or scroll down to get the highlights

Last week on the podcast I shared a strategy that will slash your “To Do List”, and show you how to be more effective by focusing on what your Business really needs now.

Today, you can be a fly on the wall as I walk an Inner Circle member through the process of figuring out what her business needs now, and setting her priorities for the balance of the year.

Kelli Meyer is a “newish” Inner Circle Member who was feeling overwhelmed by all the things on her “To Do List”. She knew that she had more work on her list than she can manage, but she had no idea what she should work on first.

She was overwhelmed and stuck, so she asked for help in our private Member’s group.

It’s common for people like us to have trouble identifying the tasks that should be a priority vs the tasks that can wait.

When I saw Kelli’s post, I knew I could help. So I invited her to jump on a call with me and we could figure out her priorities.

Together, we walked through the  process of:

• Getting clarity on the outcome Kelli wants this year
• Refining her outcome to make specific and measurable
• Slashing the number of tasks on her “To Do List”
• Identifying what her Business needs right now
• Specific tasks Kelli should outsource
• Deciding on the tasks that are her priority work

We also talked about the one common mistake that will keep you overwhelmed all the time.

See how you can use this process by watching my session with Kelly, or scroll down to listen to our session.

Listen for:

• The common mistake that will keep you feeling overwhelmed.
• The “aha”moment when Kelly identifies what her business needs now.
• Susan shares an extra little gem: The secret to conversion.

Use this simple process every time you feel “decision overwhelm”, and reach your goals faster.

Once you’ve decided on your priorities, it’s common for it to be difficult to find the time to get this work done. It was a challenge that I had struggled with for years, until I finally got some help.

Now I have a process that has changed everything for me. I knew that if I was able to transform the way I manage my work, you can too, so I asked my coach to jump on a call with me and share the process that I’ve learned. You can listen here.

Links mentioned in this episode:
https://thesocialsalesgirls.com/a-hot-tip-that-will-make-you-money-episode-154/

Grab the Guide, Emails that Sell here:
https://learn.thesocialsalesgirls.com/emails-that-sell-guide/

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

or scroll down to get the highlights

What if I could show you how you can slash your giant list of things to do? 

I’m going to give you my process, so you could slash that list today. When you do, I promise, you’ll be more effective, you’ll make measurable progress, and you’ll feel better about how you spend your time.

How do I slash my “To Do List” without creating more stress?

The goal is to reduce the tasks on your list and feel confident that everything won’t fall apart.

You start by realizing that you’ll have a bigger impact on your results if you focus on doing a great job on a few areas of your business, rather than spending your work time rushing through your list and checking off a bunch of tasks.

When you’re in “check off” mode, you’re often not clear on why you’re doing the work, and you’re not asking yourself this one important question:

What does my business need right now?

When we’re in a state of overwhelm, most of us can’t see the answer. We see every task on our list as “important. That creates a sense of urgency, and it’s why we always feel like we’re behind.

A big “To Do List” is the Kiss of Death for people like us.

When you’ve got a big list of important things to do, you’re likely to be in high gear, dipping in and out of projects all the time. You feel like you’re working hard, and you’re doing the things you’re supposed to focus on, but you probably don’t feel confident that you’re on the right track. It feels messy and hard, and you wonder if you’re wasting your time.

Or, you might be the opposite. You might have a huge list of things you know you should do, but you still feel stuck. You know that you don’t have the time and resources to do all the things on your list. You want to work smart, but you can’t get clarity on where to start, and what will have the most impact on your results. You’re experiencing decision overwhelm, and you feel like you’re wasting your time.

Wasting time is more expensive than wasting money.

Don’t risk doing a little of a lot of things, but not completing anything. 

Imagine that you have a piece of lumber setup with 10 nails that you need to finish hammering into the lumber. You’re allowed to hit the nails 10 times.

If you hit each nail 1 time, you’ll start 10 nails, but you won’t finish nailing any of them into the lumber. And in fact, you might not even be able to see that you’ve done anything.

