Dear Accountancy Owners, Acquisition Cost Is A Mindset, Not Just A Metric

We are wired to hold onto our resources.

When we are faced with another potential cost, our primal urges will resist it.

But spending money is a reality of business.

So we need to differentiate between what costs to incur, and what costs to avoid.

One mistake I see Accountancy Owners make is avoiding growth-related costs/expenses.

Should you be smart with your spending? Of course. But this business function doesn’t deserve MORE scrutiny than others.

I know some may argue it does.

‘But Jack, when I pay for something like electricity, I know I am getting a tangible result. With advertising/marketing/growth/sales, it feels like I am lighting my money on fire.’

I will concede with growth-related costs, there is less certainty.

Because we don’t control all the variables (ie Other humans, their schedule, and their priorities) our businesses don’t grow EXACTLY the way we would like. Wouldn’t it be good if they did?

Is that new prospect ready to sign? Great!

Oh wait, they just had an important staff member leave and now their mind is elsewhere.

A scenario like this isn’t within our control and never will be.

So given the inevitable uncertainty and bouts of disappointment related to growth, what is a more productive mindset?

Start by accepting there is a cost attached to growth.

When something doesn’t go as planned try thinking ‘This is part of my acquisition cost’ instead of ‘What a waste of money/time’.

My clients find it takes the pressure off and allows them to be more proactive with their growth efforts.

‘Ah well, this will blow the acquisition cost out a little bit, but I will continue to work on ways to reduce it’, is a thought you should get used to.

When considering a new growth-related expense, ask yourself ‘What effect do I anticipate this purchase will have on my acquisition cost?’ rather than a knee-jerk; ‘This seems too expensive.’

I recommend having a ‘Target Acquisition Cost’ and an ‘Acceptable Acquisition Cost.’

Then spend your effort making the latter the former.

When you stop getting frustrated and feeling ripped off at growth-related costs, you will have a more enjoyable experience.

Accepting there is an acquisition cost is as important as measuring it.