277 - March Profit Report
On today's episode of the podcast I'm breaking down my March profit report and sharing my goals for April.
I've been doing this for almost two years now because I don't think enough people are doing this in my opinion. I'm not trying to encourage everyone to have a policy of radical transparency, but I don't think enough people talk about this amongst their business friends. After all, bringing in more revenue and making more profit is why we got into business, isn't it? This is why I talk about it on the podcast and bring others on the profit to discuss their numbers.
To start, let's recap some big goals I have for 2023 so we can see how I'm tracking with those goals.
1. I have a big goal to bring in consistent revenue of $20,000 in revenue per month by the end of 2023. I'm working on building up to this throughout the year since I ended last year with consistent $15,000 months. The good news is, we're ahead of plan, I hit $20k in February and I did $20k in March and I think I'm going to be able to continue doing this while keeping in mind that May - July tend to be my slowest months. April we'll still be getting an influx of tax clients.
2. I have a goal of getting to $20k in monthly recurring revenue (MRR) by the end of the year. The legal subscription is going to be a huge help for this. Last I checked we have 15 members of the monthly legal subscription and I think we can get that to 50 by the end of the year. So far in the membership we've helped people with contractor misclassification with the EDD, I'm helping someone with a potential lawsuit, we've sent a few letters to people's clients who owe them payment, we filed our first trademark and I just signed on a new person who will be having us send a bunch of copyrights for them. For context, in the month of March we had $14,000 in total MRR ($9,000 in MRR from Profit Rx, $2,600 from the legal subscription and $2,400 from our bookkeeping clients).
3. I set a goal to have expenses under 35%. I got off to kind of a bad start this year but I think I can average it out by the end of the year. That being said, I'm intentionally not letting myself get too hung up on it (weird, I know, since this is a profit report) but it's because we are in a serious growth mode so we're focused more on growing the revenue.
You have to do this in cycles. We want to keep profit in mind but sometimes you can worry too much about nickel and diming everything when you are trying to increase your profit, grow your team, and do all that kind of stuff and that's where we are right now.
Let's take a look at how March played out in comparison to my projections for it that I shared in last month's profit report (Projected --> Actual)
Education
- $9,000 in MRR from Profit Rx --> $8,983 (basically nailed it)
- $3,000 in low ticket stuff --> $2,100 (not super close, we're a little behind in promoting our Contract Club)
- $12,000 total --> $12,200 (includes book sales and other misc. additional revenue)
Law firm
- $5,000 in tax return clients and monthly bookkeeping --> $6,150
- $4,000 in legal stuff --> $4,675
- $4,500 in consultation income --> $4,000
- $13,500 total --> $14,800
Total: $25,500 and we ended at $27,000 (giving myself a pat on the back for this)
Now let's talk profit.
Most of the expenses this month came from the LLC. I have a little bit of a problem in that many of the tools I use for both businesses that are all charged to the LLC like Zoom, Asana, etc. which ideally should be desperate but I'm not paying double.
For tax purposes, we have to expenses broken down by business so I have a separate P&L for both businesses and then a joint P&L where I combine everything together just for my own benefit so I can see the profitability of my businesses together to tell me how much I am personally making. No one would look at this if I sold the business or went for a loan, this is only for me. To not make the podcast an hour long I'll often talk about the combined P&L.
Check out my P&L here - https://bit.ly/marchplstatement
In total, I spent
$2,400 - Team (I'm looking at hiring a few new people including a case manager to on-board new law firm clients, make sure contracts and invoices are getting signed and paid, follow up that work is being done and I'd like to bring in another attorney to help me)
$1,040 - Contractors. I have team contractors and non-team contractors that do one-off projects which is what this category is. This is money I paid a trademark attorney to consult for a client I was working on. Before, I would have just would have turned away certain types of clients that I didn't think I could help because I didn't have enough experience and I still do this sometimes because we never want to get in over our heads but, tip for everyone, if you can help someone like 75% and if you need to then you can bring someone in to close the 25% gap.
$500 - Book editor deposit. I'm working on a third edition of my book which you can check out for free in my bookclub here www.bradendrake.com/bookclub
$700 - Affiliate payments. This is the one expenses where the goal is for the expense to be higher. The more we pay out means the more we are making in sales.
None of the other expenses categories are significant, just small expenses here and there.
Total: $7,200 for both businesses combined
This left profit, not considering my own salary, at around $20,000 for a profit margin of 73% which is 8% over what I want it to be before salary which is wonderful to help make up for the last two months.
I am currently only $2k in revenue behind hitting my big big goal of the year which is $300,000 in total revenue which I don't think I've shared before today. To reach this, I looked at my revenue for each month last year, and then I looked at if we did $170k last year, what percentage more would we have to do to get to $300k and then I apply that percentage to each month's revenue from last year instead of taking $300k and dividing it by 12 since each month varies.
We hit $62k for Q1 which would put us a little over $240k for the year and that would be great, I would take that. My good goal was $225k, my better goal was around $270k and my best was $300k and we're tracking to that.
In the coming months - we'll be coasting a bit in April meaning we aren't promoting anything specific because we have a launch happening in May for the first big launch of Unf*ck Your Biz in two years.
Last month I said the month of March would be very telling since we launched the law firm in February so we had people lined up ready to get started which would make it a higher than normal month since we don't usually have a waiting line of people to work with us every month but that spilled over into March and now in April I'm curious to see if the leads are going to slow down and this month will definitely be very telling.
Taking a look at April projections
Education
- $9,000 in MRR from Profit Rx
- $2,000 in low ticket sales
- $1,000 in book sales (only putting this on here because I hope that many folks from the book club will want to buy the book)
- Total: $12,000
Law firm
- $5,000 in tax stuff
- $4,000 in legal
- $2,500 in consultations
- Total: $11,500
Total for both: $23,500
My goal on my projection calculator for $300k in 2023 is only $18,000 so if we hit the $23,500 we'll be on a really good path to reach my best goal
If you enjoy the profit reports, I'd love for you to send me a DM @bradenadamdrake and tell me what you love about them so I can expand on certain areas moving forward.
