My monthly revenue is only just covering my business expenses and there isn’t enough left to pay me or cover the costs of running our family home.

I’m obviously worried right now BUT I’m also excited in a weird sort of way.

The situation

I’ve gone from a monthly revenue of around $25-30k and am now hovering between $10-$14k (closer to $10k). The monthly expenses are around $10k and my family living costs are around $10k.

So as you can see there is not enough coming in AND the costs of running the business are too high.

I have around 3 months worth of cash so that means around 3 months to make a serious course correction equivalent to an additional $10k per month.

Why we’re in this situation

I think there are a combination of reasons that we are in this situation:

• I decided to no longer offer standalone courses for sale so that I could focus solely on promoting my subscription product

• I lowered my prices (including for current students)

• I stopped using artificial discounts to drive sales

• I stopped running promotions every month

• Over the longer term I’ve made more of a push towards annual subscriptions rather than monthly which leaves me with less consistent monthly revenue

• Over the last five years I’ve been less frugal in how I run the business due to having good cashflow AND trying to make life easier with a young family (no regrets here)

• The macro-economic climate. I’m putting this one last because I don’t believe it is the most important factor. Plus, it isn’t in my control. So, we’ll just say that the dollar is weaker and the public’s confidence is low at the moment.

There might be other factors and decisions that I’ve made which have led to this situation but I think these are the main ones.

Clarity.

The most important thing to realise first of all is that I have one priority. Create an extra $10k per month so that I can at least pay myself.

This kind of clarity is great. It’s a little like when you get a flat tyre during a long journey. You only have one thing that needs to be done so that you can get back on the road - fix that damned tyre.

How can I do this?

• Option 1 - Reduce Expenses

Like I said before, I don’t run the business anywhere as lean as I did during the early years. So much so that I haven’t even been measuring my expenses in any serious way. Running an online business can be very high margin but mine is not currently. A lot of that is down to high staff costs ($5-6k per month) and being happy spending money on equipment, software products and anything else that will a) make running the business easier and b) make it more fun. So, my first step at the very least is to be more careful with any extra monthly expenses such as new software and equipment. The biggest saving could be staff costs but they are also the reason that I don’t have to work 80 hours per week and never see my children. Losing the team would be a last resort and would require dramatic and painful changes to my product. It’s an option but not the best one.

I’m going to try to keep expenses to $7k or less AND maybe slowly move towards a model where I am less reliant on people doing certain jobs.

• Option 2 - New Revenue Streams

I love having a simple business model and have always loved companies that sell one product only. I feel like this creates a level of clarity and focus which can lead to an excellent product. However, I need to find an extra $10k each month so I sat down and wrote out 12 new potential revenue streams.

They broadly fall into the following categories;

• Low resource - lower return

• High Resource - potentially high return

I’m fixing a flat tyre so I need to put aside the “High Resource” category and focus on the “Low Resource” categories. I don’t think any one of the potential revenue streams will get me to my monthly target immediately but I think the aggregate of a handful of them might. Then once I’m in a more stable position I can move on to the longer term/more resource intensive (potentially higher reward) projects.

• Option 3 - Do what used to work

I have been running this particular business for over 10 years so I know what has worked historically.

Standalone courses have been a good cash generator AND discount marketing has driven more sales.

While I don’t want to use these tactics longer term I think I have to suck it up and use them for now until we get back to stability.

Immediately, I’ll can sell pre-existing courses AND further down the line I can create new ones.

• Option 4 - Offering my current members more

I’ve never been particularly good at trying to sell more to my current members. I always have the fear of coming off as overly commercial.

BUT, I’ve asked them what extra features/services they want and I will see how I can provide them and make some more recurring revenue from the current group.

This is maybe the easiest option to explore because my members already know, like and trust me AND I can ask them for exactly what they want. The potential downside is that they want more access to me which then means spending more time working and therefore less time with my family.

What I’m going to try fist

I’m going to try a combination of the above.

Reduce Expenses - Over the next month I will still maintain the team I have but I will run leaner. I.e. No new software subscriptions, no paying for training and no new equipment.

Doing what used to work - I don’t want to use fake discounts so I will keep those in my back pocket for now. Long term, I don’t want to sell standalone courses BUT for now I will do that again.

Offering my current members more - I surveyed my current members to see what they would pay more to get access to. I will start offering the version of this that looks like the most value for them while being the lowest resource drain for me.

