So this was a question that came in for “Ask Claire” but I thought it would make a good blog post. How much money should you invest your in your business? Before reading this post though, I did a part one which covers “Things To Do Before Starting a New Business” so I recommend reading that first!

Now if you’re at the point where you know you’re ready to jump in and start a new business, one of the things to think about is – how much do I need to invest to get things moving? In my experience from my blog/website, Avail, and now Parry – start as small as you can. Meaning, do not think you need to invest a ton of money to get everything “perfect.” You’re going to start to learn so many things along the way, and you’ll likely need to pivot and adjust so the last thing you want to do is spend a ton of money right away and then realize that it wasn’t necessary, or you need to adjust your offering, product, etc. And then all that money you initially put in could have gone to waste. Here are some examples of what I mean:

When I started my blog, I could have paid a designer 5K+ to design a site for me. But instead, I used a free WordPress site for the first 2 years. After that, I paid someone a smaller amount (~$1500) to add some new features and updates to my existing WordPress site. Then, 2 years after that, I invested around $5k into new branding and a new website.

Now with Avail, this is a great example of why you start smaller because a) it’s better to have less inventory and sell out then order too much and be stuck with having all of your money in a product you can’t sell and/or b) you never know if you are going to have to change plans/pivot and you don’t want to feel like you’ve invested so much money that it isn’t an option. With Avail, I initially started off with designing one tank top and two leggings. At first I was like “omg this is way too small a collection.” But honestly it was the best decision because if I would have launched with that, I would have gotten great feedback and could make adjustments if necessary for next launch vs. having a huge launch to begin with and then having to make adjustments while trying to sell all that inventory. And as most of you know, I ended up not launching the top and leggings because Parry came into the picture. So I had to pivot and decide which business I wanted to pursue. Now, I had already invested a good amount in creating the designs for the top and leggings but if I hadn’t started with a smaller collection like I had, I would have invested way more than was necessary and would have lost all that money. Again, the point here is start small. You may not be able to get started for free/close to free (like I had with my blog) but there are always options of how much you can do/invest to get going.

Last example is with Parry. Parry was the biggest financial investment I made upfront because I didn’t have as many options. I still had options, but was just more limited in the sense that the app had to be developed at a bare minimum. There is no way to “start small” with that. However, things like expanding to other counties, having the app available on Apple Watch, etc. would have added thousands and thousands of dollars to that initial investment. Would it be nice to be able to offer it to more countries? Yes. Would it be nice to be able to have it on Apple Watch? Yes. But are those things necessary to launch? No. Like both other examples, you start with as small of an investment as you can and then when you have proof of concept you can continue to invest from there.

I know I haven’t given many specific numbers regarding “how much to invest” because it really is dependent on what is required of your product/service to get started and also your personal finances. But what I will say is you never want to put yourself in a position to have a mortality event – and this can dictate how much is a good amount to invest. A mortality event is something I heard Tom Bilyeu talk about at a business conference. Basically you never want to take a risk so big and/or make an investment so large that if it doesn’t pan out that it will either kill your business or “bankrupt” you. Starting a business is about taking risks and you never know if what you invest is going to pay off. However, it’s about taking calculated risks and being patient. No one is an overnight success. Don’t feel like “I won’t be successful if I don’t get this business from 0-100 within the next year.” Good things take time.

All that to say, hopefully when you think of all these things together that gives you a better idea of what kind of investment makes sense for your business! Feel free to comment below if I can answer anything else!