#65 The Day I Realised My Business Wasn’t Actually Viable

iniartworksmallToday I realised the business I have been focusing on and try to grow for the last 2 years may not actually be a viable business.

In the last episode, I talked about how I had lost my niche, but it was actually a lot worse than that and my business was in a way worse situation than that. And it’s still kind of is in a really bad situation. That’s what I’m going to be talking about in today’s episode of Instructions Not Included.

How I came to understand that my business wasn’t in fact viable and wasn’t going to help me achieve my goals and then what I’m doing to kind of get myself out of that hole and to convert my business into something that is actually going to help me achieve my goals. Because, obviously, we’re in business, we’re in online marketing for a reason.

We want to generate a certain amount of revenue, a certain amount of income and live a certain type of lifestyle. And so, for me, I guess the ultimate goal for me is to earn about $100,000 in revenue or $75,000 a year in take home profit that I can live off, but then I also have the caveat that I want the majority of that income to be semi-passive income.

So I don’t want to be doing a lot of work in order to generate that income. For example, I could do consulting and work with local businesses.

I could do client work and setup websites for people, but that could generate me and help me achieve the $100,000 a year, but I’ll be working full time in order to achieve that. However, I’ve got stuff like my membership site, like Property Tools, like On Property Plus that requires little upkeep and little maintenance and that’s the sort of income that I want to create.
Alright, so let me take you on the journey that I went on to discover that my business wasn’t viable. And then, let’s talk about the steps we’re taking to turn that around. I think this is going to be a very important episode for me.

It’s a very important episode for a lot of people to actually do this stuff first and understand what you’re doing in your business so you don’t go 2 years like I did before you realise, “Hang on, the path I’m going down probably isn’t actually viable.” Okay, I worked on Sunday because my wife was away on Friday and I took care of the kids. So I took a day off Friday and I worked on Sunday. And what I did on Sunday was that I went through the past history of my membership site, so I’ve got two.

I had On Property Plus where I find positive cash flow properties for people. And then I’ve got Property Tools which is a calculator to help people calculate whether or not a property is going to be positive cash flow. So On Property Plus goes back about 18 months. Property Tools goes back about 5 or 6 months.

So I looked at those and focused mostly on On Property Plus, which I had changed the name to On Property Listings, but it’s going back to On Property Plus, we’ll get to that in a second. Basically, I went through my stats, all the way back for 18 months.

I looked at it and I realised that in the space of 12 months, in terms of monthly members to On Property Plus, I’ve gone backwards. So in the last 12 months where I think my business is growing, traffic on the website is growing, monthly subscribers to my main membership site, my main source of income, have gone backwards by 4 customers. And my income had gone up a little bit by about $270 or $280 or something like that. So imagine, in 12 months, working in your business for 12 months and you grow your income by $280 a month or $3,000 a year, is basically what I was looking at.

So what I realised when I looked back was that in the course of the year, 90% of monthly members left the service. And so, basically, every single year, I’m starting from scratch. Every single month, I’m starting from scratch to get new members and to get revenue coming in.

In terms of the goals that I had, I’m likely to achieve that. We’ll get to that in a sec. I also looked at annual subscribers and this was a little bit better, but only 30% of those stay around when it comes time to renew their membership.

I didn’t have as much data on annual members because, obviously, it takes longer for them to churn. But from what I can see, about 30% of annual members renew their subscription a further year. And so, with this knowledge in hand, I was really realising that even though I have a subscription business, not many people are staying around. And so, I can’t just focus on getting new customers and my business is going to grow as a result of that. Basically, each year, I need to get all brand new customers for my service. So that was the first realisation.

The next thing that I did after having this realisation was I went back to modelling my products. And so, I looked at the income that I wanted to generate and I’m looking at, “Okay, based on different price points, how could I generate this income?” Let me just bring it up on my computer so we can talk through this together and it’ll make a lot of sense to you. I’m just going to log on to my spreadsheet. Basically, what I decided was that for On Property Plus, I wanted it to achieve $60,000 per year.

I figured Property Tools will probably make anywhere between $5,000 and $15,000 a year. Then there’s extra affiliate stuff like my affiliate deal with Ben and then extra sites and stuff like that on the side as well. I just thought $60,000 for On Property Plus is the goal that I’m going for.

