Income goals don’t matter..Here’s 1 thing that does
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Welcome to the Profit Series #2 of 4.
This is a 4 part free email course on creating more money + more profit in your business. Learn how to not only allow more money into your business but also create more profit, pay yourself a lot more, and feel really freaking good about money.
I’ll address the 4 part process I took to taking empowered control of my finances which lead me to:
creating more money in my business (without having to increase my audience size)
finally creating a mapped out plan of how much money my business and my personal life needed to survive
break the client payment to client payment cycle
raise my rates by $8,000 and book more clients
create over $12,000 in profit in my business
pay off $18,000 in debt
Want all 4 parts delivered free to your inbox with extra bonuses like videos + PDF’s not on the blog?
This is called the profit series, what kind of terrible human would I be if I didn’t address PROFIT in THE FREAKING PROFIT SERIES!
Okay so before we dive into this topic let’s talk about not profit shaming yourself.
A business does take time to make profit, it’s totally normal for a business to not make a profit for YEARS.
Victoria Beckham’s company hasn’t made a profit in 12 years: but that doesn’t mean she’s a terrible business woman, this might be strategically done to lower her and her husbands taxes, who knows!
[ Read more about her profit here ]
But if you’re here, you’re here because you want to make a profit.
Let’s break down what net profit is and what it means for a business:
Now this is what I used to follow to calculate my net profit and most of the time, my salary wasn’t included in my expenses! My business had turned into this money hungry machine that wasn’t even paying me but it was paying other people or investing back into itself.
One day I became really curious about how to create more net profit in my business and pay myself. I wondered why I hadn’t made it to the point where my business could pay me and I decided that in 2018 I was determined to pay myself a decent normal salary AND create profit.
I started with this book:
If you haven’t read profit first you need to get your hands on it ASAP.
[ GET THE AUDIO BOOK FREE WITH AN AUDIBLE TRIAL HERE ]
Like Mike says on the cover our businesses can turn into these money hungry machines that eat up all of our profit and for me it was also eating up a salary to pay myself!
Maybe you’ve been there, I know I’ve been there, where I let my business take all of my money.
Money would come in and money would go out, on the wing and prayer that some day I would be able to grow it big enough to the point where I got it to pay me a nice salary.
In 2018 I started following this formula from Profit First:
Profit first image here:
Source: https://www.joswillard.com/profit-first
In one year I was able to:
pay myself an average salary (nothing crazy)
pay my taxes on time
and reinvest in my business several times (with contractors, coaching, and education).
But what I didn’t do that year was have really high expenses, my profit margins came first.
Should you be investing in your business?
The ultimate conundrum for when you want to grow but want to keep profit:
I see this conundrum happen a lot and it’s fair!
You might be trying to scale your business, more employees or new machinery or invest in more Facebook ads to grow your audience.
Here’s my OPINION on investing, what I’ve seen work for me and other people.
When to spend more money on things like Facebook ads, virtual assistants, contractors, etc:
1) When you have a model that is working and when you see one part of your business increase it will equal increase in profit + sales.
I see too many people who hire virtual assistants or other contractors thinking this contractor will make your business better. But usually an assistant type of contractor is working FOR YOUR BUSINESS, which means they need procedures, policies, and they need a formula for how to do your business.
They’re not going to tell you what to do, they need you to tell them what to do.
It’s smart to spend money here when you have a system that’s working.
For example: you’ve had the same business model for a year and it’s playing out great.
You have a Facebook ad funnel that converts people into sales and you keep doing that over and over.
Next viable option would be to: increase your Facebook ad spend
OR
You have a growing clientele, you’ve been signing on more clients than you can handle. Is there a part of your process you can hand off to an assistant?
Things like intake forms or follow up for scheduling their client sessions.
My advice would be: to save up the money, that way no matter what risk you take, you’re not getting yourself into a hole.
Put aside a small amount of money each month and when you’re ready, increase the ad spend.
When scaling your expenses doesn’t make sense:
When you have no real formula for how you can get people to convert in your business.
If you’re hoping to spend money to grow your audience with no real tested data driven formula to get people to convert, you’ll find yourself losing money, breaking even.
It’s kinda like when you throw money at something, hoping it will be a quick fix for your business, but you have no clue if it will work at all.
You can test that shit by not spending money, you can test it out organically.
Example: you had a program that you ran live that sold great, now you want to sell that program on evergreen.
You set up a funnel and a Facebook ad.
Now you’re spending money on Facebook ads for a funnel and an evergreen product that’s never been tested before.
To make matters worse: you’re running a campaign to a cold audience, which is harder to convert that a warm audience.
My advice to you: would be to test out the evergreen course + funnel on your current warm audience FIRST.
KEEP YOUR MONEY HONEY.
When to work with a coach, program, or invest in a system when the money isn’t there:
This one isn’t an easy formula I can throw out there because it’s way more psychological than just financial.
Typically you’re at this point when you’re just starting out, you’ve tried to figure things out on your own or DIY this online business thing but it’s just not working and you don’t know why.
There have been times when working with a coach when the money wasn’t there was the best investment I have ever made because it got me into a place of action or fixed my business model or just helped my mindset.
