How much money do you have to invest in your business before you will see a return on your investment? This is a question that most people will ask themselves when it comes to running any kind of paid advertising, and if this is you then this blog post is just what the doctor ordered! Let’s get into it …
I was asked this question on a Facebook Live interview that I was featured on in August of this year. If I remember rightly the guy who asked the question was an online course creator who taught people how to play the piano (or some musical instrument)
I can remember that he was charging $497 for the course which was a one-stop shop for learning the piano, and took the member from a very basic understanding of how to play chords and gave them enough skill to hold their own in front of a crowd of people. It was the basic online course setup. He had the modules with structured lessons and a few bonuses that helped the member achieve their goals a little quicker than normal.
Now I have been creating online courses for around 2 years and I happen to know a thing or two about structuring them. But this wasn’t the question. His question was in relation to a campaign he had just set up and he was trying to figure out how much money he would have to spend on Facebook Ads in order to get his first 10 or 20 members.
At this point, I asked him how much he had spent on advertising his course in the past, to which he proudly stated that he hadn’t had to spend a penny on ads. I then asked him how many students he had in his course and he replied with around 12. Lastly, I asked him how he had attracted these 12 people and what price he had charged, and he replied with something along the lines of giving away 6 places for free in order to get some testimonials and feedback on the training, and the rest had been either his current private education students and their friends and family.
I remember asking him how much he was currently spending on running his course and he was proud to say that it wasn’t costing him anything as he had set up the course within a closed Facebook group and used the social learning theme to upload all the course videos to the groups' units.
When I asked him how much he needed to make per month for him to be in a position where he could earn a full-time income from the course he replied with around $12,000. And here was his first mistake.
I would love to know when business became free and easy. When did the shift happen from having to work 20 hour days and 3 jobs just to keep your business afloat in the first 24 months? When did everything get so easy? When did the transition happen that took the hard graft out of developing an idea and believing in it when all others around you told you that you had lost your mind?
Now business is free and easy! I can take an idea and build it out without having to spend a penny of the software, platforms, or even ads that I once relied on, in order to get my project off the ground! Alas, we all know this is not the case!
Is it impossible to make $12,000 per month? Not in any way! You can make $12,000 per month, you can make $12,000 per day, you can even make $12,000 per hour if your organization has the right ingredients. But let me tell you right now that these ingredients do not include finding the shortcuts needed in order to save the dollars wherever you can.
I started my very first business at the age of 8, buying and selling random crap out of a big, yellow, free newspaper. I made myself a list of my customers in an old, school textbook and I would call them up each time I thought a product had the potential to sell. 8 years old, no money, no resources, no internet or mobile phone, just a pen, paper, and a landline telephone belonging to my mum who would only let me make calls for 1 hour after I came home from School.
I managed to sell products for $10, $60, and even a vegas style slot machine for $1,200 that cost me around $500. But was I a millionaire 8-year-old trader? Not at all. My profits were non-existent. I made next to nothing on the sale of the products as I didn’t care about making money. As long as I had enough to buy more stock from the profits I earned I was happy. I did it for fun. I did it for the challenge. I did it because there was no way on earth I was going to be in the same situation as my mum was in when I was growing up. I did it to pay for the things that I knew my mum couldn’t afford to pay for. I did it for me.
It wasn’t until I turned 28 years old that I had my very first 6 figure month. Then it took me until I was 33 to hit my first 7 figure income. That is 25 years after I was buying and selling from the yellow book!
I don’t believe in this phrase wholeheartedly, although elements of it are true. So let’s jump back to the guy with the piano course for a second.
He wanted to be hitting a $12,000 per month income from his online course. His outgoings were zero and he had everyone in his Facebook group going through his modules. The majority of his current paying members came in relation to his current private tutoring service, which incidentally he was now no longer running as all his time was taken up creating the course. Here was my answer to him …
If you require $12,000 per month from new sign-ups to your course you are going to need to spend $8,000 per month. I remember his reaction - it wasn’t great!
“$8,000 per month to make $12,000 profit! This is too much! Why do I need to spend so much money just to hit a small target?”
I call this the ‘Self Worth Bullshit Factor”. Someone who believes that they are worthy of a certain amount of money each month, who have no influence in their current market, and are not willing to exchange money to earn money. They seem to believe that they deserve money as they have spent all their time and effort creating their product so why should they now have to spend all their money. It’s the same as the people who love to say
“If I can get my first 5 members for under $200 then this will give me enough money to then scale my ads budget”
It doesn’t work like that! You are expecting to spend $40 per member, yet expecting them to spend $497 on you. What kind of relationship is this? You’re a nobody, you’re a bum, just like hundreds of other bums who are trying to sell me the same thing! And you are the worst bum of all. You are not even willing to spend any money on the product I am paying you $497 to join. You don’t believe in the value of me as you are not willing to pay to find me, and you don’t believe in the value of your product as you are not willing to invest in the platforms and resources that I need to get the best possible experience. The only person who is out of pocket in this situation is me!
So here is what I explained to this guy …
“This is what is wrong with the world these days. People seem to think that just because some college student sits in their bedroom and makes a million dollars on a Shopify store, that they are entitled to a piece of the pie. Well, guess what - you’re not! There is no way on earth I would pay you any of my hard earned cash when you are not willing to spend any of yours on your product.
