June 2020 Profit Report: Investing During a Growth Season
Episode 456: Show Notes
We received a DM the other day all about how amazing our profit reports have been for people but it was also somewhat of a review. So, we just want to remind people that they can review this podcast and be a part of our podcast party (tune in to find out how!). But back to our DM about our profit report and how helpful it was for this woman in her business, and how these reports continue to feel like an inside peek into the actual workings of our behind the scenes.
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At the end of the day, the dollars are not what matter. We want you to see profit – more income in your business. Revenue is fancy. Revenue feels sexy. Revenue does not give you the lifestyle you want though. If you’re not keeping any of that revenue, then it is irrelevant. So we want to help you keep more revenue, that is make more profit so you can increase how much you’re getting paid and also just save for crazy times! So today, we are excited to talk about our June 2020 profit report.
Growing Your Audience by Entertaining Them or Adding Value to Their Lives
We know that for the last few months we have been speaking a lot about the growth of our Creative Template Shop, but we need to speak about it some more! The amazing success it has been for our customers, team, and ourselves is just making us feel so good. While the growth has been incredible, we are doing everything we can to improve both the front and back end sides of the business. So to this end, we have recently invested in two different programs in the last few months. The first was a course by our friend Tyler J. McCall called the Insta Launch Blueprint. Tyler’s course focused on a similar point that Gary V often makes which is that if you are not either entertaining or adding value to your audience on Instagram, you don’t have much chance of getting their attention when you post. So much of social media is just a vanity, PR, self-celebration fest which is not effective for growing an audience. Our Boss Project Instagram had been beginning to take a back seat for us and many of the posts we made got low amounts of likes based on our massive following but after taking Tyler’s course things changed. His program helped us start focusing on trying out highly shareable content strategies and almost overnight we went from hundreds to thousands of likes! The effects this has had on our Creative Template Shop have been fantastic.
Getting to Know How a Membership Oriented Business Model Truly Works
This leads us to the second course we enrolled in which was more focused on having an impact on the back end – Stu McLaren’s TRIBE. Stu’s course has been designed specifically for people with membership sites. While our Creative Template Shop has not been our first membership site, it’s been the best and the most fun. When we were setting it up we mostly used our own experience and friends’ strategies and while these worked well enough, we got to the point where we realized that memberships are a completely different business model. There are specific things about membership like churn, retention, monthly commitments, and customer happiness that we needed to start paying attention to more than ever. Stu’s course was completely invaluable in this regard. We joined the course when we were about 300 members in and found that a lot of it was amateur focused, but we are big believers in the idea that even if you just get one golden nugget from a course then it’s worth the money. Indeed, just the retention module alone in Stu’s course was enough to make it worth our while.
Some of the tangible implementations we made after Stu’s course were back end workflows and emails to make sure we are nurturing new people from the beginning and helping them to have a clear understanding of how to get set up and use the shop instantly. Another great take away from the course was the value it provided us as far as learning how to separate the template side of our business from the strategy one. We love to get into the weeds of strategies but realize the Creative Template Shop requires more of a SaaS orientated business model approach than the one we use for our online course so knowing how to keep those two things apart has been an amazing lesson.
What Percentage Profit Each Side of Our Business Made for June
All of this is to say – we told you all that the Creative Template Shop would take over our business and as predicted, it’s now generating 42% of our profits! In our last profit report we said it will be over 50 by year’s end and the way things are looking it should be there way before! So we have big plans for the shop and will be continuing to help it grow but our eyes are also still very much on the other sides of our business. Focus has been a huge issue for us in the past but we are starting to master it now and one of the reasons why is because we have built an automated system to run our signature program. We are still showing up for our community there but the whole sales side is now automated. With all this, the signature program is sitting on a solid 26%! All we have to say for affiliate income at this point is that it’s sitting at 14% for June.
July marks a year since we have been working with our sales team and it has been a brilliant journey, and recently they made a suggestion to us which we were reluctant to follow at first. The suggestion was about our sales funnel for Trello for Business. Right now, Trello is sitting on 12% and that only sounds low because everything else has been doing so well. Previously, when people signed up for it, they were directed to a thank you page to sign up for a webinar. The percent conversion for this was not that high and we had been wondering whether something different would work better. So, our sales team suggested we do an order bump and finally they convinced us. The great news is it couldn’t have been a better success! 43% of people are converting from a $29 to a $40 purchase now, so a big thank you to our sales team!
It’s Time to Speak About Where We Spent All of Our Money!
Our expenses haven’t changed much this year because we focused on streamlining, but our biggest cost savings was thanks to changing our email service providers! If you haven’t heard our episode where we speak about Flodesk you should definitely check it out and after that, give their free trial a try! Switching over to Flodesk has literally saved us thousands of dollars, and all for only $19 a month. As far as cost of goods sold and expenses, our software has been consistent and super low. We don’t usually report on software spend but it’s in the neighborhood of around $1500 per month and we are still continuing to simplify. Some businesses will spend more on software in proportion to their revenue though so this is definitely something to be aware of. So, for cost of goods sold, we have consistently stayed between 30 and 33% which is our goal so we are happy about that. Advertising makes up the majority of that cost of goods sold – 28% – and the difference goes toward fees for Stripe, PayPal, Memberspace, and so on. We feel great about this because for a long time when it came to ads we were focused on how to make a huge amount of money at once but now that we have our membership program, MRR has taken over. Technically membership is what makes up MRR but as we get more people signed up on the Strategy Academy on payment plans, that starts to look a lot like MRR. If we break even on the front end with a membership ad or with a Strategy Academy sale, that means for every month the person stays after that, it is pure profit for us. So, we have no problem spending money on ads if it will be pure profit after the initial transaction. As far as contractors, things are still sitting at 21%, and we need to focus more on vetting because we are experiencing some months where we suddenly need all these new contractors. The only change on the profit report side is that we increased our pay. Payroll makes up 20% of our expenses. We took cuts a while back to get through a stressful time but now the fruits of our labors are paying off and we want to reward ourselves and our teams for it! So, even with all the crazy, we still landed at 22% profit for June! Our goal was 30%, but we feel great at 22%, and our July report is going to be insane though, so make sure to tune in for that!
Quote This
The fruits of our labor, of our refocus that started last fall, are showing.
Highlights
Growing Your Audience by Entertaining Them or Adding Value to Their Lives. [0:05:20.1]
Getting to Know How a Membership Oriented Business Model Truly Works. [0:14:13.1]
What Percentage Profit Each Side of Our Business Made for June. [0:24:47.1]
It’s Time to Speak About Where We Spent All Our Money! [0:34:39.1]
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
Audience Growth, Membership Models, June Profits, Expenses, Revenue, Inside Look
