.
The doctors call this “Escalation of Commitment.” But you might know it better by the economic take on it – the sunk-cost fallacy. Fear of losing, especially after we’ve invested so much time, money, resources, causes us to justify throwing good money after bad. To remix a couple of metaphors.
But as small business owners, we must resist this urge. Or better yet, counter it with emotional regulation. Emotional regulation strategies employ cognitive skills to redefine the meaning of a stimulus or situation. For example, both therapists and Weight Watchers employ and teach a technique called “reframing.”
In therapy, the counselor helps you see things from a different perspective, presumably allowing you to put yourself in another’s shoes and see the behaviors you experienced as negative in a positive light. Weight Watchers, its own form of therapy, you look at why you overeat. In many people’s cases, the root cause is stress. So the program teaches you to look for alternative ways to relieve stress and try one of them.
The end result is the same – changed behavior due to a redefined emotional state.
Sacrifices Must Be Made
I know I got a bit technical with the last section, so let me bring it back around. Our topic last week was delegation and outsourcing.
There are only so many hours in the day. Even if you try to drive yourself 24/7, you’ll discover, as I did in college, that after about 72 hours of being awake, your brain starts sleeping for you, whether you want it or not. The phenomenon of microsleeps (mentally sleeping while awake) can occur in some subjects after just 48 hours without sleep. And after you pass 96 hours – awake for four days straight – your perception of reality is severely distorted.
Not the best situation for running a business.
Even if you’re the type of person who only needs four to five hours of sleep per night, you’ve still only got 19-20 hours to work and live life. Something sometime has to give. No one, no matter how talented, can do it all, not all the time.
One of the things we encourage our clients to do is to focus their attention and efforts on the things they do well. The places they succeed and get energized and do better than anyone else. It just doesn’t make sense to sacrifice your best time and effort – in areas where you are mediocre at best. I’m not saying that to be insulting, just asking you to face facts.
Spending time on one thing means less time for other things. Trying to do everything is not only untenable, it’s costing you the success your business could have. You’re wasting resources to save a few bucks – when it’s really costing you much more in the long run.
I can’t tell you how to run your business, but I can tell when you’re stretched too thin.
Faith Without Works is Dead
About halfway through this article, I repeated a phrase I’ve used often in the past five years of writing this weekly blog. You need to be “consistently producing valuable, actionable content blog posts.”
I work very hard to research and write interesting, valuable content that will help your business succeed, even if you never once consider hiring Grow the Dream in any capacity. I do it for a variety of reasons. The most important being that I believe we should operate our business the way we recommend others operate theirs. So giving added value to every article is important to me.
But I would be remiss if I didn’t offer a call to action. In most instances, I try to be somewhat subtle. I encourage you to reach out, if you need help or want to learn more. I remind you that we built our business helping small businesses and entrepreneurs scale up their businesses.
But today, I want to, at the risk of coming off as “salesy,” be very direct. You could read every word we’ve written in these blog posts, going back nearly 20 years. You could memorize them. Tell them to others. But unless you take action – it’s all pointless. You get nothing out of it.
So I’m going to tell you very bluntly. We can help. Grow the Dream has taught and executed small business marketing strategies for more than 20 years. We get results. Our work is successful and we are very talented at what we do.
On June 5, 2021, we are hosting a LIVE, face-to-face Strategic Marketing Workshop.
This workshop will provide you with the tools you need to succeed in the digital marketplace – and how to manage your time and reduce your stress. It’s an amazing morning, breakfast and coffee provided, worth at least five or six times the amount we are asking from each business owner.
And we only have 30 slots.
We have to limit attendance due to COVID Safety Parameters, but also because we want to give you very detailed, hands-on attention. You’ll walk away with the top strategies and most up to date information. No question will be left unasked – and you’ll know exactly what steps to take next.
This is a program you cannot afford to miss.
This is your opportunity. Don’t miss out. It’s time to take action.