How Spending $138,491.42 on Meals Made Me $992,000

fine dining

Every year, my bookkeeper sends me an email breaking down my spending habits. For my personal corporation, I spent $138,491.42 on meals over the course of 12 months.

At first, I thought there was a clerical error as that number comes out to roughly $11,540 a month. There’s no way I could have spent that much on business meals, right?

The number was so shocking that I decided to dig a bit deeper. I asked myself a few simple questions:

  • How is it possible that one person can spend $11,540 a month on food?
  • Am I wasting money by paying for meals?
  • Is there an ROI?
  • When should I be paying for meals and when should I not?

What I found from digging into the data was quite interesting…

Download this bite sized cheat sheet to get to know how spending $138,491.42 on meals made me $992,000.

The cost of business meals

Over a period of 12 months, I had 603 meetings that took place over a happy hour or a meal. It averaged out to $218.02 per meeting.

The figure may seem high, but 18 of the meals involved many of my coworkers, and those meals totaled well over $2,000. The amount I spent on meals with coworkers was $51,491.28, which made up 37% of the total meal spend.

What I found is that even a lot of the smaller meals were with coworkers, and I always ended up paying. Why? Because I appreciate all of the effort they put into my businesses. Without them, my companies would not exist.

I also had 6 meals that were over $5,000 each. All of them were with potential clients who all enjoyed fine dining.

The rest of the meals ranged in prices.

Am I wasting money on meals?

Sadly, there is no black and white answer. Why? Because the meals all served different purposes.

In my book, spending money on coworkers and colleagues is never a waste because you are showing your team members that you appreciate them. For these reasons, I never try to calculate an ROI on this set of expenses.

As for my meals with potential clients, they ended up panning out well. I generated $520,000 in revenue from these meals. Out of all the money I spent on meals, $72,489.31 was spent on entertaining potential clients.

This leaves another $14,510.83, which was spent on meals with other entrepreneurs. In many cases, these entrepreneurs were either giving me free advice, or I was helping them out with their businesses.

The meals that I paid for with other entrepreneurs yielded a lot of valuable information. While I didn’t end up moving forward with much of the information provided, I did leverage a few tips.

In one of my meetings, a gentleman by the name of Zak Westphal introduced me to the concept of sales floors. He told me that there are a ton of reputable companies in Utah who can call customers on your behalf.

I eventually ended up switching from having sales calls made in California to hiring Utah-based companies for one of my businesses. Not only did it save me money on labor costs, but it also generated an extra $285,000 in sales.

In another business meeting, an entrepreneur told me how geo-targeting within your website copy can increase your revenue.

geo targeting

By inserting the visitor’s location into the website copy (as in the example above), I was able to boost sales for a few of my businesses. It didn’t help a ton, but it did bring in an extra $187,000 in revenue.

The ROI of paying for meals

Paying for meals can provide an ROI, depending on when you are paying. With employees, it is always worth it as it shows you care about them; you should never track the ROI of paying for meals with coworkers.

As for potential clients, I found that paying for meals doesn’t necessarily guarantee that you will get the business. I went back and asked each company that hired me why they chose to work with my business. They all mentioned that my reputation and track record were the deciding factors.

It was definitely a nice gesture that I paid for the meal, but even if I didn’t do so, they would have still likely signed up.

Paying for meals while networking with other entrepreneurs provided the best ROI by far. I only spent $14,510.83 on meals with other entrepreneurs, and it increased my revenue by $472,000.

When you should and shouldn’t pay for meals

Now that I’ve been able to analyze my spending on 603 meals over a 12-month period, I know when to pay for meals—and when not to. Here is my general rule of thumb:

  1. Coworkers and employees – always pay for their meals because they work extremely hard for you. If they aren’t working hard, you should rethink who you hire.
  2. Potential clients – you shouldn’t necessarily take them to the most expensive restaurants, but you should try to pay as a courtesy. Just make sure to keep the costs low as paying for meals doesn’t necessarily mean more revenue.
  3. Fellow entrepreneurs – I always try to pay for meals. This is not because I am looking for an ROI, but because I want to show respect. If I invite someone out to a lunch or dinner meeting and they take the time out of their busy schedule to do so, I always try to pay.

Conclusion

When paying for meals, don’t try to get a direct ROI. It will happen naturally every once in a while when someone gives you some useful tips or wants to do business with you.

If you are too pushy, nobody will want to work with you.

Assuming you want to create a positive ROI from paying for meals, keep in mind that it is a numbers game. Out of the 603 meals I paid for last year, only 17 generated any income. That means only 2.8% of my meals converted into a business deal.

Does this mean I will be paying for fewer meals? Probably not. Instead, I’ll just be more careful when selecting restaurants and try to avoid $5,000 bills.