Let me bring up my modelling page. I was looking at all different price points. So recently, I had raised the price from $300 a year to $480 per year. I was looking at, “Okay, how many sales would I need in order to achieve my goal of $60,000?” remembering that the majority of people are actually leaving every single year. And so, I was looking at my goal of $60,000 and at my previous price point of $300, I would need 17 new subscribers a month to achieve that goal. And when I looked back over my statistics, my best month was 17 in the one month. Most of the months were more like 7, 8, 2, 13.

It went up and down, but my average was about 7 or 7.5 and I needed 17 every single month in order to achieve my goal because people are leaving every year. So I’m looking at this and I’m like, I haven’t had a new annual subscriber in the last 2 months at the current price, which is $480 and I’ve had a few monthly members, but they’re going away every year. So I’ve decided, I really want to focus on annual subscribers.

I think that’s the easiest way to achieve my goal and so I was looking at different price points. At $100, I would need 50 new subscribers per month. At $200, I would need 25; At $300, I would need 17; At $400, I would need 13 and at $500, I would need 10 new subscribers per month. And so, I was looking at this range, I thought, the most achievable is the $200 to $300 range. $100 is too cheap, I need too many. Between $200 and $300 or 17 and 25, is something that I could probably aim for. Really, I was thinking about this and I’m like, “Yeah, I can’t achieve this. This business isn’t going to achieve the goals that I thought it was going to achieve.”

I realised that as my website traffic was growing, the income wasn’t growing with it. And so, I can’t just focus on growing web traffic in order to get more sales. There is one saving grace for me, though. And that’s the fact that looking at my data, about 30% of annual members re-subscribe. This means that my goal of 17 per month can drop down to 12 per month if 30% of people stay. So, 12 per month is more achievable – it’s only 5 off my regular goal. So what I eventually came to and I had a long discussion with my wife. We’re talking through what are we going to do? What should we look at? There was a few conclusions that I came to

. The first was that On Property Plus isn’t going to be the runaway success that I had hoped it would be – that would eventually generate over $100,000 a year by itself. That’s just probably not going to happen. So that was the first big realisation.

So then, we’re just looking at, okay, rather than thinking about this as a recurring product, even though I would still sell it as a yearly subscription or monthly subscription. I really need to look at this as one-time sales moreso. And so, realising that, looking back over the data, I did an experiment for a couple of months – I think about 3 or 4 months this year where I turned off On Property Plus. So it wasn’t available to the public, but what would happen was each week, a new cohort of people – and a cohort is just a small group of people, about 100 people, would go through a sales funnel like Jeff Walker talks about.

So they go through 3 free videos then there’s a 4th video, On Property Plus opens for them for 5 days and then it closes. So a bunch of people go through this every week and when I looked at my data, my biggest month was when I was doing this experiment, that was 17. And also, the majority of those months were quite good and quite high in terms of the subscribers that I got.

I’m just wondering if I can find it and show you guys. When we made this change, which was May in 2015. In terms of new customers, we had 15 one month, 17 one month, 8 one month and 6 one month. But then, before that, we’ve had like 7 one month, we had 16 then we had 2, 2, 3. So on average, it seems to be higher.

What I could tell from the previous experiment that I had done is actually this is probably the best way for me to sell On Property – is to close it down, have this evergreen launch funnel where people only get an opportunity to join for about 5 days and after that, the opportunity closes for them.

I can also supplement this maybe twice a year or something like that where I can open it up to the public and do a bonus offer and things like that. Something that I haven’t done in the past, but something that I would definitely explore moving forward now. So if I look at this and I look at 15, 17, 8 and 6, the goal of at least 12, but hopefully 17 per month is probably achievable.

If instead of focusing on more traffic, I actually focus on conversions. Conversions from my website to my email list and then also conversions from the email list into On Property Plus members. So that was the second big thing.

First big thing was we realised that it’s probably not going to be the money-maker that we thought it was. And then, the second big thing was that the best way to sell this is probably through the evergreen launch funnel. So we need to reactivate that and go through the process of reactivating that. Since last time, I’ve moved from Ontraport, where I was previously hosting this to Convert Kit. And to actually run this evergreen launch funnel was a bit harder in Convert Kit.

I had to word out how to do it and maybe I’ll do a tutorial on that in the future. That’s the point right now. It’s that, okay, it’s not going to be the money maker that we thought it was, but if I launch this evergreen launch funnel, then potentially, we can achieve our goal of $60,000 on this product each year. Instead of focusing on new content and driving more traffic to my blog, I’m instead going to focus on conversions. So converting the email subscribers more, getting more people to sign up for my email list and so forth.

