My $42,120 Mistake

On February 1, 2017, my lease went into effect and it almost killed my business.

Over the next 3 years, I would spend over $42,000 in rent, electricity, and internet. Not counting the cost of furnishing, office supplies, travel expenses, etc.

A couple of weeks beforehand, I had just closed 2 more clients. My MRR was now $8,000.

Thinking I “made it” and thinking that people who’ve “made it” have offices, I got an office.

~2500 Sqft (~232Sqm) in the heart of downtown, my name laminated on the outside of the building (and a couple of places inside too), what else could an ego want?

The funny thing is, for someone who had “made it” I stopped paying myself anything at this point.

I was still living at home with my parents, so my expenses were very low.

As soon as I got the office, I went from paying myself very well – to only covering my expenses.

Instead of getting an apartment or giving myself a consistent salary, 95% of what I made went right back into the business. And this made 100% sense to me at the time.

Time went on, clients came and clients went. But, even as my MRR began to steadily grow, slowly but surely, my office went from my pinnacle of achievement to the greatest barrier to my growth.

One of my largest clients was an agency I white-labeled for, they paid for most of the tools I used. Eventually, issues came up – they owed me over $10,000 (a story for another day) and we inevitably stopped working together.

In a matter of months, I went from working from home paying myself $5k/m with almost no expenses, to needing $5,000/m to break even.

There were times during 2017 where I would spend over 48-hours at the office, working non-stop and sleeping on the floor for a couple of hours at a time to keep things afloat.

I took on overhead that I could “pay for”. I had the money, I paid all my expenses every month and never went into debt, but I really couldn’t afford to drop that much on an office.

There were times when I couldn’t pay myself more than a couple hundred bucks because I had to pay the $1,200 office expenses first. Times where I couldn’t afford to delegate tasks, to invest in marketing, or to take a day off.

This hurt my growth a lot.

Inflated my expenses, lowered my morale, and made me miserable.

Inevitably, I would have to move out of my parents. And I did. Which saw my expenses massively increase.

I now had to pay for an office and an apartment. I worked out of the apartment, the office was just another line-item expenses. I wasn’t even using it for the last year that I had it!

Last Sunday, I handed in the keys at the end of my lease.

$42,000 spent in 3-years. $0 returned.

A week before turning in my keys I committed about the same amount I was paying per month for the office into a marketing campaign that will last for at least 12-months.

A campaign that could easily be worth $100,000 – $250,000+ in the next 12-months.

Question your purchases, no matter how small. Limit overhead – you’d be surprised by how much money your business wastes over the course of a year.

How did that conference help you?

How better did that course make your services?

Was that business class flight for a 2-hour journey worth it?

Do you really need that office?

Now, imagine where you could be if you had invested that money in the right places?

Just my $0.02

Author: Jarod Spiewak

Marketer by day, frustrated programmer by night. I build businesses through digital marketing, without all the BS.

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