Ryan McLean : Slightly Unconventional

#37 Product Modelling To Fast Track Your Business Plan Mon 17th Aug 2015

I learnt a technique from James Schramko on product modelling. It gave me HUGE insights into my business and is a great way to fast track a business plan.

Hey guys! Ryan here from Instructions Not Included and last week was a pretty hectic week. I do not think I even got around to recording one episode. Did I do one on Monday? I cannot remember. But basically I made a promise to myself that I would never go and backdate episodes and so I will never let a buildup of episodes happen because if that happened then Instructions Not Included becomes a chore.

It becomes an effort. So basically you guys get this, I am trying to do it each day when I am working but sometimes I just do not get around to doing it or sometimes I forget to do it. And so when that happens it just means you guys miss out.

So this one will probably be a bit of a longer episode where I talk about some of the things that happened last week and some of my plans moving forward which as you guys know change absolutely every week. That is part of running a business, a lifestyle business where you just make stuff up every single day like I am creating value basically out of nothing every single day. And so things change and my life changes and I have 3 kids and so things are constantly changing, constantly different and so I guess that is why I change things.

One of the big things that happened last week was, I was listening to a podcast, I think it was on Tuesday, by James Schramko. He is over at SuperFastBusiness.com. I think I spoke about him before because I really do admire his business and his work ethic like he works hard but he works super smart and he does not believe in the whole hustle, hustle, hustle game. You know Gary Vaynerchuck, who I also really like.

He just preaches hustle work in 16 hours a day, 20 hours a day and that is not me. And James Schramko just talks about running a business that has a high impact, that you enjoy but also go surfing every day. Live your life, spend times doing things and create systems so that you do not have to do it all yourself and hustle, hustle, hustle. But yeah, work hard but work smart. And so I really admire him and he was interviewing someone and I cannot even remember what they were talking about but he talked about this idea of what he called modeling.

This was where you basically take a business and you take the products that you are going to sell in that business. You put in the price of how much those products are going to be and then you basically work out how many of these items do I have to sell in order to achieve my goal, in order to achieve my goal income or in order for the business to be viable. And basically this is like a way to fast-track any business plan. It is just to say, Oh well I have a membership site, On Property Plus, or I have a course or whatever it may be. I am going to sell it for this much, how many do I need to sell in order for my business to be viable. And then you can begin to see that Okay, this is going to be really hard in order to achieve this or Yes, this is going to be viable. And so you might find that at the price point you are going at it is not just going to be viable for you.

So what I did was I did some modeling on Tuesday and I set the goal of $150,000 in revenue. The reason I set that goal was I thought I would like to be earning $100,000 a year. That would be nice. But in order for me to take home $100,000 a year, I probably need to be earning about $150,000 in revenue. And that was just base off last year where I earned about $60,000 in income or in revenue and then I had to pay about $20,000 in expenses so about a third of my revenue was expenses so I thought $150,000, a third of that is $50,000 in expenses. That would leave me with $100,000.

And so I started doing some modeling around this and I just did some modeling for all of my products and basically I said, How much of each product would I need to sell in order to reach $150,000? Actually I am going to adjust this spreadsheet that I have here as I talk to you guys. But let me just work out, so goal income we are going to put in $150,000, and then I am going to copy it. So basically I have put in all of my different products in here at $150,000.

So the first one is On Property Plus monthly membership and I have put in a frequency of 12 times per year – 12 months in a year. So basically assuming people stay on for 12 months or consistently replenishing people that have left, in order to reach $150,000 I would need to have 250 members. And currently I have 39 monthly members so massive job in order to do that and that has obviously freaked me out. On Property Plus annual membership which is about half the price of the monthly one, I would actually need 505 members to achieve that goal. And at the moment I have 90 so again a massive jump.

And then I looked at Property Tools and so currently that is selling for $5 per month. So at $5 per month I would need 2,500 members in order to achieve that and what have I got at the moment? Maybe like 60 or something, it is growing pretty quick actually. I am pretty impressed with how Property Tools has been doing. Let us have a look at monthly, annual and 5-year, so I have 55 members at the moment for Property Tools including monthly and annual. So monthly I have 28 and then annual, I have whatever is left. That is too confusing for me to try and work out. But yes, monthly I need 2,500 of yearly which is $50 so they just gain 2 months for free.