So here is what you need to do. You need a dedicated online course platform. Something like Kajabi.com that will give you everything you need in order to host and market your course. You need ClickFunnels.com as this will strengthen your sales funnel. You need to be running ads on Facebook, on Instagram, YouTube, Google Adwords, and more. You need to be visible on all platforms at all times.
Then you need to think of your payment processing fees. Your payment transfer fees. All this costs money. Get this sorted out as a priority and then start launching your marketing funnel and test your market. How do you know your product is any good when the only people who have been through it are the people you gave it to for free and your current private tutor students? Obviously, they are going to go through it. What about the real people? What about the cold audience?
It angers me. It frustrates me. It annoys me that I am here writing blog posts and making videos, writing books, traveling halfway around the world to host business shows, creating podcasts, presenting business TV shows, writing in magazines, yet these people think that they can set up a Facebook Group and make a 6 figure yearly income just because they have ‘seen’ others do it. They haven’t seen anyone do it. They have seen the gurus telling their audience that they have made a shit tonne of money from doing nothing but reading books and now they can do the same too by joining their programs.
Let me give it to you straight. If you want to make $10,000 per month then you must be willing to spend $10,000 per month. It is that simple. Want to make $50,000 per month? Spend $50,000 per month. The worst that will happen is that you will break even, but you will have one hell of a product that sits at the end of one hell of a funnel!
Let me let you into a secret. When I launched the Inner Circle Mastermind at the beginning of the year I made over $80,000 in 3 days. This was a $497 launch and I had over 120 people buy. Why did so many people buy? Because I gave them x3 2-hour calls per month EACH. I worked my ass off. I was on the phone to my students from 10 am until 1 am some days, Monday to Friday, every single week. Why did I do this? Because I am willing to put in the hard work and effort needed to build influence in my industry. I am willing to invest in myself and my business to get where I want to be.
Is it so hard to go out and grab yourself a 9 to 5 for 6 months in order to build up a few thousand dollars to put into your business? Do you believe in your idea enough to do this? Are you willing to go and do whatever it takes to make sure you succeed?
Because let me tell you a hard truth right now - if you are not willing to invest in your product, don’t expect anyone else to!
Me too. Just because I have money doesn’t mean I am not desperate for more. And guess what, over 90% of the world's population is desperate for money. This is life.
Here is the truth of the matter - you are not desperate for money right now unless you are reading this blog post on your commute to or from work, sat on your lunch break, or struggling to keep your eyes open whilst in bed. Do you understand what ‘Desperate’ means? Do you understand that people who are desperate for water are drinking from infected, poisonous streams just to survive? Families desperate for the health of their children are traveling around the world on the smallest of chances that they will find a medical professional who can save their child. This is desperation!
If you’re about to lose your home, if you have people knocking on your door demanding to take your possessions unless you pay what you owe, if your car is about to be repossessed, if your relationship is about to end, if you are about to go through the worst situation of your life and you need something to happen in your business then why have you let it get like this? Don’t tell me you have tried everything to stop it because you haven’t. You have tried nothing unless you have worked 3 jobs, sold all your possessions, borrowed whatever you can, worked your fingers to the bones!
If you think you are desperate right now then take a look at what you are reading this post on. iPhone? Macbook? Desktop? Tablet? What is your favorite TV show? When is family time? What is cut off time?
I was 6 years old when the bailiffs came to my mother's door and took everything! They took our TV, the chairs, the sofa, the tables, the ornaments, our stereo, my bike. We were left with nothing at all. I told myself this would never happen to me.
In April 2002 I was about to turn 20 years old. I had sold my manufacturing company and I had been an idiot with my money. I had nothing left, and more going out of my bank than I had to come in. Then I had a knock at the door. When I answered it was a bailiff. I had no paid my Council Tax and I owed around £1,000. I remember the guy in his suit trying to get me to let him into my house, telling me he had a warrant to enter and take my possessions. I had a conversation with him and bought myself 3 days.
I sold everything. My TV’s, my desktop computer, my mobile phone, even my house phone. Everything other than the basic essentials. I generated around £1500 by the 3rd day when the bailiff came back around. This time I invited him in, asked if he wanted a coffee. I remember him walking into my living room and looking around, taking note of what I had left and writing it down in his book.
He didn’t sit down, he just stood by the door and told me that he was going to arrange collection of my things. I told him that there was no need and handed him the cash that I owed. I will never forget the expression on his face! He took the money and left.
So I had £400. No TV, no phone, no computer. So I bought a pair of second-hand ladders, got myself some buckets and cloths, printed myself some flyers from the local shop and walked the streets, knocking on doors and asking them if they wanted their windows cleaning. To cut a long story short I sold that company to another window cleaner within the first 6 months for £3000, bought my first Apple computer (and never looked back) and set up my affiliate marketing company.
I needed money. I did what I had to do to get out of the situation I was facing. Yes, my situation was minimal compared to others, but my solution was key. If I had owed £15,000 I would have sold everything, worked 3 jobs, loaned what I could, cleaned cars, windows, carpets, whatever I could do to ensure that I got myself out of the situation I was in.
But what I wouldn’t do is take the smallest amount of money I have available and put this into my business and expect all my issues to disappear!
If you take nothing else from this blog post today take this - If you are not willing to invest into your business a minimum of the same amount of money that you have spent on the shit in your house, the holidays you take, the rent or mortgage you pay, the subscriptions you have, the luxuries you purchase, then stop right now as you don’t deserve to be at the top of your company.
Take some responsibility and stop thinking that you deserve people to pay your company when you are not willing to pay for it yourself.