What do most parents teach their children? What did yours as well as my parents teach us?
” Be careful out there!”
” Don’t do that, it’s dangerous!”
Parents want to protect their children, and that is what I do with my own children as well. However, for an entrepreneur who aims for success this is bad, because we have learned to avoid risks and to live carefully ever since we were children.
When was the last time you hurt yourself? When was the last time you have lived ”on the edge”?
Most of us have a strong sense of self preservation, but this same instinct affects the business related decisions we make. Most of us avoid taking risks, and aim to conduct their business cautiously. This halters development and prevents fast business growth.
The massive growth of a business demands massive action, and it also involves taking big risks. If you always shy away from taking risks, it is very difficult to find yourself on your way to strong business growth. Strong growth requires taking risks, and risk taking demands courage. The courage to take risks is not a characteristic, but a trait that can be learnt and developed.
What, then, is the meaning of all this on a practical level?
Risk taking is most often about investing money. It is about you, as an entrepreneur, having the courage to put your own money on the line and take the risk of possibly losing it. You should never bet your whole fortune on a single card, but an entrepreneur prone to taking risks, might even put 50% of their liquid assets on the line to reach their goal.
Let’s presume that you have 10,000 euros in your ”pocket”. This is all your capital at the moment. You want to build an online store, so you invest 2,000 euros on products and on building your online store. Then you wonder why business is so quiet.
What is the next thing you should do?
You should take risks boldly, and invest, for example, 6,000 euros of the capital to Facebook or Google advertising to direct customers to your store. The money won’t just disappear, it is used to generate sales, and in this way to generate new money to the cash register.
The majority of people act carefully, i.e. avoid taking risks. The majority would not invest more than half of their capital to advertising to generate sales and new clients. Most small entrepreneurs don’t dare to invest money in advertising because they consider it risky. However, an experienced advertiser knows that by using conversion marketing to their advantage, investing in advertising is quite safe.
The name of the game is that in order to get money from your customers, you must first put your own money on the line, and one of the most important investment targets is advertising. The money invested in advertising creates sales, customers, and through this, growing turnover.
What does massive success demand? Massive investment and quite often taking big risks. In online business massive investment often means strong investment in advertising. Generating a turnover of 10 million might demand, for instance, an investment of 1-2 million euros in advertising (this only as one example of many).
An investment such as the one described above is not a one-time thing, i.e. it does not mean that you should magically bring up a million dollars to invest solely in advertising, it is more about starting with, for instance, a budget of 5,000 euros and recycling the income from sales back to advertising, until you have spent a million euros’ worth in advertising, on a time span of, for example, 2 to 3 years. Meanwhile you might have generated a turnover of 10 million.
Paid advertising (Facebook, Google, etc.) is therefore about playing with capital. It requires taking risks, but the risk taken is a fairly controlled and conscious one. If you, however, don’t dare to invest in advertising, and to take the first steps in this game and even to lose sometimes, it is likely you will never find yourself on a path to strong business growth.
How to advertise in a way as to get yourself on your way to strong business growth? Is the question that I will answer in my training courses.