Then I need 3,000 members to achieve $150,000 which considering how niche I am, getting 3,000 members for a cash flow calculator, probably not going to be achievable.

EBook bundles, so this is the bundle that I am selling for $6.99. Those are my 3 eBooks. I would need to sell 21,459 eBook bundles which is just completely – yeah, that is never going to happen. And then courses which I plan on selling for $100 each, I would need to sell 1,500. And these numbers just absolutely freaked me out when I did it and I was like, Oh my God! I can never achieve this. This is just unachievable. Maybe On Property Plus over a few years but everything else is just ridiculous. Like 1,500 courses? Like 21,500 eBooks? Like 3,000 Property Tools members? That is not going to happen.

But then I got wise and I was like, Hold on. I am not modeling to make $150,000 per product. I am modeling to make $150,000 for the business. And then I was like, Okay, let us try and break this down and see what I would need to earn in order to achieve this. And so what I want to do is make $60,000 from On Property Plus monthly members, $60,000 from On Property Plus annual members. From Property Tools I want to make $12,000. From Property Tools annual I want to make $5,000. From the eBook bundles I want to make $2,500. And then from the courses I want to make $10,000. So now this is looking a bit more achievable but definitely not this year. B

ut On Property Plus monthly I need 100 members, annual I need 200 members and again I am at 40 and 90 so this is basically more than doubling that business. And that would form the bulk of my income so $120,000. Property Tools I would need a total of 300 members and that would make me $17,000. The eBook bundles I would need to sell basically 1 a day so about 350 to make $2,500. And then the courses, I would want to sell 100 courses at $100 to make $10,000. And that would bring me pretty close to $150,000. I think a little bit short of $150,000.

And so that was more achievable but still freaking me out. I am having a little bit of a mini, mini meltdown where I was just like I am not getting enough time to work and I was stressing out. And things are just hard and as well because I have been diverting my attention because I have had to recreate this training videos for my virtual assistant in order for me to be able to put a video file in Dropbox and then for it to go all the way through I would have to redo everything. So my week has been spent on that.

And then my son, we went to a specialist and then he had to go into surgery the next day on Thursday. So Thursday and Friday were wiped out taking care of him. And so I was doing like a couple hours on Sunday and I did 3 training videos for my virtual assistant. I got to the end of the third one and realized that the whole work flow was actually broken.

And so everything that I did, I took half my Sunday and then basically do nothing. I did have a little bit of a breakdown where I was like, Oh my God! I cannot do this. I do not get to work enough like I need to take care of my family but I do not feel like I can work enough in order to earn enough in order to achieve what I want to achieve. So I almost cried. I did not quite cry but I was pretty frustrated.

And then last night, just hanging out with my missus, with my wife and realized that last year I earned $60,000 or $40,000 profit. If I did that again this year, that would be fine. That would be okay like we would get by, we would have the same lifestyle we have now. We would not be able to buy a house but we have been talking and we do not really want to buy a house yet anyway just because of what our lifestyle goals are and things are and things like that. We do not really want to make that commitment right now. Maybe in the few years when it is really easy financially but to push for that is not something we really want to do.

And so to have that realization that if I earn $60,000 then that would be fine; that would be enough to get by. And then I thought well, let us push it a little bit and let us try and make $1,000 a month, so $52,000. And basically $52,000 divided by 66.66 times by 100, this is how much revenue I will need to make. So I need to make $78,000. So I made $60,000 last year and remember I launch On Property Plus in April of last year. And so I had a couple of months and we were at June until July. And so I am in a much better position now than I was before so even at this current state, with 39 sales of On Property Plus, 90 sales of the annual, and Property Tools, 55. All up, I am kind of on track to make like $53,000 in revenue anyway. So to push that to $78,000, which is what an extra $25,000 is probably not that hard.

That is probably quite achievable for me. And so when I had this realization I was like, Ryan, what are you doing? Why are you freaking out? Why are you melting down? Why are you pushing yourself so hard mentally to try and achieve this when you do not actually need to do it.