Final thoughts

I think it is important to keep a record of the tougher times in business. This is definitely one of the tougher times I’ve had.

I’m excited about the singular focus I have BUT I don’t want to go back to a 20 something’s mindset of working harder and hustling my way out of this situation. I want to keep lean and value my time with my family as the most important thing at the moment.

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What is the resource triangle?

I’m not sure where I first heard about the “resource triangle” (please post in the comments if you can help me credit the creator) but here it is as I understand it… Broadly speaking we have three resources that we can use for problem solving.

• Time

• Headspace

• Money

This means that we can throw one, two or a combination of all three to a problem in order to solve it.

I think it is important to define headspace (money and time are obvious). Headspace is the ability to analyse and think through a problem in order to find a solution.

Why it is so important

All of life is just problem solving from one moment to the next. These range from small problems to much more complex ones. If we don’t allocate our precious resources efficiently to finding that solution we might end up wasting them.

e.g. In the middle of the work day, I am hungry. I have three options;

1. I could go home to make lunch before eating it and then returning to work. Time Intensive.

2. I could spend time researching the most exciting culinary experiences near my work space. Headspace + Money Intensive

3. I could go and buy the pre-made sandwich in the shop across the road. Money Intensive.

There is no correct answer to this problem. It all depends on what resources are least abundant in the moment. Currently I don’t have an excess of time or headspace (I’m reserving both of these for the work that I would like to complete) so I choose option 3 and I buy the sandwich.

Shifting abundance

Buying the sandwich was not always the obvious choice for me. When I was starting out, money was very scarce so the only option was to go home and make lunch.

I can also imagine a future where I do want to take my time looking for an exciting food experience.

Right now is not the time for either of these options.

So, you can see that being aware of what you have the most of in your resource triangle is very handy for making decisions.

This will shift over time (and not necessarily in one direction or another).

Resource Allocation Habits

I think that people generally have “resource allocation habits”. Even if there is an obvious choice which leaves us with the most resources available in our “war chest” we might automatically spend one resource rather than another.

I’ve identified that I heavily favour investing time into problem solving rather than money or headspace. I don’t even “think” my way to a solution, I just “brute-force” through it.

I know that this is irrational. Nevertheless, my hope is to start making decisions about how I approach roadblocks with a cooler head. I want to use the resource triangle and trust what it tells me.

The resource is a very simplified way to decide how you approach problem solving but for now I think it is helpful. Time, Money and Headspace are the most basic resources we have for solving problems. Time and Headspace are finite, and money can feel it too! Pick the one you have the most of and develop the habit of spending that one the most freely.

What are your resource allocation habits - comment below.

The main parts of your business

One of the first things that my coaching group asked me to do when I joined a couple of weeks ago was to look at the following areas of my business…

• Traffic

• Funnel

• Offer

• Fulfilment

• Systems

They asked me to score each one from 1-10 for how happy I was with them and how they were performing. I also had to justify my scores.

Everything can be improved

Be careful not to look at these 5 areas and think that they could all be improved. They could but that is not the point. You don’t look at the person with a gaping neck wound and think “oh they could maybe do a little more cardio”. Yes, they could have a higher level of fitness but right now the priority is probably stopping them from losing all of their blood. Disclaimer: I’m not a medical professional so I might have got this completely wrong.

Not getting bogged down in the weeds

It’s so easy to get hyper focussed on that tiny glitch on one of your web pages or what colours your headers are or taking a great photo for that one Instagram post. These all feel very important in the moment. But, the reality is that the main parts of our businesses (listed above) are the only things that really matter.

Thinking about the 5 broad areas of my business was very empowering. Some of them are performing pretty well (Fulfilment, Offer and Systems) while traffic is ok and funnel is completely non-existent.

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My funnel is a 1 out of 10

I don’t have a “funnel”. Instead, people join my mailing list and then I send then more and more free content. Every so often I send some promotions to the whole list.

Now, when people join a mailing list that is usually the moment that they are most likely to make a purchase so it would probably be a good idea to have some kind of sequence of emails, videos and promotions that they get shown right from the start.

Why focussing on one area at a time makes the most sense

I could easily work on everything at once but it doesn’t make sense.

If I work on increasing my traffic without a functional funnel for them to go into then I am just increasing the size of my mailing list.

