Ep50: Why Unrealistic Expectations About Building a Business Are Slowing Your Growth

In this episode, I wanted to open up a conversation about investing in building and growing a business.

After owning and running an events business, a long-established bricks-and-mortar business, and various iterations of online businesses over the years, I've noticed that many entrepreneurs, particularly in the online space, have unrealistic expectations about what it costs to build a business.

And honestly, I think that's understandable.

Online business has created an incredible opportunity. We can start businesses with relatively low overheads, free social media platforms, affordable software, and the ability to attract clients before we even have a website.

But I also think that accessibility has created a bit of a disconnect around what it actually costs to start, run, and grow a business.

In this episode, I share some personal experiences from stepping into a CEO role inside an established business, managing payroll, rent, insurance, marketing budgets and all the expenses that come with running a traditional business.

I also explore:

• Why investing in coaching, mentoring, software, ads and business infrastructure can feel uncomfortable, but how we have to shift our thinking if we want to grow.

• How online business compares to traditional bricks-and-mortar business when it comes to costs and investment.

• Why many business owners underestimate the amount of investment required before a business becomes profitable.

• The difference between spending money like a consumer versus investing money as a business owner.

• Normalising there being a period where we invest more into a business than it gives back, usually a lot longer than people new to business are expecting.

• Why many of us will happily spend thousands of dollars becoming qualified professionals, yet feel uncomfortable spending hundreds or thousands of dollars learning how to build and grow a successful business.

• How to think more strategically about business investment and return on investment.

This isn't an episode about spending recklessly or investing beyond your means.

It's simply an invitation to think a little differently about what it costs to build something meaningful and successful.

And to become more comfortable with the reality that building a business does require investment of time, money, energy, skills, support and infrastructure.

I hope it gives you some food for thought and shifts your thinking so you can make the moves that will support you in growing and reaching your business goals.

If you had a takeaway or ‘aha’ from this episode and want to share it with your business besties and community, screenshot and share it on Instagram, tagging me at @jada.businessmentor. I’d love to shout out your takeaways and your support!

💬 Let’s connect!

Instagram: @jada.businessmentor
Email: jada@riseandshinecollective.com.au

→ DM me on Instagram @jada.businessmentor or send me an email to jada@riseandshinecollective.com.au if you’re ready to explore live launching in a more aligned, ease-filled, and higher-converting way through 1:1 Aligned Launch Coaching & Consulting, or you want personalised and strategic support to create or grow an online offering (course, membership or program).

And please hit follow, leave a review, and share this episode with a business bestie if you’ve found it helpful.

Transcript

Episode 50. 

Welcome to the Aligned and Thriving podcast for ambitious female entrepreneurs, where we align systems, strategies, and self for more sustainable success.

My name is Jayda, I'm your host, and today I want to talk to you about investing

All right. Before we dive into everything, this episode is not about making you feel any kind of anything in relation to when you choose not to invest in things or when you choose to invest in things. And just to be clear, this is not about investing your money to grow it, like in shares and et cetera.

What I'm talking about is investing in your business. I should have probably said that upfront. So talking about investing in your business, and especially a bit of a mindset around investing in our business in [00:01:00] the online space. Now, I have owned and run various businesses, an events-based business, a bricks-and-mortar dance studio business which I still own with my husband but which I no longer actively run, and online business, variations of an online business also for years.

Now, I wanna speak to you specifically in the online space, especially if you've never owned a bricks-and-mortar business, and especially if you've come from a professional background and then moved into the business space. Now, in the online space, it is such a low investment to start a business. And yes, that might not be how you feel if you're fairly new into the game or even a number of years into it.

You might feel like you've been investing a lot of money, certainly a lot of time into growing your [00:02:00] business. And when you look at certain investments, whether that might be investments in learning, coaching, mentoring, spending on things like ads or software or your tech stack or subscriptions that, yes, they all add up, it might feel like it's a lot of outlay before there's any real solid return.

The thing is, and the main thing I wanna speak to you about is that is so normal, and actually the amount that you need to spend to create a successful business online is so much lower than if you go into a bricks-and-mortar style of business. And this is really what I want to bring to mind and to either remind you about or educate you about if you haven't experienced the other way around.

Now, I guess My second version of, coming into a CEO kind of role and probably the, first time it was a very big role, was actually stepping into a very established [00:03:00] business, and it was a dance studio that had already been running for twenty years. I had already been an instructor in that dance studio for around ten years.

I had... , I married the owner, so I'd come into more of the organizational side, , stepping through many different roles, events organizing, , through into becoming a part-time manager in the business and etc., before I then went and focused on a, an events business with a business partner, and then before coming back into this dance studio business.

