The ROI of Thinking Like a CEO

We've all heard the phrase, it costs money to make money. Well, do you remember your first big investment that you made into your business? I do. And it was scary. I remember being nervous, excited, a little nauseous, as I wrote a check to join a mastermind for $10,000. At the time, I was coming off nearly a year of maternity leave, where we had been making ends meet from my husband's teaching salary. I had a few clients who had me on retainer, very part-time hours, but reality was hitting me that it was time to go all in on my business so I could support my family. And at the time, investing that $10,000 seemed like a huge stretch, but I made a decision, a decision to commit to go all in, and it made all of the difference for me. It shifted my mindset from, how can I afford this? How can I handle this added expense to my business? To, how can I get the return on investment? How many clients am I going to get in order to make back this investment? I realized I just needed to find new consulting clients and suddenly it didn't seem so scary to make that investment.

So today I want to share with you the return on investment of thinking like a CEO, how we can make smart decisions about when, and where, and how we spend our money as we're looking to grow our business. Are you ready to grow from solopreneur to CEO? You're in the right place. I'm your host, Racheal Cook. And I've spent the last decade helping women entrepreneurs start and scale service-based businesses. If you're serious about building a sustainable business, it's time to put the strategy, systems and support in place to make it happen. Join me every week for candid conversations about stepping into your role as CEO, the hard lessons learned along the way, and practical, profitable strategies to grow a sustainable business without the hustle and burnout.

Okay, let's get into the show. As I was thinking about this topic, the return on investment, the ROI of thinking like a CEO, I was really reflecting back through a lot of conversations I've been having with my clients, especially when we get in a room together at our CEO retreats, or when I'm sitting down with my CEO Accelerator clients, I get asked all the time, "Rach, when is the right time for me to invest in new branding? When is the right time for me to invest in a better website? When is the right time for me to invest in a team member, an assistant, a designer, a copywriter? When is the right time for me to invest in attending conferences and events? How do I know which expenses I should take on in my business and if I can afford those expenses in my business?" And these questions are not very clear-cut. There honestly is no one-size-fits-all answer for these.

But I wanted to share with you today a thought experiment, a way to look at making these decisions in your business, because the truth is it does take investing in all of these different types of things in order to grow your business. There is no business that operates with zero expenses. So I wanted to go through this thought experiment. How do you get an ROI for your time, your energy, your money, and make sure you're being smart and strategic about how you're deploying these resources in your business? So the question I'm always asking is, is this truly an expense or is this an investment? Because there's a clear difference here between expenses and investments. Now, on your P&L, on your Profit and Law statement, yes, these will all come under the expense portion, but an expense is what's required just to run the business. It is the cost of goods sold. It is the cost of delivering that service.

For my guy who comes to cut the lawn, it's the cost of having the lawn mower, maintaining the lawn mower, putting gas in the lawn mower, changing out the belt in the lawnmower, sharpening the blades in the lawnmower, those types of things. It's the cost to deliver whatever it is that you're delivering. But then there's investments, which should yield a return. They should yield a return on investment, so that means every dollar you put in should give you back $2, or $5, or $10. It should give you back a return on time. So you're spending money in order to buy back your time, or it should give you a return on your energy. You're spending money in order to free yourself up to do things that are not as draining energy energetically for you, that are in your zone of genius, that are easier for you to manage.

So when I think about this question, it really helps me get clarity on what's actually an expense and what is an investment into my business. So I have some examples here of the difference between an expense and an investment to try to help you think through this as you look through these decisions you might be making, because there are going to be some things that are just truly expenses. I just had to pay my renewal fee to the state of Virginia, to have my LLC filed with the SEC. That was an expense. It's not giving me return on anything other than I'm legit.