If I work on my offer but there is no one seeing it because I don’t have a funnel leading to it then it could be the best offer in the world but no one would be directed to it.

If I work on improving my fulfilment but I don’t have any customers to fulfil then no one will ever know how wonderfully they could be looked after.

Don’t even get me started on systems. I’ve implemented systems over the years every time I’ve hit a pain point. It doesn’t make sense otherwise. You can’t imagine what a system should be like without experiencing building, creating and refining processes while actually making some money.

The next 3 months

The gaping neck wound in my business is my funnel (or lack thereof) so that is all I am focussing on. And, believe me it is tough. I would love to be creating new products, doing more content marketing and tidying up my systems but for the next 3 months I’m working on a funnel.

So, my question to you is: what is the “gaping neck wound” in your business?

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This week (research)

Now that I’ve decided on a general direction that I want to go in with the business I’m in research mode. This means that this week I’ve been drinking from the fire hydrant of information about growing a business, selling a business, running a business, using AI to improve your business. I’ve joined an online mastermind group. I’ve reached out to various business friends.

There are so many things I could be doing to improve my business. How do these people do all of them all the time?????

Yes, you can probably tell that I have overstimulated myself.

I literally feel sick as if I’ve eaten too much rich food or stayed up too late while drinking too much coffee.

Overstimulation

I’ve recognised a pattern in my life ever since I discovered Pat Flynn and his “Smart Passive Income” blog a decade ago.

First step, I discover something inspiring and get very excited about the possibilities of me trying It out.

Second step, instead of trying it out I consume more of this inspirational content.

Third step, I start to feel sick because I’m not achieving enough when compared to these “inspirational” bloggers, podcasters and vloggers.

This has happened multiple times over the past 14 years of business. So much so that my wife has implemented a “no non-fiction” in bed policy lest I get overexcited, stay up all night and wake her up at 4am due to my anxiety.

Pulling Myself Out (turning off the input)

Fortunately, I’ve been through this cycle a few times and remind myself that I know how to get out of it. The first step is to switch off the input. This means stopping consuming business and marketing podcasts, reading blogs and doing endless research.

Next, pick one job and do it. I have a lot of things I want to achieve in my business over the next couple of years but I can only work on one thing at a time. I can’t accomplish any of the goals I have if I don’t remove myself from customer support in the business.

I now have the space and direction needed to work towards my goal (singular).

We don’t talk enough about the daily anxiety that can creep in when you run your own business.

Thinking about too many things I could be doing rather than focussing on one thing leads to a lot of stress and inaction.

I need to be more efficient.

Some inspiration is good.

Be careful about how much input you allow.

Work on one thing at a time.

Do you get overwhelmed by everything you could be working on in your business? Comment below on what your triggers are.

• Remove myself from customer support

• Simplify and document all business processes

• Prove that we can use other people to create course content AND marketing content

• Increase profit each year (the aim is to roughly double profit each year)

Why do I need to remove myself from customer support?

Removing myself from customer support is the only logical first step. Not only does it free up my time to work on the rest of the goals but it also proves to a potential acquirer that I am not the most important person in the business at all.

Currently I have a great virtual assistant who deals with almost all of my customer support BUT she was recently very ill and hospitalised for two weeks. Thankfully she is doing better now and is out of hospital, however I had to step in for two weeks and deal with customer support. This showed me two things. Firstly, that we have a single point of failure. Secondly, there are no contingencies in the business that don’t rely on me stepping in to cover people.

Simplifying and Documenting all business processes

I started my teaching business in 2010 and since then it has evolved from being an in-person music lesson business to being an online-only course business with one-off courses and subscription based services. Every time I’ve grown, wanted to add new features or faced an issue I have simply tacked on a new piece of tech, process or system. It’s messy! I think this is known as a tech debt.

Over the next two years I will go through all the old systems, processes and tech and decide whether they can be simplified, improved or removed. All the while I need to make sure that they are being carefully documented and that SOPs are being created so that anyone could slot in to manage them.

I don’t even remember half of the things that are going on in the background.

Proving that we can use other people

When I moved into online course businesses I was excited about all of the “Passive Income” I was going to make by creating my “muse” as inspired by reading Tim Ferriss’ “4 Hour Work Week”. I had no desire to ever build a business to exit. Instead I wanted something that would satisfy my desire to grow my music career and personal brand while affording me time freedom to do all the things that were important to me.

