I had an epiphany the other day and it’s that I really need to be utilizing all of the credit I have available to me and reinvesting large amounts of the money I make back into the growth of my company.
Maybe this seems like an obvious things for many people but for me, it was a total departure from how I’ve operated. Historically I’ve never paid for marketing and my costs have always been very low, so anything I made was basically just straight income for me.
But now that I’ve successfully purchased another hosting company and quickly grown my business that way, my mindset has completely changed. What if there was some magical way to continue spending my revenues on things that will get me new clients?
I say that tongue-in-cheek, but it really is so different from what I’ve done historically that it’s actually a novel idea.
I actually had the thought while reading the book Sapiens. The author is discussing Consumerism and Capitalism and describes how the wealthy capitalists reinvest all of their earnings back into growth, while the consumers, well… Consume. They spend what they make on stuff.
While he by no means glorifies capitalists, it still made me think about how I’m running my business and realize that I could really be doing things differently.
So now that I’ve decided to do that, the question is: where do I spend this money?
One of my top choices is to simply buy more business. You get a lot of clients at once, on-boarding is simpler, and it just works. There is little-to-no sales process which is great. Plus I get all that link juice which is super nice.
But I haven’t tested whether it is repeatable to just continue acquiring businesses. I’ll have to reach out to a bunch of owners and see if I can find any that are looking to sell.
And then there’s the other options of paid advertising. Ultimately, I have some idea of what it’s worth to me to have new clients. If spending on advertising costs less than what clients are worth, I should proceed full-steam ahead.
The main thing is that I need it to be repeatable and scalable. Unlike in-person networking (which I can only do so much of), the right paid ad could be completely scalable. Spend more: make more!
So over the coming months, I need to work really hard to test out different marketing methods, and figure out which once I can repeat over-and-over again. I’m thinking that if I can get new hosting clients for $100, it is absolutely worth it to do so.
Since I’m willing to pay more than 1x recurring yearly revenue, the price I should be willing to pay for a new client would have to be at least that.
If a normal hosting client will bring in, at a minimum, $300/year, I should be willing to pay at least that much.
With that said, other than acquisitions, I have not found any reliable ways to spend money and get clients. None of the things I’ve tried have worked.