In a one-gig world, it’s easy to know if your one gig is profitable. However, in a multi-product, multi-business, all-access world, it is much harder to know which of your gigs actually are profitable.
I learned this the hard way.
This is Part One of a Two-Part Series.
Someone once told me that I’m the kind of person who needs a career AND a major hobby to settle my heart & mind.
Because I agreed so much, I later added a few more complicated setups to make me feel fulfilled…and, here I am. That was a joke.
My biggest mistake in the beginning was not requiring each of my adventures to support themselves financially.
I considered income and expenses from all sources to be “for the collective.”
Everything was subsidizing everything else!
So, what did that mean?
EXAMPLE 1: CAREER SUBSIDIZED BUSINESS
I confused what I personally could afford with what my young, fledgling businesses could afford.
For example, when I traveled to a conference for a side hustle, I traveled the way I would travel in my personal life - so, my job subsidized my side hustle.
Truth is, my online business couldn’t yet afford the first-class trip and nice hotel that my law career could.
EXAMPLE 2: BUSINESS-A SUBSIDIZED BUSINESS-B
Then, when I had multiple businesses, I confused which ones were subsidizing the others.
I remember struggling so much at first with email that when I set up my first online opt-in form, I went out and bought myself a $3500 gift to celebrate. Clearly that money had not come from that business with no email list.
I didn't even celebrate that hard when I closed big real estate transactions that warranted such gifts!
EXAMPLE 3: PRODUCT-A SUBSIDIZED PRODUCT-B
Then, within any single business, as soon as I introduced a second offer, I lost track of how each individual offer was performing and what each offer cost to create, maintain, market, and deliver.
EXAMPLE 4: HUSBAND SUBSIDIZED IT ALL (atta girl!)
I remember being in a FB group where people criticized a woman because her husband had been subsidizing her coaching business.
I had two thoughts.
First, what’s wrong with letting men be heroes?
Second, I thought to myself that many of the people dogpiling on this woman were probably looting their retirements or savings every month to subsidize their own businesses.
So, what is the lesson?
I had to learn to view each product or business line as its own thing.
I had to learn to let each product and each business have its own profit & loss statement.
This is trickiest when you have multiple products in one business. It is very tricky when you create offer bundles, upsells, downsells, and all-access passes.
In retail establishments, they know exactly how much each individual SKU is making and costing. Then they have some general expenses for the store that are distributed across the entire operation, like sales staff, maintenance, shipping, signage, utilities, etc.
Are you tracking profitability for each individual SKU/offer, and then distributing general expenses across the entire operation?
Are you distributing those expenses across your entire inventory on a pro-rata basis?
Is each business or product earning the investments you make into it?
A mentor of mine said something a while ago that put this all into perspective:
She said, "By now, I think this little offer has earned itself a professionally-written sales page."
She then invested in a professional copywriter. Prior to that, she’d written the sales page herself to see what the offer could do.
Once it earned enough, she used THAT money to build up the offer.
Here's to BIG profits this year and next!
See Part Two because not all products are created to be profitable.
Big Love!