Alright, so $78,000 is what I am aiming for. I have not actually done the modeling for this and what we would need to achieve but I am just going to make up some numbers. So let us say 50 monthly On Property members. Let us say 100 of the annual members, that gives me my $60,000. Property Tools, let us say 50 monthly and 50 annual, they get us up to $65,000. I still would like to sell 100 courses at $100 which is an extra $10,000. That gets me the $75,000. And then eBook bundles, I think I am not going to sell 1 a day. Let us put 100 in there, sell 100 over the course of the year. So I need to adjust this, Property Tools, how many people are signing up for monthly versus annual, it is pretty similar.

So we have 55 at the moment, we launched in May. It has been June, July, August, it has been 3 months and we are at 55. So let us say another 3 months will be 50. So we could maybe hit 200 by the end of the year. So let us go into our modeling and let us just say 100 monthly and 100 annual and then we have 100 eBook bundles, 100 courses, that gets me to $81,369. So my goal would be 50 members to On Property Plus monthly, 100 to On Property Plus annual, Property tools would be 100 members for monthly and annual, eBook bundle would be 100 over the course of the year, and then courses would be 100 as well. And so that is probably pretty achievable.

When I was freaking out on Friday, I actually decided On Property Plus is not making as much money as I wanted. We need some more revenue straight on. We need to pull some stuff out of thin air. There are no instructions for this, let us just pull it out. And so what I did was I decided to launch a course and I had started work on How to Save Your Deposit but then I was looking at some other courses that I wanted to create. One was on How to Find Positive Cash Flow Properties, another one was How to Research an Area and I thought, the one on researching an area, I will probably launch that. But then I was looking at it and I was like, Okay, positive cash flow property I know people want this because they paid for it already with On Property Plus.

I have some training in there for On Property Plus that I wanted to redo so let us just redo it as a course. And so I set up the course, the outline, and it was like 8 episodes, 8 lessons. And so then what I did was I used canva.com, which is a cool tool to create graphics.

I created just some slides of what each would be about, of the 8 modules. And then I created like a Keynote with each of those slides. What I then did was I just recorded my screen like recorded the Keynote and just talked about: Hey guys! I am going to be launching this course but I am going to do a pre-launch sale. And what you are going to get is you are going to get 50% off. So it is only going to be $50, not $100. And you will also be going to get access to a private group where we can discuss this and I can get your feedback and we can improve the course based on your feedback.

And so I put this together on Friday because I was having my meltdown or freaking out; sent this out Friday afternoon to people, like I set up a sales page. I used Snappy Checkout to receive sales. I absolutely recommend snappycheckout.com if you need to receive sales. The guy Mike over there who runs it is absolutely awesome. And the fees are started small, it is ridiculous. So use Snappy Checkout to set that up. I am hoping to get him for an interview soon.

Anyway, I sent out an email to my list of On Property members or On Property email subscribers, which is about 10,000 people. I cannot believe I have actually grown to 10,000 people. Sent that out and then by the end of the afternoon or by the end of the night, I have done probably $350 to $400 in sales so 7 to 8 people. And then by this morning I had done 12 sales which is $600 and I think as I am recording this I just saw an email come through with another sale.

Let me just go ahead and double check that: You have received a payment for $50 for How to Find Positive Cash Flow Properties course. So there you have it, $650 at 13 members. And I have said I would accept a maximum of 20 which will give me $1,000 in revenue and would really prove that this is a course worth creating and I am getting paid upfront to create it so it is absolutely awesome. And the goal is to put this on the courses page which will then I guess create passive income and move me towards my goal of selling 100 courses over the year.

So each of these courses is half-priced so selling 12, that is equivalent to 6. So I need to sell like 10 a month in order to achieve my goal of 100. So I am pretty pumped about that, pretty excited to create this course. I think it is going to be really good content.

I am excited to trial this group in Slack, this private membership group because again this private membership group is going to be a way to get feedback but then also if people find this valuable this could be something that I could sell in the future, a private group of property people where you can ask property questions, you can get help on something that I could consider launching.

I am not really planning on doing it because as you guys know I like the stuff that is really passive. I created products, sell that over and over rather than subscription stuff where you have to keep doing stuff. I just do not like that for some reason. I want to create stuff and then be able to have my lifestyle without having to do this over and over and over. So yeah, I think that kind of wraps up last week and wraps up where I am at at the moment. Breakdown over.