But if you choose to focus on just 2 nails, and hit them 5 times each, you’ll finish hammering in 2 nails. You’ll be able to see the impact of your 10 hits. You’ll be clear and confident about the progress you’ve made, and what’s left to do.

Give yourself permission to remove tasks from your plate, so you can focus, and see the impact of your efforts.

3 steps to deciding what your business needs right now

1. You have to start at the end to find where you should begin.

When we’re prioritizing, it’s too hard to sort through and make assessments about all the things we “could” do. So we don’t make a decision. We default to “doing all the things” or we spin in circles, analyzing our options from all angles, and ending up exhausted.

When I’m working with a client, I always ask them about outcomes, usually in the form of a question like this:

If you woke up X months from now, and ONE thing had changed in your business, what would that ONE thing be?

Try it. Ask yourself  – start with 3 months.

In your perfect world, what would have changed in your business in 3 months?

When you focus on outcomes, it gives you clarity on the destination. Once you know where you’re headed, you can make a plan to get there.

Here are some examples of an outcome:

• My sales have grown
• I’m emailing my list and getting more sales
• I’ve got more time to do marketing because some tasks are off my plate

2. Make your outcome specific and measurable.

If you’re headed to a vacation rental in a city 500 miles away, would you ask for directions to the city, or would you use the address to get directions that take you all the way to your rental?

You’ll make better decisions when you take the time to get specific about your outcome.
You’ll come closer to achieving your outcome when you find a way to measure your progress.

Here are some examples of how to make outcomes specific and measurable:

Add specifics to your outcome
From: My sales have grown
To: My sales have grown by 10% each month. I’m tracking my sales in a spreadsheet every week.

From: I’m emailing my list and getting more sales
To: My Welcome, Abandoned Cart, and Browse Abandonment flows are complete, and I have sent a campaign every week. I have a spreadsheet to track my campaign sales and I have identified my 4 best campaigns.

From: I’ve got more time to do marketing because some tasks are off my plate
To: I have freed up 2 hours a day. I have a customer service app and I have trained my new Customer Service VA to manage all  customer service inquiries. I have created canned responses and training videos so that my VA has the information she needs to do the job, and we’ll be covered if we have to train someone else on this job.

3. Work in your zone of genius 

Give yourself permission to stop doing all the things. Even though you think you can’t afford to get the help you need, I’m going to encourage you to change how you think about this.

I see too many store owners bogged down and frustrated by tasks that aren’t in their zone of genius.

If you’re hesitant to hire for tasks, I would encourage you to start with “one time” tasks.

These are often set ups or installations that require a particular set of skills. A few good examples are things like upgrading the theme on your store, or custom coding, or migrating to a new email provider, or setting up the framework for email automations.

Before you hire someone to do a task, you must understand the outcome you want, and have a clear picture of what a good result looks like.

Remind yourself that you don’t have unlimited time or unlimited energy. Like money, time and energy are resources. When you spend them doing work that is not in your zone of genius, or that you’re not even good at, you’re spending your high value resources on work that you’re not qualified to do.

It’s like hiring the CEO of a fortune 500 company to rewire your house.

This Blog Post and Podcast will show you how to budget for this:
https://thesocialsalesgirls.com/how-to-have-more-cash-in-your-business-episode-164/

Remember this when you’re facing overwhelm:

Give yourself permission to slash your to-do list. You’ll be more effective, you’ll make measurable progress, and you’ll feel better about how you spend your time.

• When you’re deciding on your priorities, ask yourself “What does my business need right now”.
• Focus on specific, measurable outcomes, and use them to decide what your business needs.
• Work in your zone of genius as much as you can. Wasting time is more expensive than wasting money.

Next week on the podcast, I’m going to show you an example of this process, so you can see how you might apply it to your to-do list. I’ll be working with an Inner Circle Member, so you can see how we identify her outcome, and then prioritize her work.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

or scroll down to get the highlights

Pricing to Maximize Profit

Today I’m sharing a pricing strategy that most store owners don’t use.

