Business Unfiltered
Reinvesting In Your Business
November 7, 2023
Welcome back to Business Unfiltered with Mercer and Jeff Sauer today's topic is Reinvesting In Your Business 0:00: Jeff defines reinvesting as putting profit back into the business, such as into new products or growth. 1:45: Investing and reinvesting in a business. Jeff and Mercer discuss the concept of reinvesting profits in a business. Mercer believes that reinvesting profits is not always the best option, and it's important to consider the timeline and potential return on investment. Jeff provides a balanced perspective on the topic, distinguishing between investing and reinvesting, and highlighting the importance of managing investments through to completion. Jeff shares his approach to investing in his business, prioritizing hiring ahead of revenue and reinvesting profits to fuel growth. Sauer notes that many entrepreneurs struggle to break through a financial barrier due to a lack of reinvestment in their business, leading to inconsistent revenue. 6:46: Investing profits in business reserves vs. hiring employees. Jeff and Mercer discuss their experiences with reinvesting profits in their businesses, with Sauer emphasizing the importance of having faith in one's business and the speaker highlighting the need for reserves to account for uncommon events. Mercer reveals that they have made a mistake by investing in people instead of reserves, and Sauer acknowledges the importance of having a timeline for results and knowing how to measure success. 9:11: Investment strategies and cost management. Mercer reflects on past mistakes in investing in people, particularly failing to set clear expectations and timelines for results. Mercer aims to avoid this mistake by creating a plan ahead of time, defining expected outcomes, and having a contract-like approach to hold themselves accountable. He emphasizes the importance of staying logical and realistic, rather than getting emotionally invested in a situation. Mercer reflects on past investments, acknowledging that sometimes investing in people or training can feel like a "negative investment" if it's not yielding the desired results. Jeff shares his experience of investing in a coach for someone who wasn't working out, realizing that taking expenses lower can be a form of investment strategy, as seen in private equity firms. 14:11: Investing in business growth and prioritizing resources. Jeff emphasizes the importance of investing in the right "who" rather than figuring out the "how" for business growth. Sauer uses the Boston Consulting Group matrix to illustrate the importance of balancing market share and growth in business strategy. Jeff emphasizes the importance of investing in "stars" and "question marks" in a business, rather than "cash cows" or "pet projects." He advises allocating 80% of investment to "stars" and 20% to "research and development," citing Google as a successful example of this strategy. 19:00: Reinvesting time and resources for business growth. Mercer discusses reinvesting time and money in response to changing technology, using the analogy of horse and buggy drivers needing to adapt to cars. He suggests downgrading or moving employees who refuse to adapt to new technology, while still finding a place for their skills in other companies. Mercer says reinvest time to find obvious errors in expenses, reducing costs and increasing profitability. Jeff says working on your business is a better investment than almost anything else, as it reduces the need to solve fires and problems, leading to a more profitable and less chaotic business. 22:43: Reinvesting time and resources in a business for growth. Jeff discusses the importance of investing time in his business, including taking a week off each quarter to work on big problems and spending one day a week on business development. Sauer believes that time is the cheapest investment a business owner can make, yet few take advantage of this opportunity to reinvest in their business. Jeff and Mercer agree that investing time and energy in the right areas can lead to significant growth and efficiency in business. Reinvesting time and energy in the form of attending mastermind groups, utilizing AI tools, and optimizing processes can help businesses stay ahead of the curve and achieve better results with less effort. 27:06: Managing time and leveraging AI for business success. Mercer: Taking time to focus on tasks without distractions can lead to better productivity and creativity. Jeff: Leveraging money to buy time from others can lead to increased efficiency and innovation. Jeff shares his entrepreneurial journey and experiences, including lessons learned from building a tiny home.
Topics Covered In This Episode

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