October Profit Report: How We Nearly Tripled Our Profit
Episode 382: Show Notes
It’s time for another profit report! These are not an excuse to talk about our business – we truly want to arm you with helpful information that you can apply to your business as a full-time creative entrepreneur. Ups and downs are a natural part of any business, so we want to give you a glimpse into our month-to-month profit not so that you might compare your business to ours, but learn from our mistakes and find your own rhythm. We aim for a 30% profit and share what all our expenses are each month and the different sources of income over that period so you get all the details. Today you’ll learn what profit means to us, how our summit sales performed, why you must get hooked up with sponsors, the ins and outs of payment plans, and more!
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What Profit Means to Us
We were recently asked why we wanted to increase profit, and truth be told, we just want to make more money. It all depends on what you think “profit” entails and whether what you pay yourself is included or excluded in the equation. When we talk about the profit we make each month, we talk about the percentage that is left after we have paid our own salaries. For us, profit does not include the money we take monthly from the business. The profit is essentially what we have left to reinvest, so the more profit we make, the more opportunity to grow our company. Together with our CPAs, we’ve worked out a healthy salary for ourselves that is appropriate for our company but that can also increase or decrease depending on how we perform each month. Your distributions and the salaries you take should be in proportion to one another because they are taxed differently.
Summit Sales and Trello for Business
In October we launched and started selling our Boss Project Summit, but it only made up 10% of our total revenue — despite the fact that it was the only thing we were promoting publicly. Our Trello for Business course continues to be a huge opportunity for increasing leads without having to pay for them, and it’s an offering that truly builds trust and gets people to buy our other products. This month, Trello brought in 20% of the total profit, which is lower than last month, but keep in mind that the total revenue is more, and that’s why the percentage is lower. Cash-wise, it was more or less the same as last month. Still a stellar performance we think! Trello has also been an effective means of getting people into the Strategy Academy funnel. This $29 course has attracted a cult-like following which cannot simply be reproduced and how amazingly it works in our business continues to blow our minds!
Sponsors and Partnerships For the Win
The part of our business that goes under the radar for most people is our sponsorships. You hear about them on our podcast, but what we didn’t realize before is what a crucial role they would be playing in our partnerships with key players in the industry which allows us to keep focusing on delivering high value. Instead of just selling all the time, we want to keep producing free content that adds value to our customers. By partnering with sponsors, we have more freedom and flexibility to offer these freebies and thereby build greater engagement with our community. Our summit sponsorship for October brought in an incredible 33% of our revenue. A quarter of our entire business is made up of affiliate income (our sponsors and partnerships) and what they bring into the company. We’ve talked about getting stuff in your business for free. Whenever we look at getting new software, for example, we would check if those companies have good affiliate programs and then we would direct people to them.
Strategy Academy — Finally Number One!
We are so happy to say our signature program, Strategy Academy, has finally assumed its position as the number one source of revenue for the month of October. At 41% of our total income, this course has contributed most to our happy dance this month. We’ve had this discussion before, but we just want to stress the potential with payment plans. The advantage of getting paid all at once is that it’s a done deal, money in your pocket. There are no late or failed payments, so you don’t have to worry about not getting your money. But there is a threshold where you might deter people with the total cost. Payment plans make your offering more doable for people who cannot take out all the cash at once. The downside is that payments can fail or be delayed because people naturally lose interest over time. When you have more skin in the game, you are more likely to implement what you learn. Selling a product at full price versus providing the option of a payment plan also requires very different marketing strategies. If you’re still trying to decide whether you should go the payment plans route or not, the bottom line is that there is no wrong answer, but there are blind spots to be aware of with both options.
Let’s Talk Expenses
This one is not as surprising as our costs each month don’t vary a great deal — and it shouldn’t. Last month, 37% of our income was spent on contractors because we had a big one-off payment, but for October, only 13% of income was spent in that way. Our sweet spot would be between 20 and 30%. We’ve had a lot of moves in terms of personnel and team members, having some do more and others less — all in an effort to get our business moving in the right direction and people in the right roles. For advertising, our goal is to spend around 30% of our total income, and we got to 34% for October considering we had to advertise the summit. Our cost of goods sold was a little high at 40%, which meant that we had 60% to spread around. After paying our contractors and ourselves, we had a healthy margin of 28% left. A figure we are so pleased with!
Quote This
For us, profit does not include the money we take monthly from the business. The profit is essentially what we have left to reinvest, so the more profit we make, the more opportunity to grow our company.
Highlights
What Profit Means to Us. [0:04:06.1]
Summit Sales and Trello for Business. [0:08:02.1]
Sponsors and Partnerships For the Win. [0:14:26.1]
Strategy Academy — Finally Number One! [0:22:16.1]
Let’s Talk Expenses. [0:33:18.1]
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 report, Boss Project Summit, Trello for Business, Strategy Academy, Sponsors & partnerships, Affiliate income, Payment plans
