February Profit Report: We Nearly Reached Our Goal Profit!
Episode 424: Show Notes
It feels like it’s been 87 months since February, both in business and life, but we are going back in time to revisit that month and stay consistent with our profit reports. We’ve heard that these episodes are super helpful to you. For those who are unfamiliar with profit reports, we started them in August of 2019, sharing not income reports but profit reports, including the exact percentages of gains, losses, and so on. Our goal is to chase higher profit margins and we share what that looks like for us and the processes we go through to get there. These episodes give you a peek into our business, which will hopefully encourage and help you in setting up your strategies without any comparisons.
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Today we talk about how we used the Five Days to Launch challenge to feed Strategy Academy, why we’re okay with Trello for Business breaking even, how The Creative Template Shop blew our socks off, and why we are permitting you to pivot a little right now! Intending to double down on this learning experience, we will also be hosting a live workshop to practically guide you to implement the same things in your business. Stay tuned till the end to hear where to go to learn more about crunching the numbers!
A Few Things To Know About February 2020
Before we jump in, there are some things you need to know. In February we had just launched The Creative Template Shop, so the hype was up, things were still rolling, and we announced a surprise drop at the end of January which boosted sales at the beginning of February. We also did a few promotions for the shop. In the first week of February we started promoting our famous Five Days to Launch Challenge, in the second we did a shop drop, in the third we hosted the challenge live, and in the fourth week, we opened the doors to our signature program Strategy Academy. So, February was a big, busy month! We were trying to find a consistent routine with what a shop drop should look like (we’re still new at this), what’s needed within our team, what systems are still needing to be built, how can we support our members and build excitement, and then we brought back a challenge in collaboration with Dubsado. The fact that February was so busy has been to our great benefit, especially in light of the season we are currently in. Historically, we have always had Q1 as a slow quarter, but this year we intentionally worked at not repeating history and wanted to start out on a strong foot. This gets your mindset fired up for the rest of the year. We are also thrilled that we launched the shop when we did before the COVID-19 outbreak and also rolled out Strategy Academy again because selling a $2000 course in the middle of all the craziness is going to be tough!
How We Tweaked the Challenge to Feed Strategy Academy
Strategy Academy was our primary launch in February and on top of that, we are doing a shop drop every month at predictable times. But when we are launching something in addition to the shop drop, this item (like our signature program) will get a bit more attention and the shop drop will be slightly more subtle. For those who don’t know, she shop drop pertains to our Creative Template Shop, a template and graphics library for you to use in your business, and the monthly shop drop refers to the four new templates we release the second Tuesday of every month. Our signature program, Strategy Academy, is the meat and potatoes of our business, a course that teaches you how to turn your creative passion into a full-time income. So, we had the Strategy Academy launch planned but we decided to bring back the challenge before the launch. The first time we did the challenge, it fed our Strategy Academy launch super well. In the second year, we shot ourselves in the foot by changing the format slightly, so we did poorly in that launch. So, when we tried it again this year, we identified what went wrong the second time. The first thing we changed was to find a way for most people to join the live workshop attached to the challenge, which again introduces them to our Strategy Academy program. After making the necessary tweaks to the challenge, the Strategy Academy launch did really well – delivering 40% of our total revenue. But, because we have payment plans, all that money did not come in at once but is spread across several months. So, we will see money flowing in from this launch for a while.
Loving Break-Even Leads and Creative Template Shop Surprises
Our second-biggest profit stream this month is no surprise: it’s our Trello for Business course which brought in a good 23%. This is our most popular program; we have had over 7000 students. It is a low-priced product ($29) that has served us faithfully but because people’s purchasing behavior has been so erratic lately, it will be interesting to see how that affects Trello in March. When we look at the cost of goods sold, Trello breaks about even, which might have you asking why we bother. But you will not believe how this course feeds our Strategy Academy course! The conversion rates from the one to the other is just bananas, so it’s been a faithful hook. What surprised us about The Creative Template Shop is the membership really took off but also the individual sales of products. The membership made up 17% of our total income in February while the one-off sales brought in 15%. The Shop thus made up a whopping 32% of our total profit, and that within the first six weeks of launching. It’s still too early to say what the growth rate will settle on once the newness wears off a bit, but we’re excited about the results thus far!
It’s Okay To Adjust A Little Right Now
In December, we made a promise to each other that we would stick to our three products. Now, we understand no one knows what the world is going to be like following this crisis, but here is some good advice: while it is best to keep focused on a few things under normal circumstances, we need to be more flexible with our “rules” for the time being as we need to come up with new ways to make money. The pandemic has had a host of unexpected consequences, and so we need to think out of the box to keep that money coming in now that some of our other income streams are shut down. So, do expect to see us do things outside of our main three products.
Our Expenses and Close-to-Goal Profit
In terms of our expenses, we feel like we are getting into a rhythm. Our cost of goods sold remained steady. Our advertising expenses went up slightly from 25% to 33% but considering that it was a launch month, we feel happy with that. Our aim is 30%. Our total cost of goods sold is 38%, up from 27%. This is also due to some changes that our merchants are making. Stripe, for example, is now keeping their percentage even if a student is refunded, so we make a loss in that situation. Our percentage for contractors is up slightly, and we expect this number to climb in March since we will then be paying commission for our shop sales. Our payroll was 10%. This all gets us to a total profit of 27% which we are thrilled by as our goal is 30%! This is a happy number considering we are still busy growing the membership of the shop and the payment plan money from Strategy Academy will also continue to trickle in. We are so thankful that we are embracing payment plans and MRR (monthly recurring revenue) rather than simply relying on launches, otherwise we might have been panicking in the COVID-19 crisis.
Go Grab Your Business Horoscope!
If you are listening to this before April 21st, you can attend the free version of this. If it’s after, you can still go watch the previously recorded version’s workshop. For those who have been around for a while, you might be familiar with a program we created to make math sexy again, called Your Business Horoscope. We originally bundled it together as a live workshop where we were teaching you literal math that helps you make better decisions in your business. We taught it as a live version, not only giving you the strategy and how-to, but we also give you an amazing Excel spreadsheet that Abagail puts together, things like profits and loss statements, calculating your expenses and profits, finding the value of your subscribers. So, if you head to creativetemplateshop.com, go to New Releases and check your business horoscope there. It’s $97 to buy it as a one-off, so becoming a member makes more sense at $47, and if you are already a member, just grab it!
Quote This
While it is best to stay focused on a few things under normal circumstances, we need to be more flexible with our 'rules' during this time and come up with new ways to make money.
Highlights
A Few Things To Know About February 2020. [0:04:05.1]
How We Tweaked the Challenge to Feed Strategy Academy. [0:08:55.1]
Loving Break-Even Leads and Creative Template Shop Surprises. [0:20:00.1]
It’s Okay To Adjust A Little Right Now. [0:30:26.1]
Our Expenses and Close-to-Goal Profit. [0:31:59.1]
Go Grab Your Business Horoscope! [0:38:07.1]
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, Expenses, Adjusting, Five Days to Launch, Strategy Academy, Trello for Business, The Creative Template Shop, Your Business Horoscope
