Help me figure out how I should reinvest business profits

image_thumb20I’m approaching the end of my second fiscal year. (Hooray!) I thought I’d review my decisions for reinvesting profits, plan ahead, and ask for feedback. Here’s how I reinvested some of my profits this year:

 

  • Tools and education:
    • I bought $289 worth of books, including pricey but useful books on drawing emotions and stick figures (Bikablo, from Neuland). I’ve made the most of them by reading, taking notes, and sharing what I’ve learned, so this was definitely worth it.
    • I also took the AlphaChimp Rockstar Scribe course (CAD 298.66, it’s now USD 497; affiliate link). I picked up a few tips on digitizing scanned sketches (lesson 6: digital documentation). The exercises also prompted me to put together my 3-word life philosophy and my 5-year plan.
    • Next steps: My laptop should be good for another year or two, so I have no major upgrades planned there. I may invest more into courses. These tend to be bigger commitments, but I think the experience might be worthwhile. I can test this by seeing if I can improve my retention in free or low-cost courses (Coursera, Udacity) before going on to more expensive courses. Gotta build up those study habits! If I find that I’m hitting the limits of what I want to learn in group classes and I’m already making the most of the Q&A or mentoring that courses tend to offer, then I can look into getting a one-on-one coach.
  • Connecting with people:
    • The biggest chunk here was flying to London for the Emacs Conference, which was a great way to connect with people, create resources, and develop skills.
    • I also signed up for HackLab ($51.75 a month) as a way to connect with other geeks and have a place to work at when I’m downtown.
    • I attended networking events ($170.45). AndroidTO was less useful than I expected because I hadn’t actually been developing stuff then, although it was good sketchnoting practice. The Third Tuesdays Toronto events were definitely worth it for me. Rotman events were okay.
    • I met four people for lunches/dinners and had lots of tea with others, talking about mentoring or business opportunities.
    • Next steps: I want to focus on virtual connections, because there are lots of interesting people out there. This means ramping up my scheduling, inviting people to reach out, and reaching out myself (possibly appreciating people with gift certificates or donations to charity)
  • Delegation:
    • I greatly increased my delegation budget compared to last year. I subcontracted $1,333.34 of my work and delegated an additional $2,030.30.
    • Hiring a virtual assistant to help with scheduling really helped me get past the hassles of booking people. Worth it.
    • Hiring a transcriber for my podcasts and presentations worked out well, too.
    • Hiring a local consultant to help me brainstorm was okay, but not amazing. It was a helpful nudge to work on my marketing, though.
    • Hiring another on-shore consultant to give me feedback on my website and e-books was also okay but not amazing. It was great for pushing me to add more hand-drawn elements to my website, though.
    • Hiring a developer to work on Rails prototypes gave me a leg up on dealing with various APIs, although I ended up not pursuing the projects.
    • Next steps: Virtual assistance gives me a low-cost way to experiment with and learn more about delegation. In addition to ODesk, I should experiment with Fiverr, Guru, and other sites.

I made $90 in e-book sales in FY 2013, which absolutely delights me. It’s a tiny fraction of what I make in consulting or even sketchnoting or speaking, but it’s a start. I’ve been moving towards a Pay What You Want model so that everyone can get access to the resources and people can show their appreciation by funding future experiments. My experiment-related savings take care of my living expenses, so everything goes to Making Stuff. I want to focus on making more things.

For this coming year, I’m planning to focus on consulting until it winds down. I’m also going to ramp up creating content: blog posts, drawings, articles, e-books, courses, and more. I often get requests to sketchnote events or other people’s content, and I’d like to refer those to other people instead of handling them myself. That way, I can help other people grow, and I can make myself learn more about creating my own content.

Ideally, by September 2014, I’ll have:

  • a separate topic-focused weekly blog with evergreen posts and useful, well-formatted, illustrated articles
  • several e-resources for that blog
  • a mailing list that I’ve learned how to use
  • and possibly a course that includes tips, worksheets, checklists, animations, and video

I might keep a "Wanted" list on my site so that I can funnel other requests to it, like people looking for sketchnoters. That way, instead of simply telling people no, I can help them a little further along the way and help other people grow their businesses too.

Here’s my plan for getting there:

  1. Brainstorm headlines and article ideas to help me choose which topics I want to start a weekly topic-focused blog around.
  2. Get feedback on which topics people would like to read about first. Start collecting e-mail addresses for launch.
  3. "Bank" 4-8 good articles (write two months ahead). Invite early readers.
  4. Publicize it a bit more widely once I’ve gotten into the rhythm of publishing on the blog and I know that the rate is sustainable.
  5. Plan an outline for a brief e-book and gear my articles towards that.
  6. Reach out and find guest posting opportunities once the blog is more established.

To make the blog different and useful, I plan to illustrate the ideas with one-page cheat sheets / references. This will also make a handy collection.

With that in mind, what are some ways I can reinvest some of my profits in order to make things better, and which ways make more sense than others? These are ordered in terms of how useful I think they will be, with the best ones on top. I’d love your feedback and suggestions!