There's going to be a fee for my bank account in order to just have a bank account. I'm going to have a website hosting fee because I need to have a website. That's not necessarily giving me a return on anything other than it's hosting my website. I have to have my phone. That is an expense. I need to have a phone. There's really no return of time, energy or money for whatever I spend for my phone every single month, same with internet. These are just expenses inherent in running a business, and there's a few of them. So I think about these things as far as expenses, pure expenses, things that I'm required to run the business in order for me to operate this thing I'm operating. They're just things that I've got to pay. But my goal when I'm looking at them is to make sure that I am minimizing unnecessary expenses.

So I'm not going out there and taking myself out to lunch every single day, just because I can write it off on the business, because that would be an unnecessary expense. It's not giving me an ROI at all. It's just writing things off under the business. Doesn't make sense. So when it comes to expenses, my goal is always to make sure I am not overspending in those categories. The categories where I tend to get hit on a lot of these things, most of my expenses that are true expenses, honestly, for a lot of them are going to be software and subscriptions, paying for website hosting, paying for my email service, paying for Libsyn, which hosts my podcast. These are just expenses, cost of running the business. It's what it takes for me to have this kind of business up and running. That's fine. I just don't want to have too many of them. I don't want to have 10 different social media schedulers when it's basically repeating the same expense a million times. I want to audit those expenses. I want to kill the overhead. I want to have a lean business as much as possible.

But there are some other areas in my business where I am willing to spend more, because I don't see them just as an expense. I see them as an investment. So let's talk about some of these examples. My first example here is around marketing, branding and having a quality professional website. In fact, I just had a VIP day with one of my amazing accelerator clients, Sharvette Mitchell, who has mitchell-productions.com. I'll make sure to link her up in the show notes because she's incredible. But we were talking about some of her existing clients and how she had somebody who came in and signed up with her to build out a website. And she has a whole way she's delivering these websites for people, but it was a website, a photo shoot, a brand logo, all of that jazz. And for $5,000, somebody came in and a month, a month and a half later, walked out with all of these components of a professional, polished brand ready to launch. And this client came back to her within a few weeks and said, "In the couple of weeks since this has been launched and live, I've already gotten a return on investment, because I booked $8,000 in new revenue." What? That's crazy. So not only did they earn back what they invested into this website, but they earned more.

It was one and a half times ROI within a couple of weeks. If you multiply that out over the course of the following year or two years, however long it takes, however long they're using that website, it'll be a multiple times over. \So this is something I think of when it comes to marketing and branding. Whenever I'm looking at investing in my own marketing and branding, I am willing to pay in order to have the level of professionalism, in order to have my brand truly reflect the quality of my offers, in order to reflect the quality of what I deliver to my clients. So what do I have in my own line items? And I'm actually looking at my P&L to share with you guys. So something that we invest in, we invest in a designer. I have a designer who actually put together our beautiful CEO Retreat logo, and she put together the CEO Accelerator logo. I'm not messing around with trying to do that myself. I'm not a designer. And I wanted to be really congruent with the level of experience that we offer. She put together a beautiful workbook. She's working on more print materials for us.

We wanted to make sure that every touchpoint, when you show up for the CEO Retreat, is all reflective of the brand we are creating. It's all professional, it's all polished, it's all cohesive. And it really lends itself well to the overall experience. It helps position it as a premium experience. This isn't just a little cheap workshop that you can go do for 20 bucks. This is an experience that you're stepping out of your business to be a part of. So we want to make sure that the branding is reflective of that, and we do that through design. That's a big part of reflecting the value of what we have to offer. Another area in the marketing, branding world is investing in a photographer. So I reached out to a friend of mine and asked, she wasn't even offering this when I reached out to her, but I was like, "Would you be open, Angie, to showing up and doing quarterly photo shoots with me?" And she had already started doing brand photography.

It's Angie McPherson, who's amazing. She's based on Newport News and comes here to Richmond to see me, but she had been doing all this great brand photography. And I said, "My business is shifting, social media is shifting. I need a lot more visual content and I don't necessarily want to buy stock photography anymore, because it's not aligned with my brand. Could you come? What if we had quarterly photo sessions?" She was like, "That's great. Let's do that." So she's done a photo shoot at my home office. She's done a photo shoot for the CEO Retreat. She'll be doing more throughout the year. And for me, that is an investment in my business. Not only do I get that return, but now I have marketing collateral that I can use to go promote the CEO Retreat. I have something I can use to go and then promote and fill it again, and again, and again. So that's an investment for me. Those pieces are investment. Having the quality branding, having the quality photography, everything that truly reflects the value of what we're doing. It helps reinforce the overall brand and it also helps attract people who are looking for that level of experience.