Are you going to start paying for meals?

Comments

  1. Neil,

    I really enjoy these case study posts and I have tried to implement some of my own. My question is, is taking clients out to eat an easier way to close a sale?

    • Steve Estimable :

      Jake, great question, waiting to see Neil perspective!

      • I think in conjunction with providing value and showing that you are competent to solve their problems and close gaps in their business needs it’s a good strategy.

      • I don’t take my client for lunch or send them seasonal gifts for closing sale, generally not when it is first deal… when it is repeat client and changes are that relationship can go long term… i invite them for lunch for knowing them better or just open up.. sending them seasonal gifts is also good idea.. closing the sale can be done over coffee shop too.. and that also when you are willing to go extra mile…

  2. Palash Kumar Daw :

    In previous we knew about your ROI from Life Style cost and today about your Food Management. Really enjoying with you 🙂

  3. Really great breakdown of your costs! My favorite part: “It didn’t help a ton, but it did bring in an extra $187,000 in revenue.” This really shows the scale of everything you are doing!

    • Lisa, thanks for the feedback — I truly believe if you measure everything you can fully optimize your personal and business life.

  4. Fun post Neil! All I can say is that food is everyone’s love language. If you want to show something you care, make them bacon, take them out to lunch, we ALL love free food! And this might sound insane (c’mon Neil, you know we’re crazy) but when I have a repairman come to my house, and I give him dinner ~ just something I’d make a good stir-fry or whatever, the bill is ALWAYS cheaper, I mean by hundreds of dollars. One guy charge me $16 an hour to install windows (I fed him breakfast, lunch and dinner) compared to $50 that he charged my B-I-L …his typically rate. The boiler man, same thing, fed him and the bill was $200 less than the estimate. My point, we all love food, especially free. Like you said, doens’t need to be a high end restaurant either. So let them eat cake!

    • Laura, great point. It’s the purest form of hospitality and it shows that you care — I try to feed people because it’s a natural human thing to do.

  5. Hi Neil,
    I enjoy your posts Being a classified site owner I conduct meetings with business men and Pay the fuel and food expenses. this really pays off in the end. Makes them a long time customer.

  6. Xavier Major :

    I pay for my clients meals all the time at salesfunnellab.com because not only does it create a more personal connection it creates loyalty which turns into lifetime value so why not pay for meals.

  7. Steve Estimable :

    Neil, out of the box and interesting post!

    I never thought about measuring meals but reading more and more of your blog post i will try to log as much of my actions like the super post case study you did on your clothes.

    This one: https://www.quicksprout.com/2014/12/10/how-spending-162301-42-on-clothes-made-me-692500/

    Q:Are you going to start paying for meals?
    A: Yes, will try!

    Have a wonderful day!

  8. Naresh Reddy :

    Neil, it’s really interesting & funny toooo.

  9. manish Kumar :

    Oh wow 🙂 food also gives money 🙂 awesome big bro

  10. No, I’m not going to start paying for meals, because I never stopped. My writing team and I used to have a regularly scheduled weekly meeting at Outback Steakhouse. We did that for years.

    I also used to buy at least one of my writers lunch at least once a week. Any chance to turn a meal into a business meeting is a good idea. It’s also tax-deductible, but you have to keep records of who you ate with and what business items you discussed.

    The same thought process applies to business-related travel, especially to conferences. I made a lot of money as an affiliate. The interactions I had with other affiliate webmasters and the programs themselves paid for my travel expenses many times over.

    Nice post, Neil.

    • Randy, glad you liked it. It’s the little things that show you value their help and hard work. I try to show my appreciation as often as I can. Sounds like you know what to do already — keep it up 🙂

  11. Kevin Knecht :

    What great perspective, Neil!!! The first thought I had when seeing the headline …

    “Wow! Melissa and I deserve to have a lot more business lunches and dinners in 2015!” 🙂

    Thank you for showing us the path to “scaling!” …

    With blogging …

    And generating an effortless income!

  12. Neil,
    When you say “sales floor” is that referring to a call center? Any recommendations for one? You should probably move to Utah because the food is cheaper here too.

    Don’t you love what doing taxes reveals? Still, sounds like it was worth it. Also, a percent of that is a tax write up.

    A lot of entrepreneurs complain that people take them to lunch or dinner to get free advice, but in your case, you’re really investing. If you ever come to Utah, I’d love to get dinner and I’ll invite some of my entrepreneur friends.

    Blog on
    Janet

    • Janet, yep you are right on the spot with the sales floor. If I am ever in Utah I’ll definitely have to take you up on that offer. Let me know if there is anything specific I can help you with.

