Lessons

Lesson Info

Plan for Growth and Future Revenue Streams

Hello everyone so today we are on lesson twenty to plan for growth and future revenue streams so our goal for today is to create a plan for growth based on both your current and your future revenue streams so really our goal is we're actually going to develop a plan to help you get to that make a living number right early on we created this fairly big scary number write for a lot of you and now that we have a much better idea of what customers respond to and what's going on in our businesses now it's time to actually create that action plan. So in the last lesson we developed a production strategy to help you make a living selling what you make right, we figure out how many production hours you needed and if those exceeded what you can do in a week or what is literally physically possible in a week how you can look for help to make that happen right let's look at where we are in this boot camp we are on session three create your plan for business success we're almost done but we've got...

a few more left to stick with us right today we're on plan for growth and future revenue streams so when I say revenue stream what I mean is a combination of related marketplaces so way back and lesson ten we identified write your number one target market we got super specific so you're number one revenue stream is sort of the broader picture of that specific target market right? And then you may have more than one revenue stream within your business so here are some examples might be online sales craft shows wholesale review we haven't talked about yet but there are still huge possibilities revenue streams or commissions or one of a kind or custom work maybe it's freelance design maybe it's licensing maybe it's teaching that's obviously part of my revenue stream package right and there's a lot of other options as well, right? So there's a lot of things that you could do here for revenue streams but you're still gonna focus on growing one revenue stream at a time just like we did with your target market right? You can't do everything at once not without making yourself crazy definitely not without hiring a big team but even with a big team oftentimes that scattered focus creates a lot of issues in your business right? So I want to focus on growing one at a time but if you have more than one revenue stream that makes sense for you what you can dio is you can identify revenue streams they're being on active growth meaning it's here right now but it's the one I'm really focusing on growing right autopilot meaning it's there I'm maintaining it keeping everybody happy but doesn't require that huge growth push maybe it's one potential for the future something you're thinking about down the road or maybe it's one you can ignore entirely right? You don't have to do it I don't know any business that does everything on that list I just showed you right you know for a long time for me that active growth revenue stream was really wholesale right now that's a little bit more that's auto pilot for me I do my regular shows you take care of my existing accounts I pick up some new stores you know I'm not doing nothing right but for me the active growth now is that online sales channel so they're going they're going to change right as your business evolves you want to use your previous revenue to help determine your best opportunities for future growth, right? The business is going to grow faster when you push at the things that are already working right for me. You know I started in the beginning playing with everything right I was doing retail craft shows with selling wholesale was on etsy was trying all these different things right and wholesale kicked the fastest right? So I put all of my time and energy into that area of my business because it was very clear by looking at my numbers but that's where it needed to be my first full year in business I didn't know six eight retail shows three trade shows those three trade shows brought in four times more income and I think my etsy shop brought in like twenty bucks maybe was a little higher than that but it was pretty low right? It was really obvious where I needed to focus my attention right so that's your first exercise I want you to analyze your previous revenue I want you to sit down and look at those numbers not anecdotally but for real right? So there's a handy chart in your workbook where you could do that go back over the last twelve months think to really see it way split it up between the two parts right? Go back over those numbers filling your revenue streams feel that in and see right take a look what was what was working? Where did you get the most revenue from then you need to figure out how far is your current revenue away from your make a living number right these years is pretty far right you made a face like up. Yeah, I know, right? I want to know about you guys. How far away is that weigh right. Ok, so then which revenue streams provide the best opportunities for growth right where is already bringing in the money that you can kick harder in that area? T bringing in more and that's gonna help you determine which revenue stream is your number one priority right? The one where you see the biggest potential for growth the one that feels the easiest and again they switch right? I've been focusing on wholesale because groth felt really easy now I had a point where growth doesn't feel so easy so now I've picked another market and their growth is starting to feel easy again right market that wasn't working for me before that revenue stream of online sales right? So it shift sometimes what feels easy shifts as well right? And then also thinking about which revenue streams would you like to focus on in the future and how far into the future right you for me I split my time you know it's wholesale that's my autopilot my act you know, my active growth right now is online sales teaching is a revenue stream for me but it's not my highest priority one you get me wrong, they work really hard to be here and deliver this class for you guys, right? But it's not a growth revenue stream for me something I do because I'm super passionate about and I love it right? But I don't know for me maybe something the future that might be kind of fun is like a licensing revenue stream you know, I went my designing a collection for j crew anyone out there knows someone who knows someone who