Valerie's email archive
December 30th: I became the worst boss I ever had (oops)
I'm sending today's email because you need a biz you can rely on before I can help you protect it! Here's how I got there (and you can too).
In the spring of 2014, I went on antidepressants.
There I was, six years into my career, and I *still* couldn’t get it together. Work felt all consuming and had taken over my life. I couldn’t stop thinking about it, or the fact that I had about thirty years left.
I didn’t know where I stood with my boss (and therefore, my future as a partner in the firm was questionable).
I had zero client contact, was working on super-specific (and otherwise useless) legal issues, and basically, except for money, everything was wrong.
When the meds kicked in, I was able to turn off (what my dear friend calls) the F*** My Life Chorus. I got really clear, really fast.
I quit. I thought I had a plan, but to keep this short, let’s just say I did not.
Fast forward to spring of 2016. I was “successfully” self-employed!
And by that, I mean that I was scraping together an income doing work I had not intended to do, for people I really didn’t care for, at all hours of the day, with no time to work “on” the business instead of in it, and without a vision. (I’ll share my abysmal financial results on Thursday).
In other words, I had become the worst boss I ever had at the worst job ever. Wasn’t this exactly what I was trying to avoid in the first place?
I decided to join a business coaching group to help me fix it. The coach pointed out my mistake, and it is one that I see business owners make day in and day out now that I am aware of it:
I thought that being a lawyer is a business model. It’s not. Just like coaching is not a business model.
What’s a business model?
It’s the intersection of the ways you get your clients and deliver your goods or services.
Lawyering is just the service. Coaching is just the service. They aren’t even the delivery method, which can be a hundred different things.
Where the clients will come from, and how they will get their “stuff” from you, is what makes it a business.
Before I can help you protect your business, you’ve got to have one. And that means choosing a business model.
Because I know you’re going there, just know that business models can evolve.
For example, in my local practice, we started by giving free talks to encourage people to set up in-person consultations, and then we performed the services ourselves. That built revenue so we could switch to paying for ads instead of giving live seminars and hire staff to help us do the work.
Many people spend lots of time on their “elevator pitch” about who they help, but never go to the next step.
So, I ask, what is your business model? [Mine used to crossing my fingers and posting a quote or two on Instagram before I understood that people have *no idea* what I do, let alone why they need me].
If you aren’t sure, here are three examples:
I was in business for *years* before I understood this concept. Once I did, everything clicked.
One last thing. Don’t choose a model because it seems like it is working for someone else.
If you hate selling on the phone, choose something else. If you don’t want to do one-on-one sessions, offer something different. The possibilities are endless, and you just need one winning combo. Otherwise, you'll end up being your own worst boss ever, doing a job that stinks!
January 2: My savings disappeared before I realized I was only making $1,000 per month
I’m so embarrassed to tell you this next part, but I sincerely hope it helps someone out there. At the end, I’ve given you the legal resources you need to quickly implement a simple business model that works.
Here goes:
By choosing a business model – just one to start – my business would have done these things for me right away:
Remember, I left my job to live an intentional life, but I was totally unintentional in my business from the very start.
I took clients because I was scared, not because they were aligned with my goals. I charged prices that got people to say yes but which were totally unrelated to how much I needed to live.
Sound familiar?
This is the “hope” method of doing business, which involves posting randomly here and there, not making clear offers consistently, and discounting the importance of a sizable email list.
In hindsight, if I knew then what I know now, here’s what I would have done (and by the way, if I lost everything tomorrow, this is exactly what I would do to rebuild).
I would ask myself:
How much are my personal expenses per month?
How little do I want to work?
What is a no-brainer one-on-one offer I can sell, that even if it isn’t my “signature,” that would be enjoyable to deliver and would teach me about my audience’s biggest needs and wants?
How quickly can I get a freebie together?
How quickly can I put together a 3 to 5 email welcome sequence inviting people to a call?
How much will qualified leads cost me?
How many people can I sell into my offer?
How much is my tax rate?
A few things to note:
I know this sounds super boring, but this is just to start!
There will be plenty of time to get more complex to reach your big picture goals once you have consistent cash in the door. Without consistent cash, you are too busy to build the business of your dreams because you’re chasing down the wrong clients and delivering work you don’t want to do.
This is based on one-on-one work to start – it’s the best way to hear what your ideal clients care about and you don’t need a large audience like you do with “evergreen,” low ticket offers.
[I put my “answers” at the end of this email for those who are curious. Next week I’ll explain the numbers I used, based on industry standards I see inside many entrepreneurs’ businesses and my own experience.]