  • Find a system administrator who can help me review my config and backup plans, and who can answer questions from time to time. As someone said, good judgement comes from experience, and experience comes from bad judgement. I can learn things on my own, but it’s probably really good to take advantage of other people’s hard-won experience too. That way, I have a solid platform to grow on.
  • Go through a course like the ones offered at Platform University, CopyBlogger, or ProBlogger. I can get multiple levels of value out of this. First, there’s the lessons themselves. Even if I know most of the basics because I’ve been blogging for more than ten years, it will be good to deliberately go through them. I can turn them into blog posts about my experiences applying those tips. I can turn them into sketchnotes and references. Along the way, I’ll also learn about the structure of courses and communities – what I like or don’t like, and what other people seem to respond to.
  • Sign up for a good mailing list service, possibly with an autoresponder or digital delivery mechanism. This will give me more control than simply using FeedBurner to give people e-mail updates.
  • Sign up for survey tools so that I can get better feedback. Provide giveaways or incentives for survey completion.
  • Experiment with richer media: presentations, animations, podcasts, video. Buy tools and hardware. Possibly delegate editing. Podcasts and screencasts might be a good way to work myself up to doing webinars regularly.
  • Pay for a web conferencing service, and set up regular web conferences or webinars. Monthly webinars might justify paying for a premium service so that I’m not constrained by Google Hangout or AnyMeeting’s limitations. I can also use this to interview people. Any recommendations for a cross-platform webinar service that allows all participants to chat with each other?
  • Work with a reputable SEO company to avoid penalties for duplicate content and to learn more about doing keyword research. Sometimes little tweaks make things more findable or discoverable.
  • Invest in better web planning and design, maybe for the topic-focused blog. I might start off with a basic template, fill it in with content, add some resources, and then go for a more professional design when the topic and audience for the blog has firmed up a little. That way, I can get feedback from people too.
  • Buy premium plugins, scripts, or themes to make navigating the blog or content easier. A responsive theme and a good gallery can make a lot of difference.
  • Buy books, read them, and give them away. That way, I’m not limited to the library’s selection. The library has lots of books and it could take forever for me to get through the backlog, but learning from and sharing tips from newly-published books may create more value for readers. Plus, if I set aside a budget for shipping (which is expensive in Canada!), I can give lightly-read copies away. I’ve had publishers send me copies of books to review, so maybe I can ramp that up also.
  • Hire someone to format e-resources. They can help develop the template, lay things out nicely, and make sure it fits in well with the blog.
  • Learn how to work with article writers or pay for excellent guest posts. I have the time to write and I enjoy writing, but I’m curious about the perspectives that other people might bring.
    • Worst-case scenario: They write the first draft, and I end up rewriting it extensively because I have a better idea of what I don’t want.
    • Best-case scenario: I give them a topic to write about, they come up with insights or research I might not have come across myself, and then I can personalize it with more stories or experiences.
  • Work with copywriters and editors and get better at writing.
  • Hire a coach to help me learn more about planning posts, creating resources or courses, building a community, and so on.
  • Buy domain names and learn how to set up landing pages.

Image credit: Piggy bank (Oliver Hoffman, Shutterstock)

  • mchua

    You mentioned reinvesting into your equipment, but I don’t see reinvestments back into your body, which is arguably the most important equipment you have. I know you do monthly massages, but is that enough for your hand/arm/wrist/shoulder articulation? Is this something you can dig deeper on, learn to be more conscious of your fine control? (It was mindblowingly amazing when I started working on this for myself, especially learning ways to work out my own muscle kinks and being aware of precisely which muscles they showed up in and why.) If you’d like me to write that up as a blog post of my own, I’d be happy to.

    Also, two blog posts I’d love to see from you, based on this post:

    1) Step-by-step howto (with scripts, email scripts, etc.) on how to hire a virtual assistant to help with scheduling.

    2) A course review of Rockstar Scribe (sketchnoted, maybe). It’d also be a great thing to send back to them. (Do you think the course was worth it — enough that you’d recommend it to a sketchnoting grad student on a budget?)

  • http://sachachua.com Sacha Chua

    Oh, I allocate funds for personal care out of my personal budget. =) W- tries to go for monthly massages; I end up being mostly quarterly or semi-annually. He also has some excellent rollers and massage aids, so I’ve been meaning to dig into those.

    1) Yup!
    http://sachachua.com/business/scheduling/
    http://sachachua.com/business/process-scheduling-an-online-conversation/
    http://sachachua.com/business/delegation-how-i-hire-and-manage-my-virtual-team/
    http://sachachua.com/business/archive-job-post-for-virtual-assistant/

    2) No, I don’t think it would be quite a good fit for you. There was a recent comment discussion along those lines that you might find interesting. I’d be happy to help you learn the specific things you want to learn. There are a lot of free resources, so it doesn’t make as much sense to pay that much.