could make that happen you call me right all right, so that might be a future revenue stream for me. But it's it's backburner, right? It's? Not something. I see a huge amount of growth. It's not an area I'm familiar with. We'll put that out in the universe for now. But it's there. Okay, so what are your future ones? And then what does your time frame for focusing on and growing each revenue stream? What's the timeline and the reality is it's probably longer than you think, right? It took me hit a bump, but having it took me, you know, maybe four years or so to the wholesale business felt stable, right? I've been in active growth mode for my online store for about a year and a half, maybe a little longer. Right? And it's on ly just now feeling like it's starting to get traction right now get dread, oring revenue, other places, right? We're always working on that revenue generation first, right? But it's going to take a little long a little more sustained focus than you probably think. I would say whatever revenue stream your diving into first again based on your future with give it a year, give it a solid year att leased to really let it grow before you decide if it should be on auto pilot or if you want to keep it in active growth if it's growing and it feels awesome and easy keep it active growth don't jump ship for another one keep focusing what's growing what's feeling easy right? So then your second exercise is to set revenue goals based on your make a living number and you're going to set monthly and annual revenue goals by revenue stream to get you there, right? So this is how we break down the beast that is your make a living number, right? We break it down by revenue stream and we break it down by month, right? And again remembering that not everyone is gonna be the same right and that's why we want to use your previous revenue to set specific monthly targets. So when I set the number of worry what might online sales to be this year? I didn't say every month right is going to be the same I said, okay, this is what they looked like last summer this is actually the gold for the last five years I'm trending back this tends to be slow so this month this is the goal but this is a month where I see a huge opportunity or this is a month a typically does better so on those months where I see the opportunity, I might say ok that month I wantto triple or quadruple my revenue where is someone sports a little tends to be a little lower I might just try to double that right still looking at those numbers right and figuring out what works for you so what I want to do now let's do a quick hot seat with someone where we actually take your make a living number and we break it down into your revenue goal was going into a hot seat and I'm actually gonna pick on lisa right? Because I think you've got a pretty big goal I want to break this down so go ahead and get up here so I know we've probably changed a few times right where we at with your make a living number, right? Okay, so the final final number annually yes was two hundred and sixty six and then we bumped it up to three. Fifteen okay, so it's three hundred fifteen thousand no added and all that others write and other stuff and then we added that way figured out what was missing way also your production with all that stuff right? What what revenue streams are you working on? So I definitely think wholesale also I did a wholesale line specifically for that and this is probably your your biggest active growth right? Are there any other ones that you currently have going on that might contribute to the overall number as well, where I do pop up at any event so you're doing all right so pop ups in events perfection trunk shows like home trunk show okay, perfect obama girls set that up it's all cool um anything else? Yeah, I do custom stuff okay. Custom and I do some freelance stuff. Okay, so what percentage do you want think each of these should contribute to your make a living number? Well, I want the wholesale number because that's the easiest to detain right? So how how much of your revenue do you think is gonna come from wholesale? I would love it if it least fifty percent at least fifty percent so let's say like one hundred sixty, right? What about from this? I like the pop ups they get me in front of people but it's always cash it's always really interesting I want to do that I want at least ten or twenty percent. Yeah, so right, so maybe another thirty years thirty thirty to sixty and we can look at maybe how that changes based on the amount of effort that we have to get to sell, right? Yeah. And then what do you bring in from your custom? I don't really know that I want to do them custom going forward or even freeland ok, so these you really don't want to do very much, but right now we're not quite to your number right with these two because you told me that you want this to be about fifty percent and this to be like twenty what do you mean we still have thirty percent to make up, right? Well, where does that other if you don't want it to come from here where is the other thirty percent of your revenue going to come from magic l'd fan club uh I guess I just keep doing the pop up events and those um those components I rather focused more on the line that's working then take myself out of it and agreed custom stuff and freely what we really have to do is adjust these numbers right? So so maybe fifty fifty for now fifty fifty for now. Okay, so what do you have any calm in there? Well it's there but it's not working so it's possible it's not working and it's not your active growth but I would venture a guess that if you do enough of this and you do enough of this you could maybe get like, five percent out of the way big email list that I don't know so you could get you cut in fact generate a little bit of revenue from this could probably not a lot of money right without any money kitchen right? So what do you think you think we could at least get like fifteen k out of those yes in a year right that's about percent so yeah okay do you think I didn't even go higher? You think that's maybe a good place to start? Well, since I don't really like the online stuff let's just let's keep it that way yeah that's a little that's a stretch goal for me holy not even in the room but he like people would you ever do a workshop for teach I think that's too far from too far her business right now I I really I don't think about