Where should I invest in my business?

At Manifestation Architect we believe there are three investment areas that will lead to sustained growth in your business: Coaching, Systems and Business Design. But how do you know which area you should invest in?

In this blog post I provide a simple model helping you decide where you should invest your time and dollars. In latter blogs we’ll dig deeper into what investment each area might look like. Before we go over the model. Let’s define coaching, systems and business design.

First off you would hire a coach to help you listen to your intuition, filter through the noise, eliminate mindset blocks and to have someone hold you to your highest potential as you focus on personal development. You would not hire a coach to solve specific problems. You would hire an expert to implement systems or to design aspects of your business.

Experts are more of a consulting role than a coaching role. Although it turns out 80-90% of business problems end up being mindset problems. That is why it is important to have a good coach. Otherwise you run the risk of falling prey to flashy solutions and people with good sales skills. Personally this why I seek to master coaching before selling design and systems services. I want to make sure I’m selling the right solutions. Then when you hire me for business design and system design service you also get a great coach. 

You can think of systems as the moving parts in your business. Systems are energy and value conservation practices. Some examples are: automations, project management tools, customer relationship management software, sales funnels/pipelines, email campaigns, standard operating procedures, databases. The list of tools and system features available these days is quite remarkable. It’s a great time to be in business.

Business Design is all about value creation and value monetization. This can be business models, marketing plans, service design, product design, branding, user experience design, business innovation and strategy.   

Back to talking about where you should invest in your business. We all want our revenue and profit to go up over time. This is a sign of a growing business. Although maybe not the sign of a healthy business. Things like employee satisfaction, owner freedom and several other factors matter depending on your vision. We’ll cover these other areas in a later blog when we talk about designing your business around the flow of energy.

To make sense of where to invest I plotted revenue going up over time and then tried to imagine how investment in each of these areas would effect the graph in the desired directions. After playing around with it a few times I came up with the model below. 

Invest in Business Design to increase revenue. Invest in Coaching to compress time. And invest in Systems to reduce headcount.

The horizontal axis is time. The right vertical axis is revenue and the left vertical axis is the number of employees that can support the revenue coming in. What we are really after at the end of the day is profit. So we are clear profit is revenue minus expenses. This is net cash flow and why books like Profit First are critical to any business getting started.

Billed hours by employees and contractors is one of the largest expenses in the digital online space. Lucky for us there are several ways to leverage peoples time and extract more value within your business.

By reducing the number of employees or billed hours we can increase our profits. This is why I choose to use two axis: one for revenue and one for # of employees. I tried to plot just profit. But then investment in business design and business systems both lead to profit. But they increase profit by different means. One is by addition the other by subtraction. For the model to prove useful we need to map one investment area to a single axis. This allows us to see the linear effect of investing in each area. Obviously the real power is successfully combing investments in each area to produce exponential growth.

So how does investment in Coaching, Systems Design and Business Design affect the chart?

Coaching allows you to compress time x-axis and accomplish stuff faster. What used to take 5 quarters we may complete in one. 

Investing in Business Design increases the slope of the graph. The creation of new products, services, disruptive business models, soul touching content are all things that can lead to increased profit if done correctly. The increased slope moves the graph up for more profit and eventually more people to produce the profit. With the right designs may jump from $10k to 50k months instead $10k to $15k months.

And this is where investment in systems pays off. Investment in systems stretches the left vertical axis allowing you to support more profit with less people. Would could have taken 5 people to run a business investment in systems could reduce this to only requiring two people. 

At this point I’d like you take a look at this model and think about your business and share any reflections you might have in the comment section below.

• Have you invested in either of these areas?

• How did it work out for you?

• Does this model bring any new insights on how to run your business?

 Personally, what comes to my mind is I see design whether it be business design, product / service design as as the injection of value into your business. Since it adjusts the revenue slope it is tied to both the x and y axises I view coaching and systems as the stabilizing factors to successfully achieve and realize sustained profits created from good business design. 

In summary,

• invest in coaching to compress time.

• Invest in business design to increase revenue

• invest in systems to convert your revenue into more profit.