Once you understand how it works, and start implementing it in your store, you’ll have the potential to be much more profitable.

Most importantly, you’ll have a better understanding of how to pay yourself, hire help, and make your business profitable for the long term.

Before we dive in to what how you can price your products for.

The pricing error that could put you out of business

Most people have their own system for setting their retail prices. Many store owners use a target gross margin percentage, and apply that markup to every item in their store. Others simply set their retail prices at a multiple of the cost of the product.

Even though these strategies seem solid, it doesn’t guarantee that you’ll be profitable.
It’s completely possible that you could find yourself losing money every month, because the actual profit in dollars and cents is not enough to cover your expenses.

Try a different way to calculate the selling price of your products

Instead of using a formula, try setting your prices based on Margin Contribution dollars. You decide on a minimum amount of Margin Contribution revenue your products must generate.
When each product must contribute a minimum profit in dollars, you can avoid costly pricing mistakes and meet your minimum Margin Contribution by bundling products together or even eliminating products that don’t generate enough profit.

How to make sure you get paid and have funds available to hire help

In this episode I share the sneaky little strategy that will give you the funds you need to pay yourself and be confident that you can afford to hire help.

It’s a little exercise that anyone can do. I think you’ll love it!

Even if you hate the numbers, you can do this

As store owners, we tend to focus on our products and on growing our sales. Most of us don’t spend much time analyzing our finances, and many of us are simply not comfortable when it comes to conversations about money in our businesses. I understand that, because for many years I felt that same way. One day I was finally fed up with paying late filing fees and getting financial surprises, and I decided to get on track and understand this part of the business.

It’s not nearly as hard as I thought it would be. I’ve learned that everything is fixable, and that you actually can be more profitable when you have the information you need to make good decisions.

In the episode, I mention this video and podcast episode:

Video: https://thesocialsalesgirls.com/the-secret-to-getting-paid/

Podcast Episode 43: https://thesocialsalesgirls.com/forget-everything-you-think-you-know-about-pricing-and-be-profitable-episode-43/

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

or scroll down to get the highlights

Recently I recorded a podcast episode about cash flow, and how Ecommerce store owners often don’t understand why they are chronically short of cash in their businesses.

After the episode was released several store owners reached out to me to share their struggles with cash flow. Some were looking for advice, but many just wanted to express their thanks for normalizing a topic that is embarrassing and often creates feelings of failure.

Karen Steuer is a long time client, and owner of Tangled Roots Herbal, a multi six figure business that includes a brick and mortar location and an ecommerce shop.

Karen has been struggling with cash flow for some time, and needs some advice. She’s at the point where she’s exhausted by the stress, and wants to solve her cash flow problem this year, even if it means that she needs to make some hard decisions.

I asked Karen if she’d be willing to jump on call with me so I could have a look at her current situation and give her some recommendations about how she can create a plan to move forward with more cash in her business.

Karen has generously allowed me to share our conversation. We agree that any store owner can follow the process we used to check the financial health of their business.

If you prefer to listen, scroll to the bottom.

Here’s what we did:

I asked Karen to send me her year to date income statement and balance sheet.

When you have a cash flow issue, it’s highly emotional, and most of us think that we can work our way out by working harder and selling more.

The truth is, that way of thinking keeps us where we are. The best way forward is to take a step back and look at the facts. Even though it’s uncomfortable, we need to start with the data.

Is the Business profitable?

I used the year to date  [4 months] data from Tangled Roots Herbal Income Statement to gather the data below:

YTD income:  $72,570
YTD cost of goods:  $37,216
YTD gross margin:   48.8%

Calculate gross margin by 100% minus (Cost of goods / income) 

Tangled Roots Herbal has an average gross margin of 48.8%.

In simple terms, on every $10 of sales, Tangled Roots makes a profit of $4.80.

