August 2020 Profit Report: We ALREADY Hit Our 2020 Revenue Goal
Episode 472: Show Notes
Can you believe it’s already time for another profit report? Literally, before we hopped on to record this show we were like what happened last month, what month was even last month? We couldn’t have told you! There has been a lot going on, and it’s not so much business – it’s like, life is crazy right now and we are keeping it together but hanging on by a thread. It’s a lot!
Listen on your favorite podcast player
But August went so well despite what typically happens, which is sometimes a hot mess. And we definitely want to get into all the data around that, but one thing we did, as most of you would have, was throw out our 2020 plan. We didn’t even have one and just have been taking every month at a time. We expected we would have a dip in August, and then when we got on here, we were like, ‘Oh my gosh.’
How Well We Did This August, Achieving Consistent Growth By Serving Our Audience
August is traditionally a down month compared to the rest of the quarter, and we felt like our August was going to be no different while it was happening. And then, we realized that growth was 1.7 times higher this August than last, and we also grew more than we did in July! We have seen more consistent growth this year than any other year! Launches can be a struggle financially and mentally, and they can crash so badly, so our main goal after launching the shop was just consistent growth, plain and simple. We really leaned into this new model and it feels so good to see that it’s working out. One of our biggest fears going into COVID was having to lay staff off, and historically we always cut our own salaries first, so to experience this growth while so many businesses suffered just felt like a blessing, as corny as that sounds. We really think it is just a testimony to how well we are serving our customers, giving people like you tools to grow your business!
Why We Decided To Sell The Shop Using A Webinar
One of the amazing things we did, which made us feel so good, was recording another live version of the Launch Simply Webinar, just because the last one had such huge tech issues. Even still, the webinar with the tech issues generated our highest conversions so far, but get this, the one we just did doubled that! We converted over 24% of our viewers, which now that we are starting to get bigger groups to listen, is just insane. So our goal with re-recording it was to give you a better experience, but also see what an evergreen funnel would look like to our membership product. We have never had a webinar associated with such a low priced product. It took us seven months to get a webinar together for the shop, versus our previous products which always had webinars ready to go by the time they launched. We didn’t go the webinar route for the shop because everything we have sold through webinars before ranged in price from $300 up to $2000 and over! So, for a $47 membership, we wanted to try a different strategy, but then thought, what if we try a webinar? And the success we have seen is testimony to going back to doing the things you love and that worked. We hesitated at first because we didn’t want a sales mechanism that made us the reason people bought something, we wanted the shop to be the reason people joined! But the webinar has been doing so well and this one in particular presents so many opportunities to be leveraged in different ways. We could train someone to run them for us, use it as an affiliate program to teach to other people’s audiences, and more. At every step we have tried to treat the shop more like a SaaS product than a membership and if you look at other SaaS companies, no founders run their webinars. So while we love running it, the horizon is super exciting, but we don’t want to get ahead of ourselves!
New Challenges That Come with Growing – Churn and Advertising Costs
We planned so little this year, and it’s turning out to have served us well. The business is growing, baseline revenue is growing, and MRR is growing! While all of this is great we do see the need for some problem solving on the horizon though because we have never had MRR this high before, and this comes with challenges – churn being a major one. We are currently experiencing churn which is too close to growth and while that is totally normal for a product like this and a business this size, we would like to see more growth. Many people are fine to maintain a similar revenue over time but that is not our style. It would make sense for higher-end firms to want to cap out at a certain amount but for this product, it is silly to only want a certain amount of members – let’s rather create systems that will allow us to acquire more! So as it grows we will need more support and we are already thinking about new roles for people and whether they will be able to take them on. Emylee makes the point that a business is here to teach us lessons and while experiencing stagnation would have upset her in the past, now she is looking at it as a signal to create better systems so growth can take place again. If Abagail has learned anything over the past five years, it is that there are patterns but things are also unpredictable. While the shop is eight months old and there is that much worth of reporting and analytics, for a product that has the potential to become a multi-million dollar business, it’s still basically in its infancy phase. Part of the reason for the stabilization is also just the sheer cost and competition of advertising at the moment. It’s holiday season and people are also being bombarded with political campaigns on Facebook and Instagram, so the cost of keeping up with this surge in messaging is not insignificant!
