December Profit Report: When It’s Helpful to NOT Launch
Episode 403: Show Notes
You may have wondered what kind of revenue our business made over the holiday season, so today we’re giving you all the details about December. So, even though we’re properly settled into 2020 by now, let’s just backtrack a little to the end of 2019 – because there’s still something we can learn there. During this past December, we took time off for family and enjoying the holidays, but we also prepared ourselves for a big launch in January. We recognized making a big profit was not on the cards for this month as we had other plates spinning and purposefully decided to focus on our long-term vision.
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Sometimes it’s okay not to have profit as your biggest priority each month because as your business evolves, different things are required at different times. Sometimes you have to do the groundwork for what is to come and sacrifice the quick short-term cash and by listening to this episode, you will hear that this was what December looked like for us. Still, we talk about the outstanding performance of our Trello for Business course, why we expected a decline in profit from Strategy Academy, how we’ve rediscovered the power of strategic emails, and a whole lot more!
Eyes on the Prize: Focusing Our Attention on the January Launch
During December, a great deal of our energy went into preparing for the launch in January. All our promotions and advertising activities were on autopilot – we weren’t actively promoting anything. In fact, we haven’t actively promoted for about seven weeks, since we also had a summit in November and then a Black Friday deal. Deciding when and how frequently to promote is a tricky thing to do because you have to balance it out with providing value and keeping your audience interested. You should not push sales all the time; there are seasons where providing value and investing in your audience is more important.
The Surprising Thing That Happened to Our $29 Product
For those who are new, we have a $29 course called Trello for Business that’s been available since 2017. The course is all about teaching you to use and optimize the Trello project management tool. We’ve been fighting to keep the price this low for a very specific reason – it’s part of a bigger picture and it drives our audience to our other bigger courses and products. In December, it brought in a whopping 47% of our revenue! This goes to show that something really small – when used correctly – can have a gigantic impact. But there is a caveat to this: always consider that with a low-priced product like this, you will need a ton of people to buy it to make it profitable. It also only works in very few scenarios, so don’t go dropping your prices without considering all the variables.
What We Expected From Our Signature Program and Affiliates
Our signature program Strategy Academy took a bit of a dip this month, but for all the expected reasons. We made a strategic decision to change our six-month payment plan to a twelve-month payment plan and in the interim turned off our funnel for four months. What happened was, we hit a point where people were finished paying, but because we turned off the funnel for the summer, no one else was paying us anything. Around October we turned it back on, and since then, we have been working on building back the number of people currently in payment plans. By the way, if you are going to go down the passive income course route, we recommend payment plans rather than memberships. So, our profit for Strategy academy dropped from 39% to 24%. Our third biggest source of income for the month was affiliates. This includes a variety of software and services that we use in our business and with who we partner in different ways. This brings in a nice stash of cash each month. What we want you to see is that all businesses have slow months, and sometimes they are even planned out this way. Strategic slow months are much better than being caught off guard. All businesses experience ups and downs.
The Low-Down on Our December Expenses
In terms of our expenses, things worked out pretty much how we expected. Just a quick reminder, we include advertising in the costs of goods sold because if you think about it, it is money you have already spent. Other costs of goods sold include merchant fees and the cost to make or manufacture your product. Our expenses are still higher than we would like, at 53%, yet far better than the previous month when we stood at 78%. The advertising is sitting at 46%, and we’d like it to go down to 30%. We’ve already made the cuts we felt were necessary, so now we’re trusting to increase revenue rather than cutting down more expenses. As a side note, we want to remind you about the impact strategic emails to your email list can have. With our Sunday emails, we’ve seen an increase in the opening rates of those emails, which means people are interested in our content. It’s important to keep growing your email lists because those people who have been on there forever and most likely not paying attention. It’s human nature to lose interest over time, so you’ve got to make sure that you get your content in front of new people who are excited about what you do and ready to invest.
What We Spent on Contractors and Payroll
After all of that, our cost of goods sold was still in the normal range. The percentage we pay to contractors also got back to normal following our delayed payment blunder the previous month! It came to 33% and we reckon we’d be around here for a while – and we’re comfortable with that. This percentage might drop a bit as our revenue grows. Our third biggest “expense” was paying ourselves, so payroll made up 14% of our total revenue spent. Our December profit report will hopefully show you that it’s okay to not have money as your top priority each month. Breaking even is not the worst thing in the world, and that’s exactly what we did. Do us a solid and tell people about that Trello course, and go see what we worked on during December at http://creativetemplateshop.com!
Quote This
The goal is for you to understand in a better way to review where you have been so you can make better decisions for where you are going.
Highlights
Eyes on the Prize: Focusing Our Attention on the January Launch. [0:05:37.1]
The Surprising Thing That Happened to Our $29 Product. [0:08:03.1]
What We Expected From Our Signature Program and Affiliates. [0:12:46.1]
The Low-Down on Our December Expenses. [0:21:05.1]
What We Spent on Contractors and Payroll. [0:31:00.1]
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
Opt-ins, Resources, Audience, Email lists, Dubsado, Creative Template Shop
