Why You’re Stuck in the Cycle of Broke

It’s a vicious cycle. One that paralyzes small business because of just how difficult it is to break.

It’s called the Cycle of Broke, and you just might be in it right now.

“What on earth is the Cycle of Broke?”

The Cycle of Broke is when you don’t have enough customers, but you aren’t doing anything to get more customers because you “can’t afford” to do any marketing. You can’t run any ads, you can’t hire someone to work specifically on getting you new customers… you can barely pay yourself a measly salary!

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Unfortunately, this cycle has no end! You’ll never get more customers knocking at your door without some activity from you to get them there.

“So what can I do to break out of the cycle?”

Don’t panic – I’m going to give you four ways you can break out of the Cycle of Broke to break .

Get down with Content Marketing. In short, content marketing means giving away free information in the form of blog post, newsletters, checklists, cheatsheets, reports, etc in order to establish yourself as an expert in your field. Once people start to get to know and like the valuable content you give away, many will convert into paying customers. It’s also a great way to build your list! (Find out exactly how in my webinar, Turning Likes into Leads).

It doesn’t cost anything to create and distribute content in order to drive more people to your website and get the word out about your services. It will, however, require a consistent time commitment. But you could start very simple with a newsletter or blog that you produce on your own, and eventually hire a freelancer to help you take it up a notch. Need a bit of inspiration? Check out real examples of how one of those very freelancers you could hire supercharged her content marketing by using social media.

Use social media to get the word out for free!

Facebook, Twitter, Pinterest, LinkedIn… I almost can’t believe these marketing tools are still FREE! They might not be forever, though, so I say get in while the gettin’s good!

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You can use social media to build up a fanbase of people who are psyched by what you’re doing and will actually help you get the word out FOR you! Not sure exactly how to go about this? Not to worry: we’ve put together some can’t-miss-em marketing guides to help answer all of your questions. Click to grab the one on general Social Media Marketing, or get specific with marketing on Facebook, Twitter, LinkedIn, and Social Media Optimization!

(Can you tell I’m excited about this stuff? Maybe just a little.)

Charge more for your product or services. OK, I know this one can be hard to digest. You’re probably think, “If it were easy to just raise my prices, I would have done it already!” Easy or not, your hard-working self very likely deserves a pay raise – who knows, you might be currently charging below-industry standards. So check out this step-by-step guide to increasing your prices in order to boost your monthly revenue so you can break free from this beast of a cycle!

Hire someone. Now before you think I’ve truly gone off the deep end, believe me when I say that this is a real option for  “broke” businesses. The Cycle of Broke means that you need more revenue in order to grow your business, right? But you’re already up to your elbows in serving your customers, answering emails, collecting payment, and so on.

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Here’s the deal: the FASTEST way to scale your time and expertise is by duplicating your working hours with another set of hands. Think you don’t have the cash flow to pay someone else? Think again: there are people around the country and the globe who have significantly lower monthly bills than you do and that are looking for part- or full-time work. You can find them on sites like Elance, oDesk, and Zirtual. Plus there are TONS of students looking to gain experience before they graduate and are forced to face the working world with a flimsy résumé.

This hire should either do something that directly makes you more money (like sales or marketing work) OR frees you up to make more money (admin and customer service stuff). So calculate what one new client or sale per month would make you, then use that as a guideline for spending on hiring. So if this new hire could free up your time to get 5 new sales and that will net you $500, that’s your budget for the new person. Whip up a job description that includes that monthly wage you can conceivably pay and post it online. Your next (and maybe first) employee is currently out there looking for that position, so help them find it but putting yourself out there!

At the end of the day, there’s no quick fix to get out of the Cycle of Broke. The only solution is to rev up your marketing in order to bring in more revenue. (And I know, it’s much easier said than done!) But you CAN break the cycle using one or more of the tactics above.

Are you familiar with the Cycle of Broke but are glad to say it’s part of your past? Tell us how YOU broke the cycle in the comments below, and let others learn from your success!

 

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About Laura Roeder

Laura Roeder is a social media marketing expert who gives businesses of all sizes the tools they need to make their mark on the web. She is the creator of the social media scheduling software Edgar, as well as social media marketing web courses like Creating Fame and Social Brilliant.

Comments

  1. Hello Laura, Great blog post! Exactly what I needed to hear. I was just ready to throw in the towel on my business. I have a similar business to yours, however, I am at my breaking point because I market, produce content, and nothing’s happening. I know the demand for what I do is there, because you and a few of my other colleauges are making a killing. The skill set I don’t lack for sure. I am just feeling very confused and frustrated because I know how to do content marketing and social media, but I am not getting the results I want. Therefore I often find myself procrastinating and not taking on projects. I am tired of living the feast and famine cycle. It’ gets discouraging. But I won’t give up faith and hope that I can come out on top soon. Thanks again, this is what I needed to hear today!

  2. Erin @ LKR says:

    Hey there Nina-Don’t give up and keep going :)

  3. Thanks Erin for responding! Ironically enough, someone just found my profile on LinkedIn and is thinking of bringing me on as an in house content marketing specialist or consultant. So I guess I am doing something right. :)

  4. Great encouragement! We have been creating TONS of content based on turning managers into leaders and it definitely gets frustrating when you don’t see the revenue coming in like you want. I’m just trying to keep pushing and not get discouraged. Thanks again for all your great articles!

  5. Thank you for encouraging your readers with your post. This blog site is very practical and helpful. Love the articles sharing your tools with us. Have a great day.

  6. Great advice! At first hiring someone goes against our instincts when we’re trying to save money, but I agree it’s a huge help. Hiring interns is also a great way to balance a need to have someone on your team with the constraints of a your budget.

    My experience hiring an intern for a few months was fantastic! She had such innovative ideas, was organized and truly added some serious value.

    • Erin @ LKR says:

      Hiring can help bring in money so you can focus on the business! Glad you had a great experience with your intern.

  7. oooh, what a great post. It’s given me some things to think hard about – such as seriously considering getting someone to help me in – even a few extra hours a week would make a massive difference to my ability to earn properly. Ahh, my brain is ticking fast now!
    thank you

  8. I’ve been in my current business for many years however it is only recently (earlier this year) I “got the balls” (as such) to increase my prices. I also decided to boutique my business instead of “growth growth growth” and one of the ways I’ve done this (to have potential clients “qualify” to work with my business) is through price.

    There was an initial dip in revenue .. and was still in the feast/famine cycle however I knew that this new change would pay off in the end and it finally has … 2-3 months later :-) We have new clients paying our “new client” prices (which are quite high) and plenty of on-going current clients happy to pay our “current client” prices which I increased too.

    We also “off loaded” not so ideal clients even one that had been with us for years (they had become bad at paying even tho’ they had been loyal clients for years).

    Thus for everyone reading – take heart. Some of the changes you make now may not pay off dividends initially however in the long run will pay off both financially and mentally :-)

  9. Great piece! On the last point, my first hire was very much a “er can I afford this?!” moment but a few months in it was more like “how can I afford not to have this!” After that space opened up to do so much more and it was a great choice.

    Funnily enough, years on and expanding my team the can I afford this thing came up again the other month but having gone through it before I know this is awesome advice (whether broke or looking to grow what you can achieve :)

  10. Laura, I love most your quick comment in the eblast that says you’ve consciously broken income ceilings overandover again! It’s essential for growing the business of my dreams, and while I’ve done so many times, and have proven investing in such with additional staff is worthwhile, it still puts me in hyper to-do-list-and-budget-watching mode. Thanks for tip to invest what you think the new person’s time will buy you in redirected focus. It’s a great guideline for adding staff. Sharing now!