doing like a belt class and things like that but I just don't have the time yeah I think it's too far from the core of your business and and so I wouldn't worry about that right now I also think there's a problem in when you're first starting out making products told you workshops that teach people how to make your product that's like teaching works for me because I'm teaching something very different right about teaching people how to make my product did you have to make money with your products? Right there's a reason that ice each business and not process it's actually a huge strategic decision for me okay, so you think this maybe comes up a little bit? Yeah, right? Yes oh like and you know what the truth is that I could do bigger event in between wholesale and the pop upsetting usually mark market so but the problem so just finding the right one so for me doing the research and finding the right market for those kinds of events because they haven't been ultimately successful so I can look at that ok so I would say that maybe like this you know somewhere in the sixty to ninety and we maybe we make up the difference here like this is actually really a two hundred k target right so two ninety yeah that's it we're yeah we're writing well yeah awesome so how does this breakdown for month to month obviously we don't encounter smart actually break it down but where do you see a lot of this happening and what we can kind of do here also is think about it and like q one q too q three q for all right so so so just for fashion and spring summer fall winter right for business quarters so you're getting corners okay got it so how much so this is because fashion is also yes it's springtime or whatever but those air also weirdly not yeah that's true the timing of it was a hard language it's a fine language she used for collections the hard language to use for business right so january february march how much do you think you're seeing from each of these revenue stream so is there a time when you're doing mohr of these okay let's go queue for because that's christmas right so coarse that's going to be the pop up events right there I would say like fifty percent of that right? So you're thinking you're going to dio for about forty five k and I would venture a guess that you're probably going to dio like eight to ten k of this also in queue for right yeah right um what about this? Um wholesale so we're really talking a lot of men stuff, right? So let's just look at father's day which is in june which is que todo okay? So that plus always holiday plus holiday yeah, so that's always going to be a bigger row where so I would say you might be looking at like, almost like sixty here one hundred here, right? Math twenty you might be it might be a little bit different, but what you tend to see is write this one and this one so it's deep winner deep summer tend to be slower for stores and they're doing a little less buying right? So you're getting a lot in spring even though you know might be man's father's day holiday is still obviously going to be your big one that makes a lot of sense so right and then where else are we throwing in so pop of events in the summer in the summer so that for you is probably gonna be the other like half of that almost well, I think at the end of que tu so cute carving department, right? Yes, half all right, so like twenty, twenty two okay, yeah, and maybe a tiny bit at christmas, but but right, but not yeah, ten, right? I think I think you just like your baby that's all that we could grow and maybe five, you know, we got fifteen k for your bombers may be like two and a half into it. Yeah, when you might actually really see it's probably like two and a half two and a half and it comes to pretty much a screeching halt in q three because it's summer and then he went out. People are outright on and then you go from here. So now if you can kind of projected this out, what this lets you do, then is kind of creative plan and move forward and also no, you know, I mean, if you're gonna make most of your revenue in queue for you can't make most of your product before what you're up to plan that right when it's slow in q three, right? Exactly when it's going to be three. But you have to make sure that you have the cash reserves from q two to carry you over right? Awesome. So this now gives us at least a picture of what this is gonna look like, right simon have you step down for a second? We're gonna come back to you and a few minutes because we're not done with it but we're without down there for now. All right? So then your next exercise is that I want you to create actionable targets based on your revenue goals so right this is our goal. What do we have to do to make this happen? Not just how much product do we make? How much marketing what do we need to get into stores? We want to break those down right? So what do your revenue goals look like in the big picture of your business, right? How do they fit in with the flow? We kind of just talked about that splitting them up into those main quarters right? And you could do yours monthly to we're in a limited time frame so it was really quick to talk quarters instead of months, right? And then how can you turn your revenue goals into concrete actionable kp eyes right, archy performance indicators so let's just say that one of your goals it's thirty k an annual wholesale revenue right. So now we can start to figure out what numbers those might look like. So what is your average dollars per order? And in the case of wholesale it's not her product right it's per wholesale order, right? How many orders will it take you to hit your goal. How many stores do you need to sell? To get that money orders? The beauty of wholesale is that usually not one and done right. We want the repeat orders. So if you need one hundred orders in the year, you don't need a hundred stores, right? So what's your retention rate with stores. How frequently do they re order? Right? Another example might be. Maybe you want to dio ten k and online sales in october. What's your e t s right what's your average dollars for sale online. How many sales will it take to hit back all what's? Your conversion percentage? How much traffic will you need? And from what source to hit your sale school. Right? So for me, I know that a hundred percent of traffic comes from my email list and I can look back and see previous sales. What percentage I've converted from