Now for the legal part. When you set up a little cash machine like this, you need some legal basics in place (all links to the free membership site. If you forgot your password, go to delgrossolaw.com/recoverpassword):
With this plan in place, you have about one call a day, and the other 22-ish hours are free to take care of yourself and build the grander vision. Not bad!
Here’s the really embarrassing part. I wish I had known what’s in this email before I blew through about $60,000 in savings, which were hard-earned at the job I hated.
When tax time came, I realized I had basically been paying to work so hard on stuff I hated for clients that were not ideal, because I had no business model to guide my offers, to bring ideal clients to the top, and dictate my pricing.
I guess you could say I’m “lucky” that I had that kind of money to waste, but really, all it did was prolong the agony. It wasn’t until I was down to my last $2,000 that serendipity stepped in, in the form of the fantastic business coach who identified my mistake and whipped my business into shape.
[You can meet her live later in January, by the way. We are going to do a presentation together on exactly how she built my biz with me. Watch for the live webinar emails.]
This is getting super long, but I want to end with this:
I thought I would have to go *way* outside my comfort zone (pushy sales-ey and constantly on social media) to get seriously successful. In reality, the only comfort zone I had to step away from was thinking that my business was going to magically work because my products and services are great (if I say so myself!).
I had the good fortune of someone stepping in to help me actually get those products and services in front of my audience consistently and in a way that makes me feel excited to do business. I believe all business owners can have that, and it starts with One. Simple. Model.
– Here are my answers to the questions above, which tells me how many leads I need to get and how much revenue I would need to earn to make my business work if I were starting from scratch.
Personal Expenses $3,500 per month, with tax rate 20%. I need to earn $4,375 to cover taxes and expenses.
I want to work just a little to cover my expenses so I have ample time to build bigger programs I can offer to groups to make more money, more easily, later on.
I could sell 90 day, one-on-one programs with high value at a reasonable cost.
One day to get my freebie and landing page together.
Leads cost $3.50 in my industry. Landing page software is $97 per month.
2% of people will take me up on my offer.
Result: I would need to make $5,172 to put up a landing page, get 200 leads, to get 20 phone calls, to sell four packages that will cover my taxes and personal expenses. If I sell four packages at about $1,300 each, I will break even, and at $1,500, be able to put about $1,000 away in savings.
January 6: There is literally only one way to do business (I paid $92k to figure this out)
After I joined my first real business group coaching program, I learned that there is only one way to do business. Here it is:
You have to get qualified traffic to irresistible offers.
The possibilities for how to get traffic, or which offers to make (and how to deliver them) are endless. But I didn’t understand this simple formula, and therefore could not diagnose why my biz wasn’t working.
For example:
If you have a great offer, but are not seeing sales, it is either because you do not have enough traffic (in other words, people seeing the offer) or the people seeing it are not qualified (ready to buy).
If you have tons of traffic (think big list, lots of social media followers), but no one is buying, the offer is not resonating with that audience or you are not presenting the offer often enough.
This simple formula can reveal big weaknesses in your results.
In my business, I realized I had nowhere near enough traffic to convert a meaningful number of sales to support a sustainable business (and me). Moreover, I didn’t have a system in place to consistently drive traffic to my offers.
In this email, I’ll explain the types of traffic and why there is a cost to even “free” traffic.
On Thursday, I’ll show you how to use your chosen traffic method legally. Then, later in the series, we’ll look at different types of offers and the pros and cons of each.
There are only three types of traffic, and you can choose the right one for you based on how quickly you need to start making money:
The fastest way to get traffic is using paid ads. You turn on the ads and can quickly see what is working, which audience is resonating, and how much a lead costs. [On Thursday, I’ll break down my ads numbers for you (along with other metrics) so you can see how this works in practice without a huge ads budget).]
A medium fast way to get traffic is using referral methods. Hosting a joint venture webinar with someone who has a large list, and splitting the profits, is a no-money-upfront way to get traffic. Of course, you have to split the profits with your co-host, so the new clients are not “free.” Often, this can be a 50-50 split, so the business model has to work for this. One-on-one is not usually an option. However, using referral methods is a great way to get a quick burst of cash in the door that lets you do other things to scale. [Check out the PS line below if this interests you]
Finally, “free” traffic, can take a few forms.
The first is what I call ”manual.” If you are just starting out, you may spend time in Facebook groups starting conversations with potential clients. This is time consuming, which in my book is not free. It is also so unpredictable, and I am way too impatient and scared for that!
Second, if you have been in business for awhile, you’ll see clients sending other people your way, which is great! But it takes a long time to be able to rely on just word of mouth. Once you can, bam, you have truly free traffic.
