228 - Flipping the Script - My Business Journey
On today's episode of the podcast, we're switching it up! Hosting today's episode is my friend, and former podcast guest, Facebook and Instagram ad expert Claire Pelletreau. You'll hear an episode Claire recorded for her podcast where she interviews me about how I get paid. To hear me interview Claire on Unf*ck Your Biz, check out Episode 204 - Discussing a Multi-Six Figure P&L.
To start the conversation, we dive into client gifting. What do we do with them tax-wise? For context, there is a difference between client gifts and expenses per client. For example, if you have swag bags at events, I wouldn't consider that a gift, but an expense. To get into technicalities, you'd need to look into the IRS instructions, and a lot of it has to do with the details - how and why you're giving these to your clients/students/friends, etc. If it's a standard gift/item that everyone gets, it's an expense. If you're sending a gift every holiday season or New Year's, I would consider that a gift. In the month of March, I received three different speaker thank you gifts for summits I was part of.
I get paid mostly through online courses, speaking, and other general online things. I got started doing 1:1 work as an attorney and in 2019 I released my first course after investing in Amy Porterfield's course and pivoted my business into an online business. My first course was a spotlight called "Legally Launched" and taught you how to file an LLC or Sole Prop without using an attorney or LegalZoom. Around the time I had less than 400 people on my email list and got 14 students. My subscribers came organically, through efforts like speaking events for Tuesday's Together throughout Southern California. This course later became a module inside signature course. Through that launch I made $18,000 at a price point of $1,000. It's important to set up an EIN and business bank account so you can keep your business and personal expenses separate.
When COVID hit in 2020,I had gone from $30k my first year to $70k to $140k in 2020, which made me think I would be doubling my revenue each year as the trajectory of my business. Instead, what had happened was during 2020 my primary audience was wedding professionals who were looking for help with their contracts, incorporating the force majeure clause, ad covering what to do to protect themselves when events were canceled due to COVID.
In response, I launched a revamped membership that I tailored to the experience that people were having at the time, which was great until these wedding pros resolved the COVID-related issues they were having and then membership began to nosedive. Once 2021 rolled around, the people who needed the membership had already joined and were now back to doing so many events they didn't have time to join or do the work in my other programs which became my struggle. The price of the membership continued to go up about month after month from $39 to $69.
My goal for 2021 was $250,000. I had a launch in April of 2021 and this was the launch of my $2,000 signature program. At this point in my business I'd had an $18k launch, a $35k launch and a $40k launch. My goal for this launch was 6-figures, however I only ended up making $10,000, which led a lot of self-reflection.
I knew several of the things I'd done wrong. Even though my email list had been growing I hadn't been doing a lot of public speaking so I wasn't reaching new audiences. I learned not to be complacent. Evergreen can work, but it doesn't mean that you're not working. On top of that, so much of my wedding planning audience was now doubly busy with making up 2020 weddings but not making more money on these rescheduled weddings. So I hired a VA and we started pitching new podcasts to reach out to new audience like interior designers.
I don't think I have yet to have a webinar with low conversion, it just comes down to how many people I can get to sign up for the webinar. That webinar had lower numbers. After this low converting program I treated this as my movie montage moment to review what the problem was and look for a solution. I spent a few months in processing mode and ended up coming up with my new program, Profit Rx, that I launched in November. I hired a messaging coach, brand photographer and brand designer.
We're all in this entrepreneurship thing to get paid which was what my message came down to, educating on the legal aspects of our business and how they help us get paid. The message became more about how to run a profitable business and turned into a 10 module course inside a membership.
It launched at $75/month. That price point is now $100/month but I have a VIP tier of the program for people who are looking for support and a $30/month option for people who are just looking for access to the content. When I launched at $75/month we launched with 80 to 85 members. I had a 35% conversion rate on the webinar I did to launch Profit Rx. The value proposition was good and I presell on my Instagram stories about my offerings that are in the works a few months in advance.
In my promo emails, I explain what I'm going to be doing in my webinar. That I'll be teaching on a certain topic for 45 minutes, then inviting them into my new program on the webinar. In the reminder emails, I'll give them a little bit more information about the program and I'll also say I think you're going to be excited because it's going to be one of the most affordable things I've ever launched, or explain that it will be a high-ticket item, depending on what I'm launching.
The MRR (Monthly Recurring Revenue) on the launch came to $5800 which included previous program members that were rolled over. That was in November. In March, when this episode was recorded, I did a second founding member launch with a content-only subscription available at a lower price point.
In January, I released the Contract Vault, another point of Monthly Recurring Revenue. I used to sell a Contract Course, but realized no one wants to take a course on contracts, so I took the contract templates I included in that course and rebranded it as contract templates with course material if you want to take the course and sell it at a price point of just $30. From January to March I had 362 sales. The price point is very low because if I want someone to buy it it needs to be a no-brainer.
For a bit I was running ads to this, but I was spending more for acquisition than I was getting for the sale. I was okay with it for awhile because I was also viewing it as an awareness ad, but then stopped running ads to the Contract Vault. My goal for the Contract Vault now is that it's also organically shared because of the price point and I continue to see it recommended in Facebook groups I'm in.
Re: Facebook ads, Claire shares that it's important to identify the cost per acquisition because that is the cost per sale. Whenever you launch something, typically it does well at first as Facebook pushes it out to your warmest leads. It could be a tripwire on the backend, a lead magnet on the frontend, whatever it is you launch it's going to show your offer to the warmest people first, and then you need to figure out the cost per acquisition to a stone cold audience.
When selling, it's important to add value and show that you are someone they know, like, and trust in a video, whether it's an evergreen webinar or a sales video, that's going to go toward people being interested in purchasing. This can be more difficult when you're asking someone to pay a monthly membership as opposed to a one time cost.
The content-only monthly membership of Profit Rx gives you access to what you need at the time for $30/month, whether it's help filing taxes or forming an LLC. If you don't want to sit through a course, you can pay a much higher ticket price for 1:1 time, which is offered at a slight discount for Profit Rx members, to go through a very specific topic with me.
My Facebook group is free and I accept questions in the group, and oftentimes former students will also chime in and answer the questions. For higher-level questions you can join the $100/month membership and ask questions during our weekly group coaching calls.
When it comes to running a profitable business, I calculate my profit based on business revenue - business expenses, excluding your owner salary if you have an S Corp and pay a salary with payroll. Busines income - expenses I call your Owners Profit. Taxes you paid are not included in this. I would include that when calculating your Take Home Pay, which is Owner Profit - Taxes, which is your salary. What matters in a profitable business is how much you can pay yourself. And this can change based on planned sales for a month and knowing that a launch needs to cover a few months of salary and what is your plan if your launch doesn't perform the way you planned?
Currently, I am working on more joint venture webinars and creating a new resource on back taxes to add into the membership. The goal of the membership is that there are resources for business owners at all points in the growth and evolution in their business.
In my business, I currently have five team members, all contractors, each with very niche tasks. I have a tech VA, a community manager, a social media VA, a content writer, and a social sales person.