Those things lead me to making more money.
I would say YES to this investment, but start off slow, try memberships, smaller programs, don’t go for courses if you really need mindset support.
From there learn what you can, grow, make your money back and then re-invest.
TIME TO MAXIMIZE!
Maximize profits in your business:
Let’s take a good hard look at what you’re spending.
Let’s cut the fat and keep the good stuff.
This is about Financial simplification: simplifying your business and expenses.
It’s not:
STARVING your business
Don’t cut back on everything because you want to be a penny pincher
OVER INDULGING your business
It’s not spending on everything you think you need to succeed or those someday expenses
This is about your TRUE expenses, the things you need right now to make money.
That’s it.
Step 1: Gather your monthly business expenses
Ohhh you don’t know your monthly expenses?
WELL, WELL, HAVE I GOT SOMETHING FOR YOU:
I have to tell you about this program: YOU NEED A BUDGET.
It’s a super simple easy program that was crucial to getting my business budget into gear and helped me to feel in control of where my money was going.
Here’s a free 34 day trial:
DO IT TODAY! gather all your expenses and put them in your budget!!
Now let’s take a look at your expenses: I want you to gather all of the money you spent last month.
Answer one question for each expense:
Is this the best-easiest solution to the problem it solves?
Do I use this expense right now?
When I did this exercise I found that I was spending about an additional $100 on “someday ill make money from this” expenses.
I’m definitely one of those people who will spend a couple dollars here and a couple dollars there and then I’m shocked when it adds up.
It’s like when you buy a couple things on Amazon and at the end of the month you’re like where did my money go?! I only spent $15!
I found I was spending that miscellaneous money on starting something that made no sense!
I found a lot of “some day expenses”
Someday “I’ll make a course or start a clothing line or go to the gym”
I was spending money on things that:
1) weren’t making me any money right now and wouldn’t be until I actually did the WERK
2) that I would NEVER DO: hello shiny objects!
That’s what I like to call the fat, they’re things that someday we’ll do but it really isn’t making money us now and probably won’t down the line either.
Some expenses that might be someday expenses are subscriptions that you’re hoping someday you’ll use. Hold off on those until you actually have the time and effort to put these things into place.
Step 2) What do you REALLY need right now to make money? Just the basics.
Maybe you even have to ask yourself HOW AM I MAKING MONEY? haha.
What is your big money maker in your business and where is the fat?
Then any expenses related to the fat, shiny object, someday it will make me money type of expenses.. they have to G-O.
In 2018 my biggest money maker was working with clients in a 1:1 package.
There’s a couple things I needed to make that run smoothly:
A way for people to pay me that also did automatic monthly payment plans: Sendowl
I needed a way to meet my clients: Zoom
I needed an easy scheduling system: Acuity
I needed a space or dashboard where I could share documents with them: Asana, Basecamp, or google drive
A course platform that could host all my courses that my clients get free access to: Teachery
Email: Convertkit
I charged $10,000 to work with me for 4 months and my expenses were very minimal = high profit + a salary.
Now in 2020 my biggest money maker are courses.
My expenses look more like:
Course platform: Teachery
Record videos for courses: Zoom
Email: Convertkit
Step 3: Can you use 1 system instead of using 2?
I found a lot of systems are now combining to make it easier for online entrepreneurs:
Some Examples:
Converkit now includes landing pages
Leadpages now makes mini websites
Squarespace now has scheduling and an email platform
Kajabi is a full total system from hosting course to emails to sales pages.
When I went back through my expenses this year I thought about ending my Leadpages subscription and just using Converkit.
But I found that Leadpages was still the easiest and best solution for me for landing pages for right now and decided to keep it.
Is there anything you can currently use to cut the fat?
This was your 2nd lesson on creating more profit in your business.
Biggest takeaways:
Apply the Profit First Formula to your business and throw out the old net profit formula
Decide what investments make sense for your business right now (if any)
Cut down on expenses that are “someday this will make me money” expenses and use only the basic expenses you need to make money NOW
Can you use 1 expense instead of 2?
Listen, if you’ve come to the end of this lesson and you still don’t want to look at your expenses or figure them out or look at your bank account. I GET IT.
It’s so scary sometimes to get honest with ourselves about what is TRULY going on with our bank account and our business, but TRUST ME, if you want to change your financial future, this is your first step.
Your first step of changing your financial future consists of you getting honest with yourself. This is the beginning of your new financial future.
This was Profit Series #2 of 4.
This is a 4 part free email course on creating more money + more profit in your business. Learn how to not only allow more money into your business but also create more profit, pay yourself a lot more, and feel really freaking good about money.
I’ll address the 4 part process I took to taking empowered control of my finances which lead me to:
creating more money in my business (without having to increase my audience size)
finally creating a mapped out plan of how much money my business and my personal life needed to survive
break the client payment to client payment cycle
raise my rates by $8,000 and book more clients
create over $12,000 in profit in my business
pay off $18,000 in debt
Want all 4 parts delivered free to your inbox with extra bonuses like videos + PDF’s not on the blog?