Third, once you build an email list, being able to market and give value to that list is free (after the initial cost of building that list). The nice thing about having the list is that the people on it will tell you exactly what they want, which makes creating irresistible offers a breeze. In other words, your traffic is very qualified, and your offers are all the more irresistible.
Nowadays when I write marketing plans for my own businesses, I focus on paid traffic first, so I can quickly test my offer and selected audience. I focus on manual free traffic last because it takes so much time to build a reputation, and I want to be sure that before I spend all that time, I have an audience that actually wants my offer.
If you want to know that you can be out of your job or hit a certain revenue figure in X amount of time, I encourage you to consider paid and referral methods to get you going. These methods are more predictable, both in terms of results and identifying what’s actually working.
With free traffic, there are more factors dictating a purchase decision, so it is harder to pinpoint what’s not working.
If you are evaluating your business model, I hope this helps you decide whether it is more important to you to save money or time (a very personal decision about business building) in hitting your revenue goals. I’m here to say, hitting them is possible when you’ve got traffic going to irresistible offers.
January 15: Here are the industry norms so you can calculate how much you need to earn
You need qualified traffic to irresistible offers… that you can deliver at a price that is more than the time, money, and energy you have to put in.
When you can charge more than the cost of doing business, your business becomes predictable (in a good, reliable way!) and scalable. Plus, getting really clear and honest with yourself about the cost of doing business means your proper pricing reveals itself to you.
So what’s a business owner to do if you are not quite sure the cost in time, money, and energy to deliver?
I’m here today with some industry standard numbers that I see over and over again in successful coaching businesses (and some of my own figures, too).
After the numbers, we'll look at how to apply them and what to do next.
Cost of Getting Traffic (email subscribers or webinar viewers)
The cost of leads using Facebook ads is about $3 to $5 per email subscriber.
The cost of leads gained from participating in a giveaway is about $2. You usually have to have an existing list of 3,000 to 5,000 to participate and can get between 250 and 750 new subscribers depending on the quality of the giveaway.
The cost of leads generated by hosting a giveaway are usually about $1 at most, and you can actually profit if you set up a VIP option properly. You can generate about 1,500 leads pretty easily hosting a quality giveaway.
If you host a joint venture webinar with a person who has a big list, typically you pay them 30 to 50% of your sales generated, but you may not build your list much.
Cost of Conversions
About 1% of people will purchase a mid-ticket (about $600) tripwire offer. This is a limited time offer that appears on a thank you page after a subscriber downloads your freebie.
About 1% of people on your email list will purchase a highly targeted offer that is marketed to them three times.
About 2% of people on your email list will purchase a highly targeted offer that is offered through a full blown launch (social media, lots of emails, etc.).
About 25% of people who get on a sales call with you will purchase.
About 30% of people who actually watch a webinar will purchase, and about the same number who watch a live-from-stage presentation will, too.
Costs of Services to Do It For You
Facebook ad management runs from $500 to $1500 per month plus ad costs. For seven figure businesses, the monthly fee typically starts at $3,000 and can go way up depending.
It costs about $150 to participate in most giveaways.
It costs about $2,500 to have a service provider handle hosting a giveaway for you.
It costs about $1,000 for copywriting of a sales page, and about $75 per email to have someone write your launch emails.
Creating a Biz Budget
If you are using paid media like Facebook ads as your regular business model for getting traffic, most businesses try to limit their ad spending to no more than 30% of gross sales. That leaves the other 70% for profit and expenses.
If you have your traffic to offers model running like a well-oiled machine, your profit (the money that goes in your personal bank account!) can often range from 12% to 30% of gross sales. For products businesses, these profit figures are likely to be lower.
How can you use this information?
I hope this information helps you see that there are “hard” costs to doing business, and that, as a result, you have to charge accordingly. Trust me when I say I work on the mindset around that all. the. time. Knowing my numbers makes it a lot easier. After all, I don’t want to work at a loss, and I bet you don’t either.
But also, you can make some concrete decisions and plans. For example, if you want to profit $5,000 selling a mid-ticket offer ($500 in this example), you could look at your cost of doing business like this:
$5,000 profit requires a minimum of 10 sales at $500 each.
If you are offering this product to an email list in a full launch (converting at 2%), this means that you need a list of at least 500 people to get 10 to buy.
If you only have 250 people on your list now, you need to get another 250 people. If you decide to use Facebook ads, these leads will cost about $3 each, or $750 total. That means you need another two sales at $500 each to cover that cost, with a little left over.