So, yeah, we had a big realisation that the plans that I had weren’t moving us in the direction that we thought that we were going to get. I actually thought my saving grace would be Property Tools, which is $5 a month or $50 per year. And then when I looked at that and I’m looking at average churn for that, they say a churn of 5% is good and churn of 2%. Churn is the percentage of customers leaving each month. So churn of 5% is good. Churn of 2% is world class.

My churn, some months it was below 5%, some months it was over 5%, but basically, I think my churn is going to be around 5% or a little bit higher. For me to even achieve $50,000 per year from Property Tools, I would need 1,000 members and if I had 1,000 members, my churn at 5% would be 50 people a month. So that’s 50 people a month that I would need to replace and I’m getting about 10-15 new customers a month. So to go from 10 to 15 to 50 with Property Tools is probably not achievable.

I always thought, that long-term, Property Tools will be my saving grace and that it would be the best long-term generator of cash, but now that I understand churn, I understand that Property Tools will eventually cap it up and it’s going to be probably be nowhere near that $50,000 year example that we just talked about.

So that’s not going to be our saving grace. On Property Plus wasn’t moving where we wanted it to. So this week, I’m just working on converting On Property Listings back to On Property Plus, providing everything that I did previously in the past so people get access to courses, to calculators, to all that sort of stuff. So it’s back to being a membership site, rather than just an email that gets sent out to people. So I’m all the way back to where I started, which was back in September, a few months ago and I basically got the same strategy.

It was really good to realise this stuff, but also really painful to realise it as well. So I definitely recommend that you go through your stats, and then model forward and say, “Okay, how many units do I actually need to sell to achieve my goals and is that actually achievable?” Because for me, it wasn’t really achievable unless I make some drastic changes. And for me, that’s converting to this evergreen launch funnel. And then also focusing on how to increase my conversions as well.

By doing this, by doing the modelling, by understanding that this business probably isn’t going to be what I thought it was, actually gave me some really good action steps that I can take to improve the chances of me generating an above average income from my business.

Another thing that we decided as well is that On Property is probably never going to be the home run success. And so, for me to generate a full time income online above that $100,000 revenue that we talked about, I’m really going to need to start diversifying into other niches. Dreamy Dad was the start of that with talking about night terrors. But that’s probably not going to be a very big site so I need to explore other things that I can do. At the moment, I don’t have any ideas.

I am thinking about doing some tutorials on how to setup a website, how to sell your own products, that sort of stuff and make some money through affiliate commissions, but I haven’t done the research to understand how competitive is this market. Can I compete in this space? Is it even worth doing? At the moment, I’m not 100% sure. I’m just going to try and get On Property set up so that it’s ticking away. And then, I’ll try and find some other niches and see what I can do.
Big realisations this week. Big, big, big changes in my business. Kind of depressing to realise that what I’ve been working on for the last 2 years probably isn’t going to achieve the goals that I have for myself, but at least now I know and I can move forward and try and find a way to achieve my goals. At the end of the day, that’s what it’s about, hey? We run our own business, we learn these things and we’re constantly adjusting to try and achieve our goals.

I hope that this encourages you to go and look at your product. Go and look at your business model and to say, well, is this actually going to help me achieve my goals or not? And then see what action you can do to actually move you towards your goals.

I’ll keep you guys updated with how I go moving forward. Different niches I decide to go in, etc. and how my business evolves. I hope this has been interesting. This has been a super important realisation for me. This will be a very important episode for me to look back on and to realise the mistakes that I made and to stay focused on business that will actually move me towards my goal. I hope that encourages you guys.

This episode is sponsored by Snappy Checkout, which is, I think, the best way to collect payments and to deliver your products. To collect payments for your products and I use it on all of my sites. I use it for every product that I sell. It’s got a great backend system to track all your sales and things like that, integrates with Stripe.

It’s really affordable as well. So go to pelt.co/checkout. So pelt.co/checkout to go and have a look at Snappy Checkout today and I definitely think it’s the best way to sell your own products. And I’m working with Mike, the owner there, to actually work on a one-click upgrade. So you sell a product and then they go to an upsell page and then with one click, they can be charged and get access to the upsell. So that’s something that we’re working on together.

Hopefully, we’ll have that together soon and I can start working on some upsells and things as well, which can just add a little bit to my business. So, again, go ahead, check it out. Go to pelt.co/checkout. That’s my affiliate link and it helps support this show and helps support what I think is an absolutely awesome product. So until next time, guys, stay positive.

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