January Profit Report: 46% Profit on a Historically Low Month
Episode 413: Show Notes
Hey friends! We are back for another profit report. It is time to break down January’s profit, the first profit report of 2020, and we are super excited! If you’re new here and this is the first profit report you’re listening to it might be a little bit different than what you’ve seen floating around online where people do ‘income reports’. We decided last fall to change up the narrative, not only for ourselves and our mentality when we’re talking about business and our own goals but also for the ‘comparisonitis’ that happens. Sometimes when you hear income reports where people list high figures and goals it gets really overwhelming and unattainable, and we can’t really compare that progress or those strategies to our business because we feel like the expectations are so different.
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So, what we have tried to do is share percentages and profit. We have made it a goal to focus more on profit than big, shiny, sexy revenue, and that goal is continuing into 2020. It feels really good too! So, throughout this episode, we’re going to share percentages of products or expenses in our own business so you can begin to see the weight those things bear on us, and can make easier comparisons with your own business too!
Sponsorships, Online Sales, and Exceeding Our January Goal to Break Even
We’ve been hustling hard and this January was a culmination of a lot of work. January is historically a bad month in business so last year in December we made the choice to make our goal breaking even on purpose this January. The outcome ended up being even better than the plan too which felt great, as intended! One way we did it is by remembering that revenue can be created in any way you want. People think that more sold products equals more revenue but this isn’t true. One atypical way we brought more in this January was through sponsorship deals. Instead of putting pressure on the community to buy our products, our sponsors allowed us to create amazing content for free so we could add value to people’s lives. Sponsorships accounted for our highest portion revenue for January and will also be bringing in quarterly chunks of cash we can rely on. The other decision we made was to open our online shop in January which ended up being a huge success too! Having something like an online shop can be a great way of spreading out income to a month-to-month arrangement so you aren’t just waiting for that quarterly sponsorship retainer! The great news is this January we had a more even spread of income across our channels and saw a 16% increase compared to last year!
Revenue Portion Updates and the Value of Good Bookkeeping
Ads and sponsorships fluctuated in different ways for us, but due to great bookkeeping, we weren’t surprised! Trello was one of our top five generators of income for January. It grew because we turned up the volume on advertising for it and because it presents an opportunity to get more leads in the door. Trello is our freebie to get feet in the door so there was no surprise that we saw a correlation between the number of new people on our list and the number of people that enrolled in Trello. This also led to Abagail’s number getting passed out and her receiving calls from some confused people about a monthly charge! Trello was down from 42 to 22% though but while the percentage went down the dollars went up, and it also means we made more money in other places! In our Strategy Academy project we shut down ads which meant nobody was signing up, but that was okay because our online shop was doing great and when you're busy with a launch it's not a good idea to start worrying about other things that aren’t doing that well. We also decided to change our billing structure for Strategy Academy so people pay less over a longer time which is another great way to regulate income over longer periods! Luckily we were on top of our books so none of this came as a surprise!
Why Affiliates are Lifesavers and How to Treat Them Like Sponsors
A great way to get some income flowing that many people shy away from is affiliates! Affiliates are different software and tools that you can offer as part of your business. Affiliates can be one way to offer clarity that your business will be sustainable after it reaches six figures and beyond. 10% of our revenue each month actually comes from affiliates, and every six months we do some strategic thinking about how we can incorporate them in new ways. The good news is, affiliates bring in revenue through very little work. We use them as if they were sponsors. The billing structure between affiliates and sponsors works differently but due to their commission-based nature, they can actually end up making more money. We like to think of these different business avenues as if they were a diversified portfolio, so spread the income-generating net wide. Remember, people like Pat Flynn, Instagram fashion bloggers and YouTubers make millions off of affiliate commissions each month! Affiliates were a huge help for us when we were staring out by designing courses and trying to get those wheels turning and they could do the same for you!
The Brilliant Success that is Our New Online Shop
Our online shop was a breath of fresh air in our business, and while it took us a while to get it going, we are thrilled with how well it is doing now that it is open! We are talking about The Creative Template Shop we started in January. It can be your new marketing department because it offers on-the-fly or membership-based access to any design requirements you might have. It's great for those non-design creatives who get brilliant ideas and need to visualize them super fast! We started our business as a marketing company so it feels great to have this avenue which has always been one of our gifts. We thought that membership revenue would exceed individual sales but were surprised that they came in equal with individual sales taking up 6% overall revenue for January. A growth trajectory for the shop seemed like a great idea and our one was set for 10% growth each month. Guess what? We had already doubled our membership by day two of February and had a 22% growth increase. Time to set some new goals! Keep in mind that churn rate doesn’t keep building forever though but as long as you're gaining more members than losing, you're good!
Hard Numbers Depicting Costs and Overall Profit for January
It’s time to dish out a few hard numbers! We spoke about Trello and how we discontinued some of our advertising and this brought the cost of advertising down to 25%! Our rock and roll goal was 30% so this was an amazing statistic to get. We were also happy to see that the cost of goods sold was 27%. Contractors came down to 13% this month from 33% last month but the dollars spent were the same and you know what that means, right? We made more money! We have had to make a few cuts around here so payroll came down a lot from 14% to 8%. That sounds low because it is! The relationship with our ads team has been brilliant and we have a lot to be grateful for as far as our communication with them. It’s time to dish out the big figure everybody has been waiting for! Our overall profit came to a whopping 46%! That’s way up from our goal which was 30%! This is just a reminder that there is no wrong way of setting goals and you need to find what works for you. We chose to set up our goals so that we could have a great January and it worked! While we have had to take on new costs from when we started where our profit was around 80 or 90% and we had almost no COGS, that’s just the name of the game with growing a business. Remember, you can do amazing things this year regardless of how your January was, so keep pushing!
Quote This
You can create revenue in any way you want.
Highlights
Sponsorships, Online Sales, and Exceeding Our January Goal to Break Even. [0:03:55.0]
Revenue Portion Updates and the Value of Good Bookkeeping. [0:09:50.0]
Why Affiliates are Lifesavers and How to Treat Them Like Sponsors. [0:16:48.0]
The Brilliant Success that is Our New Online Shop. [0:31:50.0]
Hard Numbers Depicting Costs and Overall Profit for January! [0:42:36]
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
Reasonable Goals, Sponsorships, Alternative Income Sources, Trello, Strategy Academy, Affiliates, Creative Template Shop, Profits, Costs
