Note: This post has been updated since it was originally published on March 17, 2014. You can also listen to me explain my 2 year plan here.
If there is one word that is most often used to describe ultra-successful entrepreneurs, it’s focus.
When you have it, you get results.
When you don’t, you’re just busy.
Ever since last month’s dismal earnings report, I have been deep in thought about the business that I’m trying to build and the results needed to get me there.
As I’ve thought more and more about my businesses, my products, and how I’ve been spending my time, I’ve come to the realization that how I’ve been allocating my time (and the actions that I’m taking) are not exactly what I need to be doing to achieve the results that I’m after.
In other words, I’ve not been focused on the right things.
Begin With The End in Mind
To help me work my way through my challenge, my wife and I decided to begin by creating a vision board for what we want our life to look like. At the time of this writing, the board is not yet complete; however, I can tell you about a few of our ‘must haves’ and ‘nice to haves’.
Before I do, I want to emphasize that the reason that I’m going to share this is not to boast about what we want to accomplish. Instead, my motivation for sharing some of our goals is purely to (hopefully) inspire you to take this same step in your own business/life planning process. So, with that said…
With respect to the business, which will obviously have a large impact on our lifestyle, our list of must have’s includes the following:
- We must add massive value to our clients and customers, so that they remain highly engaged and reliant on us for a long period of time
- A recurring billing revenue model, so that we can build a business that can one day be sold for a large sum, and gives us highly predictable revenue for as long as we own it
- The business is location independent so that we can live anywhere we like without restricting our level of income
- Products and services that we are passionate about with a very long shelf life so that we can build a business that will last for the long term
- The potential to achieve a 7 figure revenue stream with gross margins of at least 60% so that our net profit margin will exceed 20% of total revenue
- A suite of products and services that are very scalable so that we can build systems and train employees to use those systems to run day to day operations
- Products and services that are paid for in advance so that we never have to deal with unpaid receivables and a negative cash flow cycle
- The opportunity to work with interesting people so that the business always remains fun to be a part of
Nice To Haves
While not critical to my happiness, below are a few of the things that would be very nice to have in my business:
- Invitations to speak and consult that are close enough for me to fly my own plane to (I have a pilot’s license) rather than hop on an airline
- A mastermind group comprised of people running $10M (or larger) companies so that I can organize retreats to some really amazing places, and be paid to travel there
- A few clients that are paying me enough each year that I can afford to take them to Miller Motorsports Park for a fun-filled day of racing around the track in some really fast cars
One of the biggest reasons that I chose to become an entrepreneur is so that I can design a lifestyle of my choosing. What motivates you? Please tell me in the comments below.
Make a List of Short Term Challenges
In 2013, Bright Ideas earned a six figure income from information products and consulting work. The revenue from information products came primarily from two major product launches and the consulting revenue came from consulting engagements with Bright Ideas readers who wanted to use Infusionsoft in their business.
Given that we hit $127,000 in our first year of monetization, our results were OK (but not incredible). To repeat this level of income in 2014, we either need more consulting clients, or I need to write more books and launch more products.
The problem with product launches is that, in my opinion, they are not a sustainable business model. Worse that than, however, is that a product launch is a massive amount of work and pretty stressful (what if it flops?).
Because of this, I’m not terribly interested in building a business dependent on product launches, and as such, I’m going to need to do more consulting work with clients.
The problem that I’m faced with is that, up to now, attracting consulting clients hasn’t really been my focus. Sure, I’ve mentioned Infusionsoft (see…I did it again!) on my blog many times; however, thus far, consulting engagements for this type of client have been limited to $5,000 or less, and worse, the revenue has all been one-time revenue, as opposed to recurring revenue.
If I’m to hit my goal of at least $250,000 in revenue in 2014, I’m going to need to offer something much different that I’m offering today, as well as to offer it to a type of business that doesn’t (yet) even know that I exists.
As you might guess, I have some work to do!