    • http://sachachua.com Sacha Chua

      I should note that the private health plan I set up does allow me to convert dental appointments, massages, etc. into before-tax expenses, although I still mentally account for it as separate from my tools and education reinvestment fund. :)

  • http://assiduum.wordpress.com Tommy

    Sacha, as usual, you seem to have applied a level of thought and analysis to this that is way deeper what most people would have, so I don’t have much on the specifics to add. Your ideas on outsourcing pieces of work — SEO, editors, copywriters etc — are spot on. Tim Ferris talks about some very good successes on outsourcing non-trivial work in his “4 hour work week”. The account at the start of Chapter 8, of AJ Jacobs’ experience in outsourcing some work to an Indian remote EA (“Honey”) is particularly eye opening on that front.

    However, one general piece of input I could offer would be to note that that in my own business spending, I’m tending more and more towards purchasing fewer things but of higher quality, because I find that in many areas one has to get above a certain low-price threshold in order to get *any* quality at all. In an increasing number of areas of products and services, it’s possible to spend money on what turns out to be well-nigh useless for the intended purpose. The purchase was, in effect, a waste. Opportunities for false economies abound on the internet.

    A specific albeit small example is I’m beginning to buy more hardback books, and fewer paperback or e-books. Paper and e-formats provide access to a vast number of books, in always-available formats, but it turns out I’m probably going to live for fewer than 100 years, and am unlikely to be able to devote *all* of the 24 hours in each day of those 100 years to reading! So vastness in number, and always-available aren’t valuable benefits to me. Given that I will not be able to read the vast majority of books out there, I’m now tending to buy a smaller number of very well-constructed hardbacks (therefore, more long-lasiting and lendable/give-away-able), by authors/publishers I either respect myself, or who are respected by reviewers/friends I respect. Also, I take the mere fact that an established publisher has decided to invest up front in a hardback edition as a positive economic signal that the book’s worth buying. The extra cost is worth it since it’s effectively me paying a knowledgeable editor to express their opinion on the book. Never a guarantee, but it improves my odds that my precious reading time won’t be getting wasted. As I say, fewer things, but higher quality per thing.

    Another very important area in which I apply that approach is in buying services. Here it is much harder though. For every good web designer, there appears to be hundreds of incompetents. The same applies in accounting, book-keeping, sysadmin, programming — pretty much any service where excellence is possible in theory but cannot easily be identified in practice up front. Akerlof market information asymmetries at work. So in general, I’d rather buy one programmer for $100/hr, than four for $20/hr. The challenge is, obviously, to be able to figure out the underlying cost:performance function of programmers.

    • http://sachachua.com Sacha Chua

      I’ve drastically cut down my book budget by going through a well-stocked public library. It takes some time to get new releases, but there’s a huge backlog of excellent books that I have yet to go through. I tend to buy just new releases that I haven’t managed to convince the publisher to send me. ;) I don’t care as much yet about the longevity of my books because I rely on my notes, which also make it easier to review the key points or share them with others. If I get a hardcover, it’s usually because that’s the first form to be released and I want to learn from the book early enough so that other people are still looking for that information by the time I publish my visual book review. Also, author book tours tend to involve hardcover copies of their books, so that’s awesome – I get a signed sketchnote out of their presentation and a book. =)

      I think it’s worth paying for value, too. If I can specify the work in detail, I don’t mind working with low-cost people (ex: the scanning of my receipts). If I’m uncertain or if this is something I need to learn more about, then I want the experience of someone who can justify a higher rate. On the other hand, lots of low- or medium-cost experiments are also a good way to learn more about delegation and outsourcing… I’ve got a lot to learn about this! Since I haven’t talked to a lot of people who have experience with writing coaches or article outsourcing, I should probably reach out more, and I can also try a few experiments of my own at different points along the price scale.

      Thanks for your post on professional service rates, by the way!

      • http://assiduum.wordpress.com Tommy

        > … a well-stocked public library.

        Yes, I’m envious of the awesome-sounding Toronto Public Library System, based on earlier posts of yours and from friends I have who live there. Here in Texas, they’re not so organized (I reminisced about that kind of thing here: http://www.darklingwood.com/2011/05/on-libraries.html)

        > … lots of low- or medium-cost experiments are also a good way to learn more
        > about delegation and outsourcing…

        Definitely. That’s another clear message I took from Ferris. He took his time, kissed some frogs first, and generally learned not to underestimate the effort needed by the outsourcer to “train” even the best outsourcee to become effective for them.

        BTW, it’s been interesting watching your sketchnote development. One of my team and I were experimenting with that too (well, him more than me!). I just noticed he put an examples here: http://prezi.com/goqr8gyazq0u/colo/. Verilab previously sent him on one of Tufte’s “Presenting Data and Information” courses, and more recently we were picking up some inspiration from Austin Kleon’s book (http://austinkleon.com/). Although it’s all good stuff from the point of view of the viewer of the sketches, my own primary interest is in the benefits, in terms of learning, sketching has for the sketcher.