Total Monthly Revenue for The Shop, Strategy Academy, and Trello
For the last few months, the shop has been sitting at around 50% and for this month it went all the way up to 57%! The shop didn’t even exist until mid-January and now it makes up 57% of our revenue! That is hard to grasp. Last year this time we were working through so much, there was so much uncertainty and at times we wondered whether we should wrap it all up, but we didn’t and that is testimony to what is possible if you are dealt a bad hand but you just decide to work through it. Looking back, one of the things Emylee will be most proud of is how good at pivoting she and Abagail are. This is the end of our fifth year in this industry and with all the challenges and activity, it feels like it's been ten! But Abagail has reached a new point in her maturity since starting in her mid-20s – she sits back and lets things flow now and realizes that you don’t have to grind to make amazing things happen. As for the Strategy Academy, it’s still our signature program. After a bad launch, we had to turn off a funnel that was making the majority of our income but now it's on again and payments are stacking. So all in all, SA brought in 22% of our revenue for August, which is down but only because the shop is growing and it is staying the same. Last month we updated our webinar for our signature program though, which you can watch here. Trello is still awesome and while we have thought about doing some new things with it, it continues to generate hot leads that love their results, and for that we are proud. We hit 13% with Trello for August!
Expenses: Cost of Goods Sold, Advertising, Contractors, and Raises
On the expenses side, there were not too many shifts. With these profit reports, we always aim to keep the cost of goods sold around 30% and advertising between 20 and 25%. This month for the cost of goods sold we hit 31% and advertising was at 26%. The remaining amount for the cost of goods sold is taken up by fees for Stripe and PayPal, and physical products like mugs and shirts which need to be shipped. As for contractors, our goal is for them to make up 20% of expenses. Some say 30% but it depends on the size of your team. In August we did do a photoshoot though so our figure jumped to 24%. By the way, you can listen to a past episode we did where we cover everything you need to know about how to do a brand photoshoot that you can listen to here. Some other once-off costs came in the form of computer maintenance – our equipment is getting old! We slimmed our team down a lot this year, so we are in a comfortable place, but next month we are hiring. We have worked it out to not cost us anything extra though. We also gave ourselves raises (approved by our bookkeeper)! It’s always good to get an outside perspective on these things, especially if maths is not your strong suit!
Profit for August – We Already Hit Our 2020 Revenue Goal!
It’s time for the number you have all been waiting for – profit! So, profit is at 22%, and while our goal was 30%, we feel fine about this because we reinvested some of it into this month’s one-off expenses – the photoshoot and computer maintenance. So we took the difference and reinvested it into our business, which is totally fine. The part we can’t grasp though is that to date, we have made what we made in all of 2019 combined, and 30% of that is profit! We were nowhere near to 30% profit last year, not even close. Our goal this year was just to make the same but increase our profit margin so to have met that goal feels so good. And there is still a lot of runway left for the year – we still have the rest of Q4 to go which historically is our best quarter. The fact is we are just darn proud of ourselves and this calls for a celebration. We usually suck at celebrating but this time we are going to go out to a fine restaurant and treat ourselves so keep an eye out for that! Congrats to us for our growth on a historically down month and lets hit Q4 out of the park!
Quote This
And there is still a lot of runway left for the year – we still have the rest of Q4 to go which historically is our best quarter.
Highlights
Achieving Consistent Growth By Serving Our Audience – How Good August Was. [0:05:04.1]
Why We Decided To Sell The Shop Using A Webinar. [0:07:59.1]
New Challenges That Come with Growing – Churn and Advertising Costs. [0:15:16.1]
Total Monthly Revenue for The Shop, Strategy Academy, and Trello. [0:25:20.1]
Expenses: Cost of Goods Sold, Advertising, Contractors, and Raises! [0:31:25.1]
Profit for August – We Already Hit Our 2020 Revenue Goal! [0:37:57.1]
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
Profit, Revenue, Goals, Creative Template Shop, Strategy Academy, Trello For Business, Webinars