So for us, that is an investment. And like I said, with Sharvette's client, she got the new website, it launched and pretty quickly she got new people in the door. That's the power of having a beautiful brand of making sure it's all cohesive. Now, I do want to say here, that doesn't mean you need to go out and spend what I might be spending on my branding and photography and having a designer. That's not what is necessary for everybody. Again, we all have different amounts that we'll be spending on these different types of things based on where you are in your business. I didn't invest this much when I was getting started in my business, but I still made sure that I was presenting a polished, professional brand. And I would spend a little bit more to make sure that it was reflective of the value of work that I do, the caliber of work that I do, and attracted the right type of client to me.

So for me, branding, marketing materials, photography, those types of things really fall under the investment category. And I really don't take them lightly. If I'm going to invest in those things, I'm going to make sure that I have a reason why, and that they're going to help me earn more money or get more clients. If I'm not having a problem with getting more clients or I'm not trying to get a different type of client, there's nothing worse than just branding and doing all of that when you have no reason to do so. So I wouldn't necessarily just be investing in this all the time. I would have a strategy around it, but I think it's definitely an investment that you should be looking at, probably once every year or every other year. How can you make sure that your brand is on point?

Okay. Next investment area that I think is something a lot of people wait too late to invest in, and that's hiring support. I find a lot of us who are entrepreneurs, we are good at figuring it out. We're pretty resourceful. We will Google all day to get to the answer. The problem is we waste a lot of time on Google trying to get all the answers and we don't know everything about everything. So the learning curve in all of these different areas can really use up a lot of our time. And like I said, time is a resource that we are trying to conserve. We're trying to be smart with it. Googling all the answers is not a good use of your time. So hiring people is something that most of us need to start doing earlier than we are. Now, one of the easiest areas that I think pretty much everybody should hire out is accounting and bookkeeping. And I use this example because most of us know we aren't experts in this area.

I'm not an expert in this area. I don't want to screw this up. So I pay, I think it's like $180 or $185 a month to Bench bookkeeping. They have tiers of pricing, but that's what I personally think I'm paying right now. But Bench bookkeeping is an online service, again, I will link it up in the show notes, that handles my bookkeeping. And I know that if I was responsible for updating my bookkeeping every single month in order to have something ready for my accountant every quarter or at the end of the year. I know myself. I know that I would wait till the last minute, because I don't want to do it. And then I'd spend two or three days in a panic trying to find all my receipts, trying to get all the information, trying to remember why I spent this on that, trying to get all the details together. And it's just very, very stressful. And because I know myself, I also know that it's really stressful for my accountant when it's time for them to do their part of it and help me figure out how much do I have to pay in tax, what we need to file and where.

It's very stressful for me. So it's not a good my time. It's not a good use of my energy. Paying $185 a month for someone else to deal with that, and all I have to do is go in once a month and spend 15 minutes and just answer their questions as they go through all my transactions and they note where they have questions. And once they understand where things go, they really don't have many questions for me, but it makes my life so much easier. It frees up so much time, seriously, like a day or two of me previously scrambling around trying to figure out what all the transactions were.

That is a great return on time for me. I'm not going to make any more money by hiring a bookkeeper, except it does free up time, which then allows me to go do something that's revenue generating. And the same thing when you look at hiring other members on your team. So I feel like a bookkeeper is a really easy example for a lot of people to wrap their minds around. But this also applies to hiring a team member who can help you alleviate other bottlenecks in your business. One of the biggest bottlenecks I see for a lot of people is going to be around admin, customer support, kind of doing all the little tasks that need to get done in your business. Managing your calendar, communicating with all the clients, handling your inbox, making sure your travel details are all ironed out if you're traveling a lot. Those are things that yes, you can do it, but as your business grows, those demands become more and more.