that list. So by of a specific sales goal, I know exactly how many people have to be on my list based on my a t s did that number, of course you can fudge all of these things. I realized the other day that if I could just bring the eighty s up a little bit then I needed less people, right? I could convert the same rate, any less of them if I can get the eighty s a little higher. Right? So but when you know that it helps you create those targets and then you couldn't figure out what actions do you need to take think big picture here first, right to reach your revenue goals. So if you want thirty k an annual wholesale revenue, one of the things that you have to do, right, create a line cheater catalog, mail it to stores, how many stores? Right? How many stores have to get that catalogue or get that postcard mailing in orderto order, right? And we ran those numbers, so yeah, if I need a hundred stores, how many do I actually have to reach out to? You're gonna attend a trade show, right? What is it that you're going to dio to hit back coal it's? Not enough to have the goal. We need a strategy in place, same thing, right? Say ten k and online sales based on those numbers, right? The list has to hit four thousand or improve the eighty asked by focusing on higher priced items, right, improve conversion by having more inventory in stock? You know, I'm planning, this is a big sale and stuff runs out that actually drops conversion, right so all of those things that you could do and then of course we can take each thing further right so what I need to do to go to the mailing list to four k right what feeds the mailing list is it press is it facebook ads right is it growing my instagram following and then pushing those people to the list you take each thing and then keep working it backwards based on the numbers that you need thio hit to get there right at least I'm gonna bring you back up because we're gonna break this down even further right gary to go from like ten k two three hundred right it is a very very big difference right way wait we want to make that manageable so what I want to start with right now is we're just going to talk about one revenue stream and we're just going to talk about this two hundred k in wholesale right right okay so your goal is to hundred k and wholesale so what's your average wholesale order right was your wholesale what's your wholesale price point so I think we said three hundred thirty three for the bag okay so what's your minimum or they're going to be eighteen pieces it was eighteen pieces including my cuffs and belts I had a whole but what if not everyone wants to do that? What if my everyone wants cuffs and belts but if they just want bags then are the right customer for me not necessarily because I will it show will it carry itself just having a bag yeah if you're a store like you might just be a store that doesn't want a small set that just wants the bag okay and even if you're not I actually think eighteen piece is a little high including bracelets and yeah and again they want that again they may not want that right so I think you're better off maybe setting what I would probably dio is a minimum for bags and a minimum for everything else right and if they want to do both you know then they can do both right but I think because you're dealing with two drastically different price points and you don't know what people are gonna buy then you have to go from there right ok so what do you think is the minimum for the bags coming bag sitting in a store I think if they have at least three bags can we go for bag yeah I mean I would go higher for sure right so what's your what's your wholesale price thirty three okay, so there three three three and we're going four bags that's that right so um and I would say even from me the minute I was three and I think saying like that's a three bag minimum might actually sound weird it's me better hasta hang like my minimum is a thousand dollars right kachin right do it as a dollar around on what's kind of the price point for the smaller stuff like the belts and so these air but you're you're not doing like the pins and stuff I am to see you're still doing those men because they're lapel pin okay their belts no men have to have built even though I have a red one here they're like black and tan they're the same colors you're right actually yeah what's here what's your average price point for that kind of stuff so the belts are three hundred fifty retail okay? And I did like a little blind she let up for the camera right? All right. So the belt of the fifty retail what about the other other pieces? So the lapel pens are no, they're they're one seventy five wholesale crafty retail the pins are one hundred five okay, so what? You might want to do it so maybe it's like the room was like if you're getting anything it's been like three bags, three belts you know, five lapel pins whatever it is all right. So there's no overall order minimum but within each product category there's a minimum, right? Right that's good. I like that right? So I think based on that we can probably calculate out like an average wholesale order let's say twelve hundred dollars right? Okay you know if they're not buying bags there's females whatever it might be smidge lower if they're just buying bags it could be a little higher and of course this is one of those things that as you start to get orders you may realize that this number is higher right so then you can start to fudge it but let's say you're out which also order right now it's twelve hundred dollars very well so if our goal is to hundred thousand right we get enough zeroes in here divided by twelve hundred you need one hundred and sixty six is actually one hundred sixty seven wholesale orders a year that's orders right doesn't seem that bad does it? Well if you think that there's at least seven touches before each huh okay, we'll come back to us. So how many's stores is it going to take us to two hundred sixty six orders keeping in mind that some of them are goingto are going to re order right? So I would say that you could probably average out two orders a year per store you're gonna get some that never come back we're going to get some that are each season right? And then you're going to get some that order more so I would say let's just say two orders a year to start right so that means you need about eighty four stores in ear news news soars to start with well