As a result of this I have built a business with my name in the company name and a marketing funnel built around my personal brand.

Obviously I can’t sell myself to anyone who buys the business AND I don’t want to have some lengthy “earn-out” to get what I think the business is worth. So, I need to prove that other people can be the face of the courses.

This will involve using other teachers to be the face of marketing material and to create new course material that we can sell.

I already have a team of three teachers as well as a large group of guest teachers who contribute to the school. Students get regular feedback from their teacher (not me) and I’ve proven that I can sell courses created by other teachers.

I just need to do more and gradually move away from being the only face of the school.

I’m imagining kick-back from current students as I become less and less “visible” BUT I have to accept that this will be necessary if I want to sell the business.

Doubling profit each year

Since having my first child in 2020 my profit and turnover has remained stable. The business provides me with more than I need and I don’t need to spend insane amounts of time on it each week for it to do so. This is great if I want to keep the business for ever BUT if I want to sell it then I have to demonstrate that it can grow and that it can keep growing year over year otherwise it is only worth a small multiple of the current profit.

I plan to get a very good grip on all of my important metrics such as cost of acquisition, average lifetime value and everything else that will help me to discern how much I can invest in acquiring a student.

But STEP 1 is removing myself from customer support and ensuring that we have contingencies in place in case of illness etc.

I still don’t want to work after 1pm each week day because I want to spend all the time I can with my family before my eldest starts school in August.

I call myself the Business Deviant for two reasons.

Firstly, I don’t want to use my real name because I am currently working on selling my business (or at least getting it to the stage where I can hire an operator to run it).

Secondly, I don’t do business/life the way a lot of my peers do.

I don’t work 80 hours/week

AND

I haven’t created a passive income business which enables me to travel the world and sip cocktails on the beach.

So what do I do?

Well, I work as much or as little as I want. This is usually around 10 hours per week.

I enjoy working and I make good money (more than I need to be able to do the things that are important to me) doing it. I run a membership site teaching in the hobby space.

Most of my time is spent with my wife and two young children.

Until the kids start school this WILL NOT change.

We are all together from 1pm till bedtime every week day and all day at the weekend. We spend our time learning, teaching and playing together as a family.

This is my priority (singular) until the kids start school and then we can re-assess the situation.

I also enjoy spending time on fitness, friendships, creativity and learning.

Questioning everything and doing what is right for me

I hustled like a motherfucker throughout my twenties and early thirties to get better at my professional skills and build this business.

But, then in 2018 I hit an income level I had never imagined when I was starting out. $100,000/year.

For some people this will seem like a huge amount of money and for others it will seem trivial.

To put this in context our household spend at the time was $30,000/year.

The business has continued to grow since then with around $360,000 revenue ($60,000 in expenses) annually.

I’ve allowed our household expenses to grow to around $100,000 per year since having two kids.

Even when I tell my business friends these numbers, most of them don’t understand why I don’t just work a little more to grow the business more.

If I spend too much time around those kinds of people it makes me question everything that I value. It makes me feel that I must be doing everything wrong.

If I’m doing the right thing, shouldn’t everyone else be doing this?

The crucial realisation is that I am doing the right thing for me.

Be careful who you look up to

At the end of 2023 I was invited to join a mastermind group that was mostly populated by business owners who were in the same space as me but around ten times the size.

Part of this mastermind was a WhatsApp group. I generally steer clear of WhatsApp because I like to limit the amount of bandwidth I give to inputs BUT these were people who I looked up to so I thought it would be valuable. So, on Christmas Eve 2023 I downloaded WhatsApp and joined the group.

Immediately the notifications started pinging.

CEOs of 7 - 8 figure businesses were panicking about Wordpress plugins on 24th December. They were asking for advice about installation, security and unforeseen interactions between bits of their tech stacks.

WTF?

This continued throughout the holiday season and it made me realise that I didn’t want to be like these people. They maybe had “bigger” businesses than me but they couldn’t even step away from the minutiae for the holiday season.

I can see two reasons for this predicament.

Either, their businesses were poorly designed and couldn’t function without them.

Or…

They were so obsessed with working on their businesses they couldn’t step away from them even for a few days.

Whichever way I look at it, I don’t want to be in their situations. I need to limit time spent with these types of people lest I start believing they are the norm and I’m doing something wrong…

The Business Deviant

There it is. I don’t fit into mainstream business groups. This makes me a deviant…