And this is where I start to hear from people that they're spending not just an hour a day in their inbox. And the inbox is the worst. The inbox is where it hits a lot of people. But I hear from people who are like, "Yeah, I spend two or three hours a day on email." What? That is such a waste of time for you as the CEO. You need someone who can filter that for you. So this is where finding an admin, a customer support person can really, really alleviate that bottleneck for you. If they can take on, let's say 20 hours of work for you a month, that's five hours a week. It's not that much, but because that's what they're focused on, that's what they're specialized in, they can move through those tasks a lot faster than you or I can. My favorite part about having an assistant, who's kind of that intermediary between me and the rest of the world, they're the first person everybody hits when they hit our inbox, is it really frees up my time because they can sort through those emails very quickly. And instead of me having a hundred emails a day, I only have to look at maybe a handful and it makes my time in that category a lot smaller.

So let's imagine that you found someone to help you out for five hours a week, an hour a day. Let's say a baseline cost for hiring a virtual assistant, you're going to head over to hiremymom.com, which is one of my favorite places to find great qualified admin, customer service support, and maybe you'll pay $20 or $25 an hour. So if you're doing five hours a week, that's like 20 hours a month and it's $25 an hour. That's like 500 bucks a month. But what does that free you up for? Let's say that that 20 hours that they're now taking off your plate, you can spend 10 of those hours with clients. So now you have space in your calendar for 10 new clients. And let's say that your hourly rate is $150 an hour. So you can now go out and make $1,500 and then pay that assistant $500. You end up netting an extra $1,000. So you hired that assistant and you're able to buy back your time so that you could go out and make more money. And that's not even using the full 20 hours they freed you up. You can then use some of that time. Let's say you use half that time with 10 new clients, use the other half of that time to go out there and market your business, to promote your business, to get more visible, get in front of more people.

That's how you start buying back your time. And then, you not only get the return on time, because you're buying back your time. You get the return on energy, because you're not stuck in something that's not your zone of genius. You're not stuck doing busy work and you get the return on investment, because now you can deploy your energy, your time into higher revenue generating tasks. I think this is really, really important. So this is something again, like I said, a lot of people wait too late until they are absolutely stretched too thin. And they're overwhelmed and completely frustrated. If it's time to get out of your own way a little bit, you'll be amazed. There are a lot of amazing qualified people who are excited to help you manage your inbox, who want to help you manage your calendar, who want to free up a few hours of your day so that you can go do higher-value stuff. There are people who that makes them happy. It's the perfect job for them. And if you can deploy that time differently, if you can take that freed up time and put some of it towards marketing and put some of it towards actually working with clients, you will get that return on time, energy, and money back very, very quickly.

Okay. This final example I have for you, example number three. When we're talking about the return on investment of your time, energy, and money, when it comes to thinking like a CEO, is something that might surprise a lot of people, because this is very kind of like inside baseball, no one really talks about this, unless you are surrounded by high performing people. People who are committed to becoming the best in their field, who are committed to growing amazing organizations. But for entrepreneurs, there's not always this conversation. And this is investing in yourself, in your education, your training and your development. So I started understanding this a lot, especially going through my master's program and then getting a lot of training as I went through corporate. And I found this quote from Jim Rohn, early on in my career. And he says, "Your income seldom exceeds personal development." Whoa, that really hit me. And when you think about this, most people do not continue to develop themselves voluntarily.

In fact, the stats are crazy on this, it shocks me. A third of high school graduates, never read another book for the rest of their lives. 42% of college graduates never read another book after college. 80% of US families did not buy or read a book in the last year. Now, I am a total reader. I'm a voracious reader. I read one or two books a week. So to me, these stats are shocking, but it makes sense to me that the people who truly are able to get new ideas, to learn from other people, to learn from other resources, they are able to move faster and they're able to go further. So I loved this example that Brian Tracy, who's like the godfather of personal development. He had a ton of training, I learned from when I was in corporate, in fact. And he shared this example, and he says, "The level of success we experience in our outer world is a reflection of our self-identity and personal development in our inner world."