And I remember clearly it was a much bigger business, much more established business, and I was suddenly, actually quite suddenly, the CEO. And I had so much more visibility, quite suddenly, across all of the different areas, including all of the expenditure. And I remember the first week that I was in charge of making that week's or fortnight, I think we were doing fortnightly, [00:04:00] payment, and I needed to go into my bank and increase it so that I was able to pay, I think, up to thirty thousand dollars.

And it was quite the baptism of fire in that expenditure and getting comfortable very quickly with paying invoices and paying total amounts out in seven thousand dollars, ten thousand dollars, you know, the expenses for that particular payroll and billing s-cycle being twenty thousand dollars. We were paying out around seven thousand dollars in rent.

We were paying out around ten thousand dollars in wages. We were paying out, you know, insurance. There's so many different pieces that come along with running that business. Now, we're talking about an established business here, but I want you to think a little bit about, say, setting up a bricks-and-mortar business.

If you were to go and set up a practice somewhere, you would be paying potentially thousands of dollars of rent every single month, whether or not you have clients yet. You would be [00:05:00] having to pay for the upkeep of that space. You would be having to pay for the fit out of that space. You would have to be paying for insurances.

You would have to be paying potentially staff members. If you think about a cafe or something like that, there is very specific, fit out. The, the tools, maybe you need a specific, you know, massage table or whatever it might be, all of the fit out that you need. So all of this expense before you can even start actually servicing clients Not to mention then, of course, we're gonna need to spend our time and our money on marketing.

You're still gonna need a website, you're still gonna need all of these different digital pieces to be able to have a su- a successful business so that people can actually find you and come in, and then you can service those people. Whereas in the online space, it is-- we can get started with a Facebook group, which is free.

We can get started with online platforms [00:06:00] which can cost $70, $50, $100 a month, which can feel like a lot, but it's actually not when we start to compare it. We can spend just a few hundred dollars a month and have all of the tools and the infrastructure that we need to be able to deliver, or even less than that.

We can set up on social media with a free account, and we can start attracting and speaking to our ideal clients and attracting in paying customers before we even necessarily have a website. We can get support, highly specialized, strategic

experience by paying thousands of dollars, yes But that is going towards you actually growing your understanding, your skills, and your ability to run that business, not into the rent or the chairs or the insurance. Yes, we do still need [00:07:00] to have licenses and insurances for online business, by the way.

But you get what I mean. So there is a much lower threshold, even when we are spending hundreds and thousands of dollars on getting support to actually run a business. Also, what else have you spent on actually getting into your career, paying for the education to be the professional that you are?

Thousands and thousands and thousands of dollars. But for some reason, there seems to be some kind of mentality that spending hundreds or thousands of dollars on the support and the structure and the learning or the pieces that we need, like meta ads, Facebook ads, feels suddenly uncomfortable and feels like a stretch and feels like it's too much to be investing early on in our business.

So I really just wanted to share around this to open up the conversation, maybe open up a bit of a mindset shift around is something too much to be investing? We need to be making the right choice. And don't get me wrong, there are [00:08:00] times when we legitimately do not have the cash flow, and it's going to be taking away from our family, and we need to be able to logically and, , level-headedly make decisions around that.

Now, I have many times, many, many, many times invested way beyond what would look logical or comfortable on paper. It has affected the bottom line of our family, the way that we live, the w- what we can spend, what we're able to do. You know, I have gone through times where I've gotten to the checkout at the supermarket, and I've had to actually put some things back because we didn't have the money in the bank that day.

I needed to wait a few days or till next week to be able to buy different grocery or more groceries. I have done that while investing thousands and thousands of dollars in support to help me to grow my business. Now, everybody's got a different threshold for that, and I don't want anyone to be going without the basics and necessities.

But [00:09:00] I just wanna bring awareness to the fact that when we're thinking about and we're worried about spending a thousand dollars on meta ads, and we're not sure how it's going to work out, or when we're considering spending three or five thousand or even ten thousand dollars, or in many cases, twenty thousand or thirty thousand dollars, um, in my case On mentors or the people who are going to be able to help us to actually create that solid business, who have the knowledge, who have the experience, or when we are feeling worried about investing in another subscription, which is actually going to give us the infrastructure that we need to run our online business, I want you to just think about that and pause and compare it to if you were going to set up a bricks-and-mortar business.

Now, the other thing is that many, if not most people who start a bricks-and-mortar business, so kind of, I guess, before the online space and all that kind of thing, what would they do when they went to start a business? They would get together a business plan, and they would go to the bank, and they would [00:10:00] get a loan, and they would get a business loan to start their business.

And what is actually so super cool and amazing is how it's affordable enough for us to be able to start a business online and attract people in and start working and having paying clients and customers without necessarily having to do that. But if you really wanna make it work and that's something you need to do, it's not something to be ashamed of.