Tangled Roots margin of 48.8% generates:
YTD Gross Profit on sales: $35,414.

Tangled Roots expenses are:
YTD Expenses: $49,407.

Tangled Roots has a YTD Loss of $13,993.

4 months into the year, Tangled Roots Herbal is losing about $3,500/month

When we looked at the expenses, there was one expense that stood out as too high.

The Company’s wage expenses are $22,930, which represents 32% of the total sales, and a whopping 46.4% of their total expenses.

This amount includes labor in the physical location and the cost of various contractors. 

It does not include any owner’s wages.

Typical wage costs for product based business should be 15% to 18% sales.

At 18% of sales, the upper limit wage spend for Tangled Roots Herbal is about $3,240 a month.

Year to date, the average monthly wage spend is $5,732, almost $2,500 over the recommended upper limit wage budget each month.

Recommendation #1:
Get a plan to bring monthly wage spend to 18% of total sales in Q3 and Q4.

Cutting expenses is not a long term solution to cash flow shortages.

Even though I think it’s imperative that Karen cut her wage expenses to 18% of her monthly sales, for Tangled Roots, like most product based businesses, simply cutting expenses will not make the company profitable for the long term.

In an established business like Tangled Roots Herbal, the expenses incurred to operate the business, including owner’s pay, need to be covered by the gross profit.

In product based businesses, the gross profit is dictated by the margin we set on our products.

When Karen gets wages to 18% of sales, she’ll free up about $2500 a month.

Year to date, the business is losing about $3500/month.

She must get her wages down and more.

The pricing mistake that will kill your business.

Tangled Roots has a margin problem, and that’s the root cause of the cash flow issue.

Even though many people think a gross margin of 48.8% is normal, it doesn’t tell the real story.

It might surprise you to learn that gross margin percent is much less important than your gross profit  (margin dollars).

The simple fact is that Tangled Roots Herbal is not generating enough margin dollars to cover their expenses.

When I reviewed Karen’s website, I could see why her gross profit is low.

The bulk of the products in the store and on the website sell for less than $10, and that’s where the problem starts.

Even though the margin % seems “enough”, Tangled Roots is not generating enough margin contribution dollars to cover their expenses.

Here’s an example of how low the profit actually is:
Tumbled stones: $5.45 = $2.65 profit
Incense: $12.95 = $6.32 profit
Chakra Candles: $19.99 = $9.75 profit

Recommendation #2:
Set a minimum margin contribution dollar amount for every product sold.
Raise prices to reach the margin contribution dollar minimum where possible.
Bundle products to reach the margin contribution dollar minimum.

Can Tangled Roots Herbal return to profitability?

Karen can absolutely make her business profitable again. She’ll need to make some hard decisions, but she has lots of options. Now that she knows the facts, she can make good decisions that will pay her well in the future.

As online Retailers, we need to remember that we control the messaging of our business. We get to decide who our ideal customer is, and we have the power to put together products and messaging at a price that will appeal to our customers and make a profit for our businesses.

Tangled Roots Herbal is a specialist business that caters to people who have an interest or a passion for the products. Karen can let go of her “rules” about pricing, margin, and creating a selection of products and services that fill the needs of a broad audience with a variety of interests. Over the next few months, she can decide on who her products are “for”, modify her offers and pricing to serve that niche, and create messaging and stories that appeal to her perfect people.

By the end of the year, she can reduce her expenses, narrow her inventory and increase her margin so that she can finish the year on a high note.

Next Steps:

I left Karen with three things she can do now to get back on track.

1. Run an Event that will generate some quick cash this month. I recommend that Karen start liquidating some of her low margin, fringe products. The goal is to sell out and recover some cash.
2. Take a few days to think about what you want the business to look like by the end of the year. Who are you serving? What are you selling, and what is your scalable product? Create a one line elevator sentence for your vision. Create and promote a 100% digital product that you can sell online. Your biggest opportunity for long term profit is online. Your online sales are up 22% year to date, while your brick and mortar sales are down 15%. I recommend you work towards closing your store and selling online only.
3. Your gross margin needs to be 70% for you to break even. Start this work now.