Let's use the analogy of a thermostat. Thermostats have what's called a set point, the set temperature in a room. No matter what happens, hot or cold, the thermostat will kick on the heat or the air conditioning to bring the temperature back to that set point. So if the thermostat is set at 74 degrees, if it gets a little too hot, air conditioning comes on, brings it back down. If it gets a little too cool, heat comes on, brings it back. Inside each of us is also a set point. This is your current level of development. No matter what happens outside you, a temporary financial windfall, finally losing those 20 pounds, your marriage going well, you will always adjust back to your set point. You will only ever have, be, do or maintain on the outside what matches your inside set point, which is your personal development. What? Isn't this crazy? This thought process to me was amazing. And it really reaffirmed that, "Okay, this needs to be an ongoing thing." If I don't want to default back to my set point, if I don't want to limit my potential to make an impact with my business, if I don't ever want to hit the best year I've ever had and make that all that I could do, then I've got to be expanding my capacity.

I've got to be in training for it. I've got to be developing myself. Just like if I was deciding I'm going to be able to work up to running a marathon, which again, I use this marathon example, I really shouldn't, because I'm not a runner, but I would have to surround myself with people who can help me train, who can hold me accountable, who can coach me through it, make sure I do what I need to do, who can develop me so that I become a marathon runner. Well, the same thing in your business. So those examples here, from Jim Rohn, income rarely exceeds personal development, and Brian Tracy talking about this idea of a set point, is really incredible to me. And I also heard another quote from Darren Hardy, who's the... He used to be the editor of Success Magazine. I think he's off on his own now. Anyway, he shared in a presentation I attended, he said he invests 10% of his income back into personal development. So if he made a $100,000, that means he had $10,000 to invest back into his personal development. If he made $500,000, that means his budget was now $50,000.

And for me, this was really powerful, because it gave me a frame of reference. How do I budget for my development? And he actually said, when he's ready to really learn something, he goes at it from multiple angles. So if there's something he wants to master, he picks up a handful of books. He's going to learn from a few different sources. He's going to take a course or two, he's going to attend a conference and he might even hire a coach or an expert to help him really master that topic area. That was hugely helpful for me to hear that. So from a very early part in my business, I always was putting aside 10% of my goal revenue to invest back into myself as the CEO, as the leader of this business. Now, when you're first getting started in your business, you want to start with something that makes sense for you. And maybe 10% feels like a stretch. That's fine. The percentage is irrelevant. It's take a percentage of what you're aiming for in your business and invest it back into yourself. And as you grow, those needs will shift.

So when you first get started in your business, for a lot of us, we need to invest in our skillsets. Our skillsets, delivering what it is that we're delivering. So improving on what we're actually doing for clients or learning from industry experts, learning best practices, learning how to be better at your craft. So there's part of that, but there's also learning skills to run your business. And when we're getting started, most of us have more time available than money to hire these things out. So we have to learn certain skills. We have to learn a little bit about copywriting. We have to learn a little bit about marketing. We have to learn a little bit about sales. So maybe you buy a book or you attend a workshop, or you take a course. You have to learn how to do those things. How to get at least proficient enough to get that business up and running. But as things shift in your business, as your business grows, you don't have to become the master of all the skills. You just need to hire people who have those skills.

So then the focus shifts from learning how to do all the roles in your business to hiring for those roles and running a team, making sure that you can lead those people, helping you think a bigger vision. And that's a big part of what I'm starting to experience and what I'm seeing with my clients and my Accelerator is they need more strategy. They're more high level. Instead of, "Nitty-gritty, how do I do this one specific thing?" It's more high level. "Okay. How does this all fit together? How does this get me where I want to go? What does that vision actually look like? Who do I need on my team to get me there?" These are higher level questions that we need to start getting support for ourselves with. And as you continue to grow, you shift from learning how to do the skills, to learning how to manage people or hire people who can implement for you, and you're now shifting to more of a leadership role in your own business. You also have to master self-leadership and taking care of yourself.