Make a List of Goals
The Bright Ideas business (everything I sell, except consulting) will probably generate between $30,000 to $40,000 worth of sales in 2014 without my doing much other than blogging and running my mastermind group. The rest of the income is going to have to be generated by my agency, Groove Digital Marketing. I suspect the numbers will be about the same split in 2015.
As I plan to look back on this post in two years to see how I’ve done, here’s a quick summary of the goals for each of my businesses:
Groove Digital Marketing
Within two years from today, Groove will have become a $500K company with a 20% net margin. This business will have embraced the “built to sell” methodology and every part of this business will have been systematized and delegated to a member of the team.
Virtually all revenue will be from retainer income. The value of this asset will be equal to 5X earnings IF I am not needed to run the day to day operations of the company.
This is pretty much what I did while running my last company, Dyrand Systems. In year two, I think we did just shy of $500K; about half of which was recurring revenue. By 2008, we were doing just under $2M and I sold it for $1.2M :)
Bright Ideas will be the platform where I talk about what we are doing to build Groove. The content produced will be of interest to other agencies and entrepreneurs in general. Revenue will be $500K.
I came up with these numbers after a talk with a guy I really respect. His business has the exact same model as Bright Ideas (we create high value free content to generate traffic, and then monetize that traffic with info products, affiliate income, and our mastermind groups.
Like me, he also has a services division that does work for his clients – though his service business caters more to other information marketers, as opposed to the type of clients that I will pursue with Groove.
When I found out that his business did $2.5 million (with a net profit margin of 50%!) in the last year, I was pretty stoked, to say the least. As I couldn’t wrap my mind around hitting that figure within 2 years, I thought $500K would be something that was more believable; especially if my success with Groove gives me the street cred to attract more mastermind members at a higher price point than I charge now (his pay $18,000/year and he’s got 40 of them).
Make a Plan to Get From Here to There
Below is a short summary of my plans for Groove and Bright Ideas.
Groove Digital Marketing
Effective immediately, my primary focus will shift to growing Groove into a 7-figure business, and to do that, my plan is to offer content marketing services to businesses that can get an ROI on a monthly retainer of $3,000/month or more.
In hindsight, this is a decision that I should have made a year ago; however, there are two reasons why this didn’t happen.
Reason #1: My last business was really hard to grow. We were an outsourced IT department for small businesses and our clients paid us a monthly retainer for this.
The reasons it was so hard to grow were twofold: first, no one really wants to pay for IT support, and second, due to the nature of our business, attracting larger clients was incredibly difficult because selling to companies with one full-time IT manager involved a massive amount of politics (they feared for their jobs).
As a results of this experience, up to just recently, I swore I would never get into another services business as my primary means of income.
Reason #2: Thanks to my podcast, I have had the opportunity to interview quite a number of inbound marketing agency owners, and they have all been having quite a bit of success.
Unlike IT services, marketing services is something that CEOs want to buy because they know that effective marketing will help them to increase profits. And, thanks to my understanding of how to create documented processes and outsourcing, I am extremely confident that providing content marketing services can be treated as a scalable ‘product’ business in ways that offering IT support could never do.
With a scalable product offering, we should be able to grow faster! (assuming my sales engines is optimized, of course)
Sidebar: If you haven’t yet checked out my podcast, you should. The amount of free training in provided by my podcast exponentially exceeds what I have created in my paid products.
The Niches We’ll Target
Initially, we are going to focus on two niches: financial services and industrial manufacturers. By specializing, the goal is to:
- Decrease direct competition from generalists
- Increase our ability to charge premium pricing
- Increase the likelihood of referrals
- Have fewer places we need to advertise
- Create more compelling offers and lead magnets
- Develop high levels of industry specific expertise
The reason for the financial services niche is that I spent my first career in that niche so I have a better than average understanding of it. In addition, profits margins in financial services tend to be quite good and there are plenty of companies in the $10-50M range to target.