Karen has promised to get started and report on her progress. I’m excited to see what she can accomplish in the next few months.

If you’re struggling with cash flow, and your books are not up to date, that is your first step. Get it done now. Your data will be the key to solving your problem.

Find the episode about cash flow here: https://thesocialsalesgirls.com/how-to-have-more-cash-in-your-business-episode-164/

Learn how to stop wasting money: https://thesocialsalesgirls.com/youre-probably-wasting-money-on-this-episode-134/

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

or scroll down to get the highlights

What is “scaling”

In ecommerce businesses, scaling happens when your sales increase sharply, but your inventory and expenses do not increase at the same rate.

Generally scaling happens when you create a “scalable” offer. It can be a product, or a collection, or a subscription that has the potential to be sold in increasing quantities every month. These offers usually have a “hook” that makes them highly desirable.

These offers are more profitable because the merchant is able to:

• Create an acquisition path for that one offer
• Focus their marketing on one offer
• Confidently predict their sales of the offer
• Collect the profit on the offer every month as a result of high “turnover”
• Maintain low levels of inventory
• Have more cash on hand every month

Here’s a visual example of a store’s sales and expenses and inventory before and after a scalable offer
Left side expenses and inventory: 150K and sales:175K
Right side expenses and inventory: 175k and sales: 350k

Growing vs Scaling your Sales.

Most store owners are focused on “growing” your sales by finding more customers to buy more of their products. When you’re thinking of ways you can grow your sales, it’s not unusual to create new product lines that you can sell to your current customers. It feels logical, and it’s the way that most people grow their sales.

The problem with growing your sales this way is that it’s expensive. It requires an investment of your cash to finance this growth. It “costs” time, brain space and causes a “drag” on your operation as you adjust to the growth.

Adding products = adding inventory
More inventory = more labor, more space, fewer turns
More inventory on hand = less cash on hand
Profit sits in inventory + you have to “feed the inventory beast” fast – takes all your cash and more.

Scaling is your best opportunity to be more profitable

When you create a single offer that you can scale, you have more control over your inventory, because all your sales growth comes from one offer. Your inventory turns over quickly, and your investment isn’t spread over multiple products. You’re able to capture your profit on your inventory investment frequently.

More revenue and more profit = more choices, freedom in your life
More profit = bigger paycheck
More sales and profit = high value company that can be sold
Create wealth in your life

This week, I’m sharing why “scaling” is better than “growing”, and how you can start.

If you prefer to listen, Scroll to the bottom

Read on to learn:

• What “Scaling your Sales” looks like
• Why this is an important concept for you to understand
• When to scale your sales – and how YOU might do it
• Real examples from my clients

Who is “scaling” for?

Online stores are perfectly positioned for scaling.

Unlike a brick and mortar store, online stores don’t need a huge selection.
That’s because web visitors at most successful online stores view an average of 5 or 6 pages, and spend 3-5 minutes on the site when they visit.

On top of that, it’s common that 80% of your web visitors are viewing your site on a mobile phone.

They can’t look at all the things, and that’s why we should not try and recreate a physical store experience online.

Online store owners can be specialists. Instead of having a broad selection and a few units of each, you only need the best sellers, and you need depth in those items.

The good news is, that becoming a specialist alone makes it easy to scale your online sales.

How can I scale my sales?

First we have to clear up a common misconception.

Most of us think getting more Sales will solve all of our problems.

That’s not the case. It’s important to understand this concept.
It’s natural to think that everything will be easier when you hit a magic sales figure.
It could be $10K a month or $100K a month.

The conversation you have in your head is that “everything” will be easier when I have more cash coming in.

But the truth is that if you have gaps in your business before you grow your sales, those gaps could become so big that at best, it’s harder to run your business, and at worst, it could shut you down.