And so for me, a percentage of my budget this year, I invested in my own mastermind, I invested in my own mentor and I also put a percentage of that into my own care, my own ability to protect the asset, because if the business relies on me to have the energy and the focus to move it forward, I've got to make sure I've got the energy and focus to do what I want to do, to have the ability to go after this big vision. So I decided this year that I was not only going to invest in a mentor, and a mastermind, and go to a few conferences, attend a few events, that's all in my budget for myself. But I also decided I was going to hire a functional medicine doctor. I was going to really make sure my health was dialed in. And oh my gosh, does that make a difference. Talk about a return on investment. I got a huge return on energy just by having somebody who could sit down with me and say, "Hey, these are areas in your health we're going to work on, and every quarter you're going to come back and get your testing, see how things are improving. We're going to make sure that you're on track to get the energy levels that you need in order to go after this big vision." It's incredible.

So I hope that this episode gets you thinking. The difference between an expense and an investment. An expense, we all have expenses. When you look at your profit and loss, yes, pretty much everything falls under the expense category, correct? But there are some things that you are spending money in order to make more money, in order to make back your time, in order to buy back your time, or in order to free up energy, in order to allow you to focus on things that bring you energy, instead of things that drain you and your business. And this shift suddenly helps you see that there are some areas where it's not a question of, can I afford that? It's how can I make this happen? How can I make sure that I am able to go out there and achieve this vision that I have and have the support that I need to make that happen? So getting to this next level of success in your business, it requires thinking differently. It requires getting out of this comfort zone. It requires taking bigger leaps of faith.

And I can tell you that the first investment you make into your business, whether it was $1,000, or $2000, or $10,000, I mean, those investments are just the beginning. There's not going to stop. Every time your business grows, your investments, your expenses will grow right alongside it. So just get used to the idea that it does take money to make money. You're going to have to spend money in your business, but you have to be smart about where you're spending money. Like I said, expenses, you want to minimize those. Kill the overhead, run a lean business. Don't have unnecessary expenses if they're not actually investments. If they're not bringing back more time, more energy or more money to you, then you probably don't need to take them on.

But if you are going after something that can bring you that ROI, make sure you're thinking through, "How am I going to get that ROI? If I'm freeing up 20 hours a month because I'm hiring an assistant, how am I now taking back those 20 hours for myself and deploying them in my business. If I'm hiring someone to up level my brand, how am I making sure that that's going to bring me more clients? If I'm investing in my own personal development or I'm going to this conference, or I'm going to be doing something to push me out of my comfort zone and to help me raise that set point, so that I can become a better leader and make a bigger difference with this business, how am I going to make sure that I get the return of that time, energy and money for every single thing that I'm doing?"

So I hope that helps. This is a different conversation, but I promise, if you start to focus on the return on investment of creating the business you want to create, of building and going after that big vision that you have, it might not feel easy. And in fact, I can guarantee it's not going to feel easy. It's going to push you. It's going to kick you out of that comfort zone pretty quickly, but it will also get you where you want to go a lot faster.

If you loved today's episode, please take a screenshot and share it on Instagram. Tag me @racheal.cook. I will be resharing these on my Instagram, on my Instagram stories. And let me know what is your biggest aha or insight. I want to hear from you. This is a little bit more of a complicated topic, but I think bringing up these types of topics will shift a little bit for you and the way that you're approaching and thinking about your business. My goal is to get you thinking a little bit bigger and thinking about how you can make the impact I know that you are here to make. And it starts with, again, promoting yourself to CEO. That's why we renamed the show to really reflect this mission that we are going after together. For full show notes, head over to rachealcook.com/show. And if you don't want to miss any future episodes, make sure to subscribe to the show via Apple Podcasts, Spotify, wherever else you listen to podcasts. Thanks for listening. Talk to you soon.