      • Another great Article. It’ll give a cheerier perspective when looking at all the food charges on my credit card! Can you share a few recommendations for sales floors in Utah?

  13. Neil,
    You forgot one other thing (though less important than the personal connections meals provide). Meals for business purposes are a tax write off. 50% of the value of each business meal can be listed as a business expense, reducing your tax liability. So, in effect, you saved even more than you mentioned above.
    -rm

  14. I have long ascribed to this principle, and I have never regretted buying a meal or coffee for a client, potential client, or other entrepreneur.

    Thanks,
    Vi

  15. Jordan @ Experimarketing :

    Hi Neil, I like how you always look at the ROI of the bigger picture.. clothing, meals, etc.. It makes for interesting reading! These “intangibles” can make a difference, and it is nice to see some numbers put to it!

  16. WOW NICE ARTICLE

  17. I like your case studies.

    Have a great day!

  18. Nirpendra Patel :

    nice talked about how business relationship can be developed with such meals , and you forgot to tell few meals gonna pay in future too.

    Though i guess it is shortest article over quicksprout .. lol

  19. “Coworkers and employees – always pay for their meals because they work extremely hard for you.” I have instant respect for anyone who thinks like this.

    The measurable ROI might have been 2.8%, but I’m sure your coworkers work even harder after being treated nice like that, resulting in even more money for your businesses.

    • Dusan, thanks for the support. It’s a reciprocal thing. They work hard – I treat them – Business does well – We all do well. Looking forward to hearing much more from you.

  20. Randy Kauffman :

    A fun post. I was treated to one of the fine dining experiences in Chicago several years ago. It’s a night I will never forget. Limo service, wine, food. $3,500 bill. Not paid by me! It was great!

  21. Don Sturgill :

    Neil … when you get a chance to visit Bend, Oregon, let me take you out to eat 🙂

  22. Akshit Wadhwa :

    Hey Neil,

    Your all the articles are amazing as I read all your articles and also do a comment in everyone. I have a problem in this article You have spend $138,491 by which you made $992,000. It is good but as We don’t have this much money now so from where we can start. I’m waiting for a article by which we can make money online.

    -Akshit Wadhwa

    • Akshit, you don’t need to spend that much — just make sure that you are getting an ROI and treating your top valued employees out. It really goes a long way!

  23. Hi Neil,

    Great post! I was wondering if you could share information on the Utah sales floors you mentioned. We’ve been looking for a company to handle some of that stuff for us. Any input would be much appreciated!

  24. Great share Neil. I like your transparency and got a kick out of your 2.8% meals paid for to revenue. Now that is knowing your #s

  25. Anil Agarwal :

    Fantastic stuff from you again Neil!

    As you said, ROI from meals take time and you should also be careful which restaurants to go for as going to costly restaurants only return a bad ROI if you’ve a bad meeting.

    Retweeted the stuff.

    • Anil, great point. One should always be mindful of the types of restaurants and the price of meals if you are looking for positive ROI. Thanks for the feedback.

  26. Awesome…. I’ll buy you dinner anytime you’re in LA 🙂

  27. Does this mean, my next meal with you is on you Neil? 😉

    Anyways, i love your articles. Sharing. Hell yeah.

  28. Swadhin Agrawal :

    Hi Neil, I don’t know why my comments don’t get approved. Anyways,
    let me agree this was a great stuff from you again on how branding an help you get more leads.
    One question I want you to answer is can we use this at small scales like a freelance writer like me taking out some potential clients for lunch and locking a deal?

    Do reply if this comment is lucky to see the light of your approved comments 🙂

    • Swadhin, you may have written something that alerted the spam filter or inserted a link that did it. I think you can always take people out for meals — regardless of your standing. It’s just a great networking move.

      • Swadhin Agrawal :

        Aww thanks Neil for answering. I know I must have done something dumb. Anyways thanks for the reply.
        I think taking friends and clients out on lunch is a great move. The time spent and equation shared will be much more valuable. Thanks for sharing such wonderful posts Neil 🙂

  29. great neil, thanks this inspiring me

  30. Hey Neil,
    Very inspire for me.
    Thanks for write.

  31. Neil,

    What are few companies out of Utah that you would recommend to hire for making sales? I’d love to know.

  32. Thanks for sharing Neil. This is all an exercise in relationship building, ROI notwithstanding. My experience has been similar, albeit on a smaller scale. Generosity invites reciprocity.

    The one thing I might add is that there’s also value in offering to pay, and then accepting when the other party insists, regardless of who proposed the meeting. It’s a gesture of appreciation on their part.

  33. Situs Togel Resmi love to read your article. I hope I can still continue reading your next article. hopefully your website growing. good luck always for you and your website. thank you for sharing this information

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