Before you scale, ask yourself this:
If I quadrupled the number of orders I receive every week, would I:

1. Have the product on hand to ship all orders immediately
2. Have the time and materials to ship all orders immediately
3. Have the physical space to store and ship all orders
4. Have the bandwidth to answer all the customer service inquiries
5. Have the cash on hand to grow my inventory
6. Have the cash and the time to hire and train helpers

Before you significantly increase your sales, it’s important to make sure You have the basics in place. If not, you’ll be scaling more than your sales. You’ll be scaling your problems.

What happens before you can scale

Are you out of the “Proof of Concept” stage?
In this stage of your business growth, you’re building your audience and your traffic.
You’re trying lots of strategies so you can figure out what works to get sales.
You start building lists and you’re getting more consistent with your marketing.
You are a “hands on” store owner, managing all aspects of your business as you learn what you need to focus on to make progress towards your sales goals.

Do you have Reliable Revenue?
Are you set up to get sales every day, every week, all year long?
Do you have a plan to get sales every month?
Have you set up email automations that are generating consistent sales every day?
Do you have systems and processes set up for managing the repeatable tasks in your business?

At this stage, you might be doing things like:

• Hiring. you are not the person doing everything
• Implementing solutions and procedures for customer service
• Outsourcing shipping to a 3PL or hiring dedicated shipping people
• You have a marketing plan for each month
• You have “go to” promotions that you know will get leads or sales

You’re ready to scale your sales when:

You feel confident that everything won’t fall apart when the orders start pouring in
You know your numbers, and you review your monthly statements
The business is profitable
You have cash on hand
You have systems, processes, and the people in place to support growth

Create a Scalable Offer

You have control over your offers and your sales. Open your mind to doing things differently.
Think about your current customers. Who they are, and why they buy your products.
Think about your current products. Identify the products that sell the “most” and “least” often.

Offers that Scale

A “Front Door” product or collection.
This is the one thing you drive the most traffic to. Think of this product as the first thing you want every customer to buy. This is your customer acquisition plan. Once you have acquired the customer, you’ll use email marketing to offer them other products.

The “Front Door” offer is highly effective because:
You become “known” for one thing, it makes your business memorable.
You have sticky messaging, because you’re focused on one product
You have one ideal customer
You can automate and perfect your back end marketing knowing that you’re speaking to one avatar.

Subscriptions
Perhaps the most common way to scale your sales. If your store has a high returning customer rate, a subscription might be a great way to scale your sales. You can offer a product based subscription, a combination of digital and product, or a subscription that is digital only.

The Subscription offer is highly profitable because:
You turn your inventory and capture your profit every month
You have one ideal customer, so you can offer simple upgrades and add ons
You control your growth and your sales using scarcity, urgency, and exclusivity

Collectables
Perfect for jewelry, Artists, handmade, or high end products. With this method, you’ll use your marketing to set the stage for people to become “collectors”. You’ll select one item to become the “starter” piece and launch subsequent “pieces” on your own schedule. You’ll use scarcity and exclusivity to curate a community of people who love and value your work, and can’t wait for your next piece to become available.

The “Collectable” offer is highly effective because:
You become known for one thing
Your product is memorable
You have a “front door” offer
You control your growth and your sales using scarcity and exclusivity
You have sticky messaging, because you’re focused on one thing.

Digital Offers
Digital offers are a great way to scale your sales without scaling your expenses. You can create a digital one time offer or a digital subscription. Your offer could include products, or it could be only digital. Use a digital offer to deliver education, experiences, and tutorials.

Digital offers are highly profitable because:
Your product cost is a one time investment
No inventory to buy or ship
You have one ideal customer
You can automate upsells and consumption of other products.