yeah you're starting from scratch then to hit this in your first year then yes you need eighty four sort yeah, okay yeah and again some of this can be fudged right? If you can get this average number up or you can get them to do more reorders per year you might not need that and to go from where you are to this is a pretty big task in a year, right? Yes, I think it's a good three year glue, right? So how did a three year goal than in year one so then let's just say that in your one then or maybe going for a third of this right like twenty five so in your one can you get twenty five stores totally doable, right? And then here's what happens right? So if you got twenty five stores and you can keep fifteen to twenty of them into year two right then that builds and builds and builds right? So now we know your year one target twenty five stores at twelve hundred at twelve hundred bucks, right? So we know to orders here, right? Two hours here, right? So we know where we're going, but now what we want dio is we look at this revenue stream, we figure out the action plan, right? Okay, what do you need to do to hit twenty five stores? Treat so at least what else you need to do? Because you're not gonna probably go pick up twenty five stores by just rolling into trade show me like, hey, guys, here's my stuff by it, right? I think you need to do a little more pr, like marketing getting I think you're gonna want to do direct store outreach is well, right? You are so p r is also my left pr pr doesn't get wholesale orders reaching out stores directly gets wholesalers pr khun drive online sales if that's a target revenue for you pr is great for that, right? But in this case, it's direct outreach it's a postcard it's a line sheet that you mail it's, a catalog that you mail it's calling and making sales appointments, all of that right? And then, you know, then you can start to break the sound. So if you're going to trade shows what's my target, right? How many stores do I want to pick up at that show? How many stores don't pick up in between? Right? So maybe you said it that your first trade show your goal is ten stores, right? That's a lot, isn't it? At a trade show for anu it's, not it's, not unrealistic? Perfect not okay, I think there's a lot of people who would tell you it's a lot but if your product is the right fit for the market ten new stores in your first trade show totally manageable I'm pretty sure I got more than that mom, I'm gonna believe you it is doolittle it's totally doable, right? Huh? Totally doable so I would say you know probably ten and then can you get another fifteen at your next show and that fifteen hopefully then some of those ten reordering right that's how that starts to build and even kind of work backwards and figure this out have any calls and have any calls right out, right? So how what percentage of stores were going to order? Are you setting them a catalog? How many you have to dio work that backwards and also just for talking about trade shows always throwing a little plug you haven't seen my first class on creative live on selling your products to stores we want all of this store outreach stuff in super detail. So if this is the revenue stream that's really important to you, you could check that the name of that it's called how to sell your products to retailers yourself it's not how to sell your products retailer yeah so that kind of walks you through all of that monica was there you'll see a familiar face so now you could do the same thing right with each of your other revenue streams. So how much do you expect to make it a pop up shop or bigger event? How many of those do I need to schedule? And then, of course, the nice thing with those events is you're selling it retail price, right? No less pieces, so that helps balance out the cash. Villa's well, well, right, because it's less pieces retail price, higher profit margin. You can kind of work from there. So it's possible. You know, if we can I don't remember how we calculated this make a living number, but if we calculated this number telling everything at wholesale price and you're getting almost a third of your revenue at retail price it's possible, this number could actually come down a smidge, right? Because we've got a higher profit margin. We're selling in a retail so you can sit down there on the numbers, figure how many pieces it is, and it might actually drop this number to tie a little bit down and make it may be a little more achievable. Teo so that's great right now, so we're not gonna do it now, but you're gonna do this for every other revenue stream that you want, right, right offthe um, thank you, thank you all right? And I want you guys to that same thing to write, so go through each of those revenue streams, look at your previous numbers, figure out what your goals are and then create that action plan to help you achieve that goal. Now, in the next lesson, we're going to create the big vision for your business. We're going to take a break from the numbers and really think about what you want, everything to look like, right? And we're gonna be joined by a really special guest. Tracy matthews, who was the chief visionary officer of flourishing thrive academy, is going to be joining us in that next lesson. But first let's, look at your homework for today. I want you to complete a financial analysis of your business for the last twelve months with revenue breakdowns. It's not just how much you made, but how much you made in each area. How much you brought in, say from wholesale, how much did you bring it from a retail show? How much did you bring it from your online sales? If you have more than one online sales platform, break those down as well, right? Because you may find that you're getting way more revenue from one of them than the other right, but I would you just set your revenue goals to reach your make a living number. I want you to figure out what your focus revenue streams and your future revenue streams, and what your timeline is to get into them right, and then create actionable targets based on your revenue goals. Break it down. X amount of stores. Ex conversion rate x eighty s whatever it is, set those targets and then figure out the action steps to help you get there. And then for extra credit, I want you to share an instagram one way you are working to grow your focus revenue stream. Use the hashtag make live cell, and I'll see you guys in the next lesson.