We got our modeling so we have our targets set up now for On Property Plus, Property Tools, eBook bundles and the courses. And basically that is going to get us there. And then if these courses work well and are easy to create, well I could create some of these $100 courses for Public Speaking Power which is going to become OutSpoken.co. I could create one for PodcastFast as well.

These easy $100 courses I will just bam out 10 videos and there you have it, Bob ****. So maybe to get to 100 course sales, I want it to be through On Property only but I might also be through OutSpoken.co and also it might be through PodcastFast.

So yeah. Pretty exciting stuff. I have stopped freaking out which is really good and I guess now I just need to get to work on my course. One of the good things about when I created this sales video for the course was like, Here is the course. Here are the first 2 videos, they are going to be delivered on this date which is Friday of this week. The next 2 videos will be delivered the next Friday and I was really clear, 2 videos each Friday for the next 4 weeks.

I actually have 4 weeks to create this course and as you guys know I come from a history of making a video a day so to only have to do 2 videos each week to deliver this course and I am getting paid $650 upfront in order to do it or maybe $600 after you take my costs into account, that is pretty awesome. Pretty, pretty awesome. And then I am going to have a course that I can sell over and over again and that is going to be pretty exciting. So I am pumped. I am excited. I am very excited to do this. And that leaves me with where we are up to.

Just rambling now. I have a text from one of the guys in the Super Smash Brothers community so I am hoping to get out sometime this week and play some Smash Brothers although you guys know how I go with that if you care which you probably do not. But it is my podcast so I guess I could do what I want so bad luck. You just have to listen to me.

Alright. Another thing that I have been thinking about last week, I might just leave this until tomorrow because this is getting pretty long. But we are going to do it. We are going to get it done, smash it out of the way. Something that I was really looking into last week was actually investing in precious metals. Random. Ryan.. what?! Precious metals?! Going on a tangent here, what is going on. But yeah, I was listening to an audio book by Robert Kiyosaki, who was the Rich Dad Poor Dad guy. Let me just find out what the book was called. The book was called Second Chance by Robert Kiyosaki. Basically I love his stuff.

I love the way he thinks about money and he was just talking about currency and how the currencies that we have – the US currency, Australian currency, all these currencies they are actually fiat currencies, are actually backed by silver or gold or anything like that and so using gold and silver, buying these things can be a good way to retain your wealth and avoid inflation because obviously gold and silver have been used for thousands of years as currency. Precious metal is always going to have a level of desirability to it and then if these currencies go to zero then you still have wealth like intrinsic wealth.

Whereas if the US dollar goes to zero how much is a piece of paper with the US dollar printed on it going to be worth? Not much. But still that will be of value so I have been looking into that, looking into investing in silver. I have been doing some research into that which is cool. Apparently silver is pretty low at the moment but it has been going down for a number of years. It may go down some more. But yeah, the people that I was listening to that I resonated with were saying, When you start investing in silver or gold start small. Start small. get a couple of coins, a couple of ounces and then build it up slowly over time. Do not just go gungho into it. Learn a lot about it. Start small and then build up your portfolio or your stack, as they call, it over time.

So I have been looking into a few things here, speaking to my wife about it and she is like, Yeah, I am on board. I understand it. We talked about the currencies and all that sort of stuff. How it is fiat money and how inflation and it is kind of protection against inflation. And she was like, Well, we have a whole bunch of stuff in the garage we need to sell. You have a Nintendo 64 you need to sell. How about we sell that stuff and then we use that to invest in silver.

It is going to be heaps smaller to hold than a couch. Now that we have what we need to sell and then it is kind of like a way to invest that does not affect our money supply. And like we have a backup supply of money as well for lifestyle reasons and this would just be another way to have a backup money supply which you could then sell in the future and liquidate if you needed to.

Yeah so looking at investing in silver as I learn more about it I will let you guys know as I invest in silver I will let you guys know as well. But that could be pretty cool. Thank you guys. That is it. I am out for the day!

Until next time, if you want instructions go and buy some furniture.

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe: rss | email | twitter | +