The reason for the industrial manufacturing niche is that they sell very high ticket items and aren’t generally known to be very good marketers. For this reason, I believe that we will be able to charge premium prices for premium quality content marketing. I have also interviewed several CEOs in this space and they have confirmed my assumptions.
My Lead Generation Plan
To acquire leads, we will:
- Use the Content Marketer’s Blueprint (CMB) combined with Hubspot for Groove to build traffic to our site*
- Contact existing Hubspot users who might not be getting the ROI there were hoping for
- Perform Seek and Assist on LinkedIn
- Buy Facebook Ads to promote webinars and other lead magnets
- Speak at Vistage (I’ve just become an “approved” speaker, thanks to an introduction made by a past guest on my show)
- Use dimensional direct mail + content to pursue my “Target 100” list of ideal prospects.
*as a result of a recent interview, I discovered the content marketers blueprint and how it ties into Hubspot. Suffice to say, I was blown away by what I saw. Infusionsoft is awesome for information marketers, people who want/need ecommerce, and people who want just one system to use ; however, as I’ve just recently discovered, Hubspot is ‘the shiz’ for content marketers looking for detailed analytics on what is working. Look for future posts on this.
In order to achieve the maximum benefit from the CMB, we have purchased Hubspot at a cost of $800/month. This is a significant investment; however, I cannot credibly sell content marketing in the way that I plan to without using the same tools myself.
The Groove Website needs a facelift which will cost $500 and a day or two of my time (this is actually done already).
Initially, my role will see me working “in” the business, and as cash flow allows, I will hire more employees to take over my day to day roles, thereby allowing me to transition to working “on” the business almost exclusively. With the time I free up by working “on” and not “in” the business, I will be able to invest time into building Bright Ideas into a much more successful business than it is today.
James Schramko has proven that a personal blog can be built into a 7 figure business and the key driver to achieving this result is the production of very high quality, helpful content.
Many others (including me) have proven that providing incredibly helpful content for free creates a highly engaged audience and a very large mailing list.
Given that our near term monetization plan is focused on Groove, aside from creating content, Bright Ideas needn’t consume as much time as it has in the past.
More advanced funnels, product launches, etc, are all items that, given the current size of my list and volume of traffic, don’t offer a high enough ROI to warrant the time investment required.
Given that Bright Ideas content will be centered around sharing the story of how I’m building Groove (the stories of other enterpreneurs’ successes will continue to be shared via the podcast) into a 7 figure business, I suspect that the audience demographic will shift more towards agency owners and consultants as time goes by.
To ensure that new visitors are clear about who Bright Ideas is for and what they will learn, I am going to make some changes to the lead magnet on my home page.
Currently, the home page looks like this:
Yesterday, I sent my designer the following mockup and asked her to create something attractive.
With this type of lead magnet, I don’t need to create a new course (this would take time). Instead, all I need to produce is one blog post per week to detail my progress. The post could be as simple as what I did that week and the results I achieved.
More importantly, by offering this type of “look over my shoulder” content, I expect that I will also attract the type of reader I most want to have and this will likely generate more leads for the mastermind group.
In the near term, the only monetization system that needs to be built is a new version of my resources page that I’ve started referring to in recent podcast recordings (these recordings will start to air in a few weeks).
Assess the Time Required to Execute The Plan
No plan is worth the paper it’s written on if it isn’t feasible from a resource standpoint. Given that time is my most precious resource, I thought I would produce an estimate of how I plan to allocate my time to execute my plan.
As you can see, I only account for 34 hours per week of productivity, where as I will work a total of about 45 hours. This is because it would be impossible for me to produce 40 hours of productive work in a 40 hour week. Email, which is a necessary evil, is a somewhat unproductive time pig. Oink!
Adjust and Fine Tune
In 3 to 6 months, when I read this post again, I’m sure that, with hindsight to my benefit, I will see all sorts of flaws in my plan that are invisible to me today. Such is the nature of the beast.
If you’d like to join me for this journey, please be sure and become a subscriber today by clicking the button down below. It’s going to be another incredible ride and I’d be stoked to have you join me!