Examples of great scaling offers from our smart clients

Ann Chikahisia
Ann is a high end jewelry artist. Her Talisman is her scalable offer.
She uses this as a “Front Door” and “Collectable” offers to grow her sales
https://chikahisastudio.com/pages/talisman

Edith Minne
Edith has used short term subscriptions to scale the sales of her custom ribbons.
She’s grown her audience and customer base quickly by partnering with well known fabric designers in her industry, to create kits that are perfect for both audiences. Edith has created a “Front Door” offer and a subscription
https://renaissanceribbons.com/products/4-month-project-kit-club-webbing

Pam Rodgers
Pam uses her Mystery Polish Subscription as her “Front Door” offer to acquire new customers and scale her sales. Her fast growing low dollar subscription is so simple that it’s easy for Pam to manage, and it feeds her business with a steady stream of buyers that love her hand made polish.
https://www.stellachroma.com/products/monthly-mystery-subscription

Shannon Cates
Shannon has grown her interest based subscription box by leaps and bounds over the past 2 years. This $45 product ships to hundreds of customers each month, creating a steady stream of buyers for her other products. Shannon’s subscription is the “Front Door” offer, and she uses scarcity and exclusivity to grow her sales every month.
https://birdmoss.com/products/birdmoss-box-monthly-subscription

Natalie Santini
Natalie has created a variety of digital courses that teach her clients how to create beautiful items of materials they purchase in her shop. Natalie’s scaling offer is a fully digital product that increases her profitability every month.
https://sewhungryhippie.com/collections/courses

Your next steps:

Block some time on your calendar to do a “brain dump” of how you might create a scalable offer for your business.

Ask yourself:
What does the perfect outcome look like for you?
What could you scale that’s easy and profitable?
What’s working in your business now?
Who are your customers?
What are your top selling products / product categories?
Why are people buying these items?

Get a look behind the scenes and see how Edith Minne, Shannon Cates, and Pam Rodgers created their scalable offers.
Podcast episode:

69 Shannon Cates

111 Edith Minne

112 Pam Rodgers

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

or scroll down to get the highlights

It’s  the embarrassing little secret that ecommerce store owners don’t like to talk about.
Why do we always feel broke? It is so frustrating, embarrassing, and it causes us so much stress.

It’s important that we talk about it, because for most of us, when we get into a cash flow crunch it makes us feel like we’re failing. Like we’re doing something wrong.

It’s embarrassing, and it affects how we run the business.

Running your business when cash is tight is like trying to run your business wearing handcuffs.

It often leads to making poor decisions made out of a desire for a quick fix.

It’s a tough problem to solve, and most of us suffer in silence.

The truth is, many store owners don’t know that there’s a conflict between our sales goals and the real cost of growing a product based business.

We’re wired to want to grow our sales, and we can learn how to do this. We teach this in the Inner Circle, and it’s the exciting part of business for most of us.

But nobody teaches us the downside. That most store owners don’t know that growth is expensive, and that it has the potential to strangle your cash flow and make it really hard to run your business.

The most important thing you need to know is that it’s preventable.
And if you have a cash flow crisis, it’s fixable.

Today on the Podcast, I’m  talking about why it happens – but more importantly, how you can fix it and have more cash in your business.

Scroll to the bottom to listen, or read on… 

I want everyone who’s feeling bad about their current cash situation to reframe how you think about it.

It’s just another problem to solve. And you’ve already solved harder problems – if you’re listening to this, I’m betting that you are a problem solver.

So before we talk about how to solve your cash flow problem – let’s talk about why it happens.

Why do I always feel like I’m short of cash in my Business?

There are a few reasons most store owners hit the wall and run out of cash.

The most common reason is start-up costs.

Our industry promotes that it’s fast and easy and cheap to start an ecommerce  business.  All that promotion creates an expectation that you can start on a shoestring, and the sales will pour in.

But that’s not normal. In fact, here’s what I see; most people start their business with personal funds, or they use a line of credit, or they borrow the start-up money from family.

They use their start-up cash for things like:

• Website
• Fees
• Training
• Products
• Supplies / Tools

Basically they spend most, or all of their money getting started.

And when that start-up money is debt, most people feel immediate pressure to pay it back.