If you decide to have a professional copywriter make your sales page more effective, at a cost of $1,000, you need another 2 sales, which requires about 100 more email subscribers to convert. Need Facebook ads to get those? See above.
There are other costs to doing business, too, which you should figure in, such as your email software, website hosting, and the like.
January 21: This is exactly how my most successful client this year went from zero to six figures in four months
I want to show you how my most successful client of 2019 went from zero to sixty in no time applying the principles we have been talking about, plus I’ll link to free legal resources so you can do it, too (with protection).
Case study:
My client is a licensed professional service provider who also offers coaching for other professionals like her.
Step 1: Build an audience with similar interests. She started a free Facebook group for those professionals, initially to commiserate about the difficulties of the profession, but ultimately to build an audience of people who are interested in fixing their situation.
Related free resource: Have a Facebook group? Here’s what you need to know.
Step 2: Offer a freebie to that audience, and offer a phone call to a one-on-one coaching package. In this case, my client offered a pdf showing her revenue breakdown from her professional services versus coaching, and a simple business plan for the coaching side of the business.
Related free resources: Payment script for taking payment over the phone and what you need to know about refund policies.
Step 3: Capture the language of the one-on-one clients to build a self-paced course that addresses the clients’ biggest concerns. My client listened very carefully to what these one-on-one clients were saying, which made it a breeze to identify exactly what topic her course should be about and how to speak to prospects on her sales page.
Related free resources: How to make sure you are not over-promising on your sales page to avoid legal trouble
Step 4: Share your sales page with your audience and go live to talk about the offer. This is where my client hit it out of the park. She knew her audience’s pains and hopes so well because she had taken the time to be paid to listen (in her one-on-one sessions). She kept the cart open for two weeks and made herself available as the solution. About 80 sales later, and she knocked her own socks off and collected six figures.
Related free resource: Here is how to craft a terms of purchase document so your client knows exactly what they are getting (and to protect you from chargebacks)
Bonus: She ran the first version of the course live so she could update it in real-time with problems, suggestions, and feedback from the group. Now she is preparing to offer it on a rolling basis through automated webinars and all the fancy tech you hear about!
I hope this email helps you see that you can choose *one* plan to get from idea to sustainable revenue, before having to get complicated.
January 30: The only three ways for clients to find you (plus legal protection for each one)
As you know, I spent years spinning my wheels, wondering why no one knew who I was or cared about what I was doing, even though my stuff is really good!
I had no idea about the traffic to offers formula, and I definitely did not know that I needed at least one, solid, and consistent way to get people interested in my work.
Webinars? Ads? Joint ventures? Word of mouth? Social media?
I settled on a little of everything, and that got me approximately zero results. The good news and the bad news is that successful businesses have their traffic formula nailed down, something that is simple but perhaps not easy (at first).
My first coach simplified things for me, and I hope this will for you, too.
So here are the only three ways to get traffic (eyeballs on your offers):
That’s it!
And here’s the thing. None of these methods is “good” or “bad,” just different.
Manual traffic takes a long time to get, so what you save in money, you may lose in time. It can also be sporadic. But when you get enough manual traffic, especially in a service business, you can hit crazy high profit margins. Manual traffic is also usually a product of being recognized as a major expert in your field.
Related resource: Before you make health and wellness claims, check out these special legal issues for health coaches.
Paid traffic is blazing fast and more predictable. Put in X and get out Y (so long as you have an offer that the paid traffic is seeing. Side note: I once spent a bunch of money running a webinar that offered a free phone call with me… and then I had nothing to sell on the phone. Facepalm moment!).
Related resource: How to run Facebook ads, legally! (This is a challenge I ran last year, with 3 videos).
Affiliate traffic is medium fast (have to build those relationships), but saves you time figuring out how to find where your ideal clients are hanging out. If you are a health coach for people with gluten sensitivities, for example, you might partner with someone who has a big list of people who signed up for gluten free recipes. Using ads to find people interested in gluten-free lifestyles could be more difficult.
Related resource: Here are the rules around affiliate relationships
I mentioned in earlier posts that I really like to start a new business or product with paid ads because I can succeed or fail fast by testing my offer in front of big audiences quickly. Once I am sure the offer is interesting to people (and that I like delivering it), I work on other methods.
March 3: Making the switch (legally) from time for money to expertise for money
March 10: Protecting your program content from thieves, wannabes, and cheapskates
March 30: Are you making illegal promises on your sales page?
Coming soon: True Tales of Coaching Client Nightmares (and how to avoid this)
Coming soon: The Ultimate Client Agreement
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