We often mention talk about spending money to grow your business on this site. I feel like it would be irresponsible not to include this post. There are 2 things you must keep in mind when you start investing money in your business:
- Do not spend money you can’t afford to spend! It will probably be a while before you see a return on that investment and I have seen many lead generators spend themselves right out of business. Try not to spend money until you are making money!
- Use “Red-Light Green Light” spending tactics.
I know this is basic but there is a lot to consider before, during and after a spend.
When Should I Start Spending?
This is the big question. Like I said earlier, you shouldn’t be spending any more than the very basic spends on lead generation (CRM, small direct mail campaign, etc) until you are making some money. You also should’t be spending on it until you have implemented a systematic and consistent prospecting plan. (Click here to learn much much much more about systematic and consistent prospecting plans)
One thing I hate to see is when a lead generator spends money without strategizing and researching first. You get the idea… You go into a class or take a webinar and hear about all of these “cool” products that are going to make you rich! For example, the website that is so effective that everyone who uses it is going to love it so much they immediately register and make it their go-to tool for home searching, and because it’s so good, they are obviously going to call you to represent them when it’s time to buy their home! You leave the webinar so psyched up and impressed with all the bells and whistles they just showed you that you must have it. You spend hundreds of dollars a month and then spend hours and hours setting it up and get ready to make the money…. But the money doesn’t come and now you’re in debt, possibly signed into a long term contract AND the amount of time and money you are spending on it is having negative affect on your systematic lead generation and prospecting.
Don’t get caught up in the bells and whistles of the latest and greatest prospecting tools. Wait until your prospecting and systematic lead generation plans are humming along and you can deliver it without any real thought or effort. Once you are doing that, you should see your business ticking up and money should be coming in. This is a good time to consider your first spend.
What Should I Spend On? (Green Light)
That depends on your plan. I really can’t answer that question for you. Keep reading for some pointers though.
I love getting farming up and running as soon as possible, so you may want to read up on the basics of farming. It’s a great way to leverage your marketing dollars and save lots of time while still building your business. (Click here for more on farming)
You may want to dabble in internet lead generation It is rewarding but expensive and very risky! (Click here for more on whether internet lead generation is right for you) Or you may want to buy a fancy lead capture website? How about hiring someone to help with your social media presence?
Well, the answer is 100% up to you, but you need to do it wisely. Here are a few things to consider:
- Make sure it’s something that doesn’t cost more than you can afford to spend.
- Do NOT assume the cost isn’t too high because “it’s going to pay for itself anyway”
- Make sure it’s something that allows you to measure the ROI (return on investment)
- You need to know how much you spent
- You need to know how many leads it generated
- You need to know how many of those leads became appointments, contracts and closings.
- Set clear goals regarding how much of a return you want to see and how long until you see the return.
- Make sure it’s something that leans into your strengths and away from your weaknesses. For example, if you are bad with lead conversion you should definitely stay away from internet leads until you build up the skill and develop a strategic system to convert leads.
- Is this product expandable? If it works out and you want to increase your investment, you need to make sure you have the ability to expand the spend.
Stop Spending!
This is an important next step. After you determine the time is right to leverage your business and have done all of your research and set your goals, make your spend. Once you’ve done that, stop spending. Watch how it develops and make sure it turns into a positive investment for you.
If you are anxious to do more, dive into the training and make sure you’re spending the appropriate amount of time to use and perfect your new lead generation tool.
Don’t give up on it too early and don’t give it much extra time (if any). If it’s not working, ask yourself a couple of questions…
- Is this a product that has worked for others?
- If it is, did you do everything you were supposed to do to make it work? I see plenty of people who think spending money is like a magic trick…. Spend the money and then magically it is going to do all of the work for you. I had an agent who once bought the most expensive websites I have ever seen. I’m serious, we are talking 5 digits here! He was assured he would make that back within 6 months and since he focused on luxury housing (and because he was convinced that having a non-templated website would be sooooo good for SEO that there was no chance he could fail) he purchased the site. He assumed with that much money and such a beautiful site, he just had to sit back and watch the magic happen. He saw the magic, it was called “Watch me take your $12,000” Tada!
- Did you go into it with the right mindset? Remember, whenever you are doing any form of lead generation, you need the proper mindset. You can’t capture leads with a mindset of “Why am I doing this anyway? These leads suck!”
- Did you do all of the training and research required?
- Did you talk to someone else who may have been successful with this product to get their advice on what may have gone wrong?
Finally, if it is not working, get rid of it… You can save the money and try something else.
What Do I Do When It Work?
Suppose you see a positive return on the investment and are happy with the product. Should you expand your investment in what is working or should you expand out and find another tool?
Whichever way you go, be sure to follow the red light/green light system again and stop spending until you can assure yourself it’s giving you a positive return AND it isn’t hurting your systematic lead generation.
Please remember that regardless of what you chose and how you expand after success, it can never get in the way of our systematic and consistent lead generation program. That is and always should be your top priority. There are no products out there able to outperform working your sphere of influence and getting top of mind, so don’t fool yourself into believing you’re “Too busy to do that basic stuff”. (click here for more on time management and prioritizing)
