2020 Recap – Massive Growth with 32% Profit Margins
Episode 494: Show Notes
How are we able to talk about the end of 2020 already? We don’t know because this has been the fastest, craziest year in life and business for us in a while. For a while, it felt like we were having the longest months, and then things just seemed to speed up. We think a lot of people have had a similar experience. We don’t know if it was because people were home and things didn’t feel like they were changing and then suddenly it was fall and then winter. And now Christmas is around the corner! How are we at this point in the year already?
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So today we want to talk about 2020 specifically and what happened in our businesses. If you look at all the goals we set for 2020, how did things ultimately shape up? We will tell you, we don’t know if there were guardian angels above us but there were a few things we did really differently in Q1 that ultimately set us up for huge success, and in today’s show you will hear all about it!
Dealing with Complex Feelings If Your 2020 Has Been a Great Year
So many people have just seemed so stressed about how their businesses have gone this year, but it’s been our best year ever! We don’t feel guilty about this though. If anything, if we have negative feelings about this, it would be more accurate to class them as feelings of shame. It’s important to know the difference between guilt and shame. If you think you are feeling guilt but can’t find anybody to apologize to so the feeling goes away, then you could be confusing guilt for shame! Shame is a difficult emotion to deal with but the good news is at least there is nothing to apologize for! We just wrapped up Black Friday and so many of our friends – us included – were shocked about how well it all ended up going. Many people are struggling though and there is a feeling of ‘how dare you feel happy’ due to this, but we want to tell you that you don't have to start finding negatives to justify your positives if you have them!
2020 Strategy Adjustments: Spending Time on What Gets the Best Results
As we said before, there were a lot of things we decided to do differently in 2020. In previous years, we would sift through our records for one year and use them to plan the next. This planning stage was incredibly meticulous and granular. We would set goals, break those into tasks, assign due dates, and even lay these tasks out for whole quarters in advance. We would then stick to this plan and never divert from it. This method helped for a long time but the inflexibility of it began to frustrate us because it didn’t allow for any leeway to cope with the unexpected. So we wanted to mix this up for 2020 and came up with a new approach. For our 2020 strategy, we started with our budget, and with how much money our various products were generating. We came up with a three-star system where we would assign each of our products a star rating based on the amount of income they generated for us. Using this star system, we decided how much time and effort each product was worth. So rather than make big changes, we decided to drill down on what was going well and simplify a lot on the way too. This of course meant focusing on less and cutting certain projects out completely. But bear in mind we also launched a brand new product – the shop. Emylee was against launching the shop for the longest time because she knew how much effort launches involve, but our strategy of cutting things out gave us the time we needed to launch the shop in the way it deserved. Something we cut out was our summit, which people thought we were crazy to leave by the wayside. The problem with the summits was that the time and effort they took did not justify the revenue they brought in. They also made our revenue flow unstable. We prefer boring, stable income – income that is cushy like a dad bod! Making money is good but you need to constantly be evaluating efforts versus results!
How We Went About Setting Our Goals For 2020
So what were our goals for 2020 and how did we go about setting them? As we said previously, our goal was to bring in healthy, consistent profits, and we decided we wanted to average 30% profit for 2020. We were not focusing on revenue but rather profit – these are two very different things. Strategy Academy, Trello, and the shop were the products we decided to keep (sponsorships also bring in income but are in a different class to the other three) and we looked at what percentage of the overall profit goal each of these were bringing in. We had to constantly reassess where to put our time and effort in each month. It is easy to get emotional and attached to products but our new time versus money system helped us be more strategic in this regard. Our previous mentality was that if a product was not performing, we needed to fix it to reach our goal, but this year we focused more on the things that were performing instead of the things that weren’t. The risk here is that sometimes things get traction fleetingly but then fizzle out. We did have several years of data though so we knew roughly how each product was performing long-term. Only one product was an estimate – the shop – but our plan with it was that it had to at least perform as well as the product it was replacing. So, to sum up, we looked at the average income each of our products generated historically, what that translated to in real dollars, and from that, we assigned the three-star system. Once we had established what needed our time and attention, then we went through and set those quarterly goals, but this was the first step instead of doing an overall revenue goal.
The Staggering Results Our Businesses Generated in 2020
Let's talk about results! We don’t know where to start because so many good things happened to us in 2020. Things like the fact that our business grew by 40%, 15% more than what we set our goal to be! But wait, there is more: We set our profit goal at 20% but did so well that our profit for 2020 was 32%! In 2019, stress levels were high. We drained a lot of our cash after a launch and spent a lot of time catching up, and because we believe in paying ourselves we ended up with our first loss ever. Abagail’s husband also left his career. So to go from a loss in 2019 to 32% profit in 2020 makes us feel so good. We are so thankful that 2019’s business didn’t happen in 2020, although March and April of this year were tough. To have had 40% growth in a year when stabilization was our goal is just crazy, and this was due to leaning into what was working! By the end of Q1, we had only met one of our goals for how much each of our four income streams should make. We decided to replace Goal Crusher Club with the Creative Template Shop, and what is crazy is this is one of the products that didn’t meet its goal. But it didn’t meet its goal because it 4Xed it! Then it doubled again by the end of the year! Abagail talks about a memory she had where she sat down with Emylee five years ago and described where she wanted to be in the future. She explains that so much of what she wanted is happening now. We can always reach further heights of success but one of the things our hosts have realized is the importance of being content. You can be ambitious and content at the same time.
Focusing on Overall Success Rather than Individual Goals Not Met
To wrap up, we want to focus on two more stats we pulled from the year because we thought they were really interesting. One of our goals was to increase the lifetime value of our students, and we did this by having an upsell on our most popular program ever. So when a customer signs up for Trello, they get taken to a thank you page where they are offered an add-on. This add-on is our Business on Autopilot product and it’s offered for only 11 dollars. If you aren’t familiar with conversion metrics deemed successful, the average rate is 2-3%. In our upsell, we generated 30% conversion! This was such a simple upsell but it worked so well. As far as the second statistic, we know that what leads to results is paying attention to what is bringing in revenue – understanding what your clients and customers are spending. To this end, we set a goal to bring in 5000 new students this year. We only hit 50% of that number but the fact is that we managed to 3X the lifetime value of each! The big lesson here is that you need to look at how your business is performing overall. Don’t get caught up in the nitty-gritty of what projects did not work. Some of our products did not reach their goals, but others 3Xed and 4Xed theirs, which all have culminated in 40% growth and 33% profit! So we encourage you to reflect on what worked for you in 2020! Good luck and see you next time!
Quote This
We prefer boring, stable income – income that is cushy like a dad bod!
Highlights
Dealing with Complex Feelings If Your 2020 Has Been a Great Year. [0:03:21.1]
2020 Strategy Adjustments: Spending Time on What Gets the Best Results. [0:08:53.1]
How We Went About Setting Our Goals For 2020. [0:17:58.1]
The Staggering Results Our Businesses Generated in 2020. [0:28:51.1]
Focusing on Overall Success Rather than Individual Goals Not Met. [0:42:29.1]
ON TODAY’S SHOW
Abagail & Emylee
The Strategy Hour Podcast
We help overwhelmed and creative entrepreneurs break down their Oprah-sized dreams to create a functioning command center to tame the chaos of their business. Basically, we think you’re totally bomb diggity, we’re about to uplevel the shiz out of your business.
KEY TOPICS
2020, Strategy Adjustments, Launching a New Product, Time Versus Money, Gratitude, Success, Growth Statistics, Creative Template Shop, Profit
