Have you had a business idea in your head for a long time but haven’t acted on it yet?
Have you started an idea (be it a blog, a business, a service, etc.) but can’t seem to make it take off?
Are you a wantrepreneur who wants to become a profit-generating entrepreneur?
This is for you.
Over the years, I’ve launched, scaled and failed with a variety of online businesses. Some took off and are thriving to this day, and others didn’t exactly work out. I have learned firsthand and from my mentors what the art of making money is all about.
My experience with bringing ideas to life and turning them into profitable business has taught me one valuable lesson:
You have to spend money to make money.
Now before I get into tactics to help you make your money work for you, I think it’s important to caveat that spending more money DOES NOT mean you’re going to make more money. It certainly does not.
In fact, I’ve seen some real bozos use the “you have to spend money to make money” line of thinking to help them rationalize some silly, non-essential business expenses. You should have patience when it comes to spending money and should not rush to spend (more on that later)
With that being said, spending money does indeed help you make money – or at minimum, it puts you in a position to do so.
For those of you who are entrepreneurs, you know what I mean. For those of you who are considering starting a business or launching a creative endeavor I want to encourage you to do the following with your next paycheck: spend it.
Yes, I said it.
Instead of investing that one paycheck into your 401K, putting it into that mutual fund, saving it for that trip or sliding it under the mattress, I want you to spend it.
I want you to spend it on something specific and something strategic. I want you to spend it on something that will not only help bring that idea of yours to life, but also scale it to make you some serious money.
Now, before you do that, I want you to keep reading.
Here are the 4 things you need to realize about how to turn money into more money.
1. Breaking even can be extremely profitable.
Whenever I start and begin scaling a new business, my first goal is to get to a point to where I am spending as much money as possible. Usually that goal is within the context of marketing or advertising, but I suppose it could extend to other aspects of a business.
Here’s what I mean.
When launching my first side hustle, for example, I was focused on selling an online course product. A large aspect of my marketing strategy was to establish an email relationship with potential customers. To do that, I needed to catch the eyes of folks who might be interested in my product and would be willing to provide me with their email address in exchange for something for free and then an opportunity to sell them something.
To catch their eye (I had a following of zero), I needed to SPEND MONEY! I started with some simple ads running on Facebook, Instagram, etc. and soon realized something very important:
The more I spent, the more I made. (duh!) But there’s more to it.
While my efforts were not profitable (my ads were costing me more than I was grossing with sales), over the course of 30 days I came to see that the more I spent – the more I made over time and the more brand awareness I created that ultimately grossed me sales. Key word here is: over time.
Here’s how it looked.
$200 in ads per day.
$150-$200 in sales per day.
100 new emails per day.
The value of that ad spend wasn’t the sales but rather the emails! Those 100 emails turned into 20-30 sales a couple of weeks later. Flash-forward a couple of months and this is how things netted out:
$25K in ad spend.
$70K in sales.
That’s a 3x return on ad spend (decent) and as you can see with the daily revenue being breakeven or under, the value of that ad spend came from the emails I was able to acquire and then eventually convert to sales down the line.
The lesson here is that sometimes the money you spend doesn’t net immediate return, but if you are strategic with what you are collecting/garnering, then it absolutely can be extremely profitable down the line (as long as you are strategic and have connected these dots). I proved this 100% with my efforts and have since ramped up this strategy even more… the more I spend the more I make.
2. Patience = old school money making
While I am all for spending money to make money STRATEGICALLY… don’t spend just yet!
I didn’t ramp up my spend until I knew exactly what I wanted to garner and how I was going to eventually convert these new assets.
The key with the “spend money to make money” line of thinking is to look beyond where the puck is now to where it will be.
If you can connect the dots and be forward thinking, spending money will bring more money.
For example, I have recently spent more and more money on the PRSUIT Facebook page to boost our content to get it exposure to more people. This has resulted in over 30,000 new followers in less than 2 months and over 400,000 new visitors to PRSUIT.com. While this has not resulted in immediate 1:1 revenue, it has enabled me to close a deal with Staples, connect with Jake Paul, make an appearance on E! Entertainment, get accepted into several premium ad networks (from which we are now making positive revenue), and have several other large 5-6 figure deals on the table. Spend money to make money.
3. Don’t spend needlessly.
I have been successful with my “spend money to make money” strategy by being patient with it.
The majority of the thousands and thousands of entrepreneurs and small businesses that fail each year are those that spend money needlessly and do so time and time again.
Be strategic with WHERE you decide to spend money and realize that you don’t have to reinvent the wheel to make money!
If you are selling a physical product, you don’t necessarily need to spend more on manufacturing. Spend more on marketing or faster fulfillment.
If you are an artist, don’t spend more on a fancy exhibition space or pop up shop. Spend, instead on influencer marketing.
If you are a musician, don’t spend money on producing swag to hope that gets the word out. Instead, spend on ads targeting journalists, influencers, etc.
I am not an expert on all things marketing by any means, but I have learned that before you start spending money, you need to know where to spend it for most effect. Once you figure that out, I am confident that it will start provide ROI.
4. Use it intangibly.
Outside of spending money to make money by dumping it into awareness creating tactics like marketing, etc., the biggest lesson I’ve learned when it comes to the art of making money, it’s this: hiring the right people can make all the difference.
The right people can make you millions. The right people can also cost you millions.
The right people can take your business from the garage to the top floor.
Hiring the right employees is everything.
When you are a young entrepreneur just starting out, there is an inherent knowledge and experience gap you will need to overcome. Hiring the right person can do just that.
I have hired amazing people and I have hired horrible ones. Hire someone who has experience and is willing to put in the hours. This frees you up to do more for other aspects of your business, and I promise you that will it feels horrible to part with money each month, but it will come back in folds if you hire the right person.
What to do with your next paycheck.
When you get your next paycheck, take it (or a portion of it) and set it aside with the above in mind. Sit down and map out a strategy of how to spend that money and how that will help take your idea to the next level.
The other aspect of spending money to make money is that as you spend, you also become dedicated to your creation. When you spend, you commit yourself and the process of going “all in” begins. It means you are serious about making your passion project/business a reality. It means you are stepping off of the sidelines and into the game. Spend, but spend patiently and strategically.