It is how people have been starting and maintaining and growing businesses for decades. It does cost to start and run a business, but how lucky are we that we live in an age where that entry point is actually so low, even when we're talking about thousands of dollars It does cost money to run a business.

It does cost money to learn skills. It does cost money to get in front of new people. I remember back in the day with our dance studio, we used to spend... And I'm talking, oh my gosh, what [00:11:00] year would it have been? It would've been... This is before I was the acting CEO. I was still an instructor and then, the teachers' coordinator and a few different roles.

And I remember sit- starting to sit in on the, I guess, more the marketing meetings and starting to kinda come into that side of things. And seeing that we... Oh, what year? Hang on. What year? It would've been around, I guess, early 2000s, maybe like 2007 or 2008. And we were spending about $5,000 a quarter, I think it was, or every term.

We used to run classes in terms of, like, 11 weeks or something like that. So every 11 weeks, so it is a quarter, I guess, we were spending around $5,000 to have one ad, one ad, I believe, if I'm getting this right, I'm pretty sure I am, one ad, and I think it was, like, a quarter or a half-page ad in the newspaper.

And it used to work until it didn't anymore a few years after that. And it used to work. And [00:12:00] then I remember so clearly when we were getting into Facebook ads early on, years and years and years and years ago, and how we were like, "Oh, should we be spending a few hundred dollars, or should we be spending $500?

That feels like a lot to be spending on Facebook ads." And I went, "Hang on a minute" Hang on a minute. We used to spend like $5,000 on one ad, and it used to bring in people, and we would spend that five times a-- four times a year, four to five times a year, and now we're worried about spending $500 or $1,000 on Facebook ads?

Something doesn't add up. Something is not quite right here. And actually now, with the Facebook ads, we're able to measure who it's getting in front of, who's actually coming in from that. We could never really m-map that out so clearly with the advertising in the newspaper. Um, but when it was working, we were getting a lot of students, so we kept on doing it.

But you can see there the mindset, right? We had to go like, "Hang on a minute. What are we doing here?" We were happy to spend that because that felt just like that's what [00:13:00] it was. That's what it cost. That's what the newspaper said it was to invest. But now we're not sure because this is kind of like new and a digital thing, and I don't even know why, why we thought about it differently.

So that's kind of a bit of a mindset shift as well for you. Actually, even though it can cost, seem like or feel like, or it can cost a lot, it's actually such a lower, , investment that you can get started with. So really, I just wanted share a little bit around this. I wanted to bring some light to this.

I wanted to start a conversation about it. I wanted to hopefully get you thinking a little bit differently around the spend and the investment in your online business and what it takes to actually grow that. And when you're thinking about different investments and the return on those investments, we do want a return on investment.

And there's also a period, a long period, where we are investing in our business more than it's giving back to us, and that is also so, so normal. If you can imagine, it might cost [00:14:00] $150,000 to set up a cafe, and then you're already paying rent, and then, you know, you've already got staff that you need in there, and then you've already got all these overheads and all of this expense before you even open the doors.

How long is it going to take you to actually get to the point where you're paying that back and you're earning a profit, and the cash flow is positive? It's a similar thing with online business. It is part of starting and growing a business. We're going to have to outlay more than we're making to begin with, and we wanna do that smartly.

We want to make sure that we're investing in the right things and choosing the right things. There are a lot of times that I speak to people early in their online business, and they think that they need a whole lot of different things that they don't really need at that time. So you wanna make sure that you are getting educated, that you have the right information, and I guess this is where it can feel like it's spending a lot to work personalized or with higher level mentors and coaches and things like that.

But in the end, it actually ends up saving you so much [00:15:00] money and so much time. We can think that it's expensive to spend five hundred, a thousand, five thousand dollars, ten thousand dollars on Meta Facebook ads, but how much did it used to cost maybe to go in the newspaper? So let's just reevaluate and make sure we're looking at things in a business-minded way.

So I hope this has been food for thought. I hope it has been a little bit eye-opening. I hope it's got you thinking about where and how you're investing and how you feel about that investment and getting more comfortable in the fact that business does cost money. All right, if you have enjoyed this episode, please hit follow, please leave a review, please pass it on to another business friend.

I would so appreciate it. If you are new here, welcome. I should have said that at the start. If you've been listening for a while, thank you for being here, and as always, my DMs are open over on Instagram if you wanna reach out, connect, share a takeaway from this episode. If you share on socials, please take a screenshot or share something as a [00:16:00] takeaway and tag me.

I'd love to follow your journey and just connect with you. But otherwise, I look forward to having you here on the podcast again next time.