And we actually expect that we should be able to pay it back out of the profits of the business.

Here’s the problem with that:
Sales don’t roll in right off the bat. It takes time to learn, and money to pay for traffic to your store. You also have to spend money to  replace the product you’ve sold and stock a little extra for growth.

Often it takes all the money you have and then some.

And so for most everyone with this kind of cash flow crunch, they feel like they’re failing, and the business isn’t successful. Because they’re not good at it.

Your business is an investment. 

It’s like buying a house. You need capital. When you buy a house, you need a lump of cash for a down payment. And you invest that money with no expectation of getting it back quickly.

It’s a capital cost. Start up costs for your business are the same. They are capital costs. It’s completely possible that you’ll never take that stat-up money out of the business. 

Maybe not until you sell it.

But,  if you do need to pay it back, it needs to be a capital loan. You amortize it over a long period of time.You have equal monthly payments, like a mortgage. Keep the payments really tiny at first, and then you have the option of paying it down faster after you become profitable.

Doing that takes the pressure off you. You’ll treat your loan payment like a small fixed expense.

Once you understand this – you can stop feeling like you’re failing, and stay focused on running your business.

Are you growing too fast?

The other cash crunch scenario I see often is when someone’s been in business for a while, and their sales are growing fast. The problem for them isn’t sales. 

In fact, these store owners can’t understand how they can have such great sales and no money. Their cash goes out the door as soon as it comes in.
Outwardly, they feel successful – they have great sales.
Internally, they feel like they’re a hot mess.

They don’t know what to do and think they’re not good at this part of the business.

If this is you, here’s what you need to know:
You don’t have cash, because you’re feeding the beast.

We have this common perception that we should be able to finance our growth by just getting more sales. 

The problem is that the cost of your growth is more than the cash you’re generating to finance it. 

You need to constantly buy more inventory to support your growing sales, and you need to maintain a higher level of inventory every month.

What this happens, you’re probably taking the cash that you need for operating expenses and using that money to buy more inventory. You’re feeding the inventory beast.

When this happens – you look for relief from this constant shortage of cash, and you tell yourself that if you just had an extra $10K or $20K you could get ahead.

And you take a Shopify loan – or a Paypal loan. It relieves the stress, but only for the short term. What you really needed was an Investment of capital, and when you took on short term debt, you put a bandaid on a 10 inch gash.

You need to replace the inventory you sell every month, PLUS buy more, but you have even less money to do it because you’re paying that loan back every week, and now you have even less cash.

How do you fix your cash flow for good?

1. You inject capital into the business – as an investment or long term debt
2. You pare down your skus – cut out 25% of your products – so your $ aren’t spread so thin
3. You control your growth. Every month you put your landed COG into a separate account and then you decide how much of your profit you want to “invest” in your business – you can add that in too.

That’s all you spend. You will control your growth – you’ll focus on your best sellers, and you’ll sleep better at night

Here’s how to rethink how you feel about your cash.

1. If you have a cash flow problem, you are not failing. You have a viable business, and all it means is that you have a problem to solve.

    

2. Understand  the capital costs in your business. Capital costs are investments – equipment, inventory, start up costs, level up costs (moving to a bigger space), coaching, some contact services. Capital costs are investments. They need to be funded by a cash injection or long term debt amortized over several months or years.
3. Operating expenses are the cost of running your business. Ads, employees, rent, taxes, postage, your esp, apps. These expenses are often recurring. They need to be funded by the profit in your business. If you have a cash flow issue, cutting these expenses to the bone will only be a short term fix.

Next week on the podcast, I’m going to share my thoughts on how to grow your sales in a profitable way – where you can grow your sales without feeling like you’re broke.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.

New FREE Course

GROW YOUR SALES

(without breaking the bank)

Conversion School is a step by step process to grow your sales,
without spending a fortune on risky ad strategies, or discounting your products.

Works for Ecommerce stores at all stages.

Start getting consistent sales, and see significant sales growth every month.