Let’s talk about money!
When it comes to this subject people tend to be at wildly opposite ends of the spectrum…
Some will happily talk about money all day long…
Whether it’s about how much they make, how little they have or their financial goals…
Others, however, completely shut down as soon as the ‘M’ word comes up.
That's because many of us have a complicated relationship with money…
Which is possibly why I've waited so long to tackle this topic!
But, the truth is, when it comes to business, it's a subject you simply can't shy away from…
That's why I've decided to share some of my musings about money and mindset in the membership world…
Our perceptions of it, how we treat it, how we think about it…
And the impact that can have on our memberships.
So, let’s dive into some random musings about money, memberships and everything in between…
Money and marketing
When I first started getting deeply involved in the online business space around the early 2000s, online memberships were generally known as “continuity programs”.
This was a time when there was a lot dodgy tactics and business practices used in the online marketing space…
It was the Wild West!
And it wasn't uncommon for marketers to use underhanded tactics to get people on the hook for a program without them realising they were signing up for a recurring subscription.
They got away with it by charging a low enough price that it went by unnoticed by the customer for months or even years.
That sort of stuff was rife back then!
Lots of snake-oil salesmen promising the earth and delivering very little.
And the people teaching you how to create your own membership sold it on the premise that it was an easy path to obscene piles of cash.
This is probably one of the reasons why we’ve always avoided putting money at the forefront of our marketing…
Or talked about it much at all to be honest…
You'll never ever hear us say things like, “join us and make unimaginable riches,”…
Some people when they hear the words “Join us and make unimaginable riches”
Instead, we’ve always been more focused on what we consider to be more more important…
The freedom, flexibility, and fulfillment that running a membership can bring.
The money side of things is a route to that, it's not the be all and end all.
This is why we've always been mindful of how we talk about money…
We don't want our audience to be exposed to the kind of rubbish that some online marketers pedal…
Saying that, I still think it's worth having conversations about money…
Just in a very different way…
And acknowledging money blocks is one way we can do that.
Fight against the money blocks
Most people at some point have something called a “money block.”
This is a concept that comes up a lot in the personal development world…
And is the idea that there’s stuff in your own head…
Based on your past, your experiences and so on…
Which skews your perspective on money.
These are the things you tell yourself about money that directly influences your perception of it…
Quite often in a negative way…
Money block 1: Lack of self-belief
Lack of self-belief and confidence can be really damaging.
Perhaps you tell yourself you’ll never “make it” like other business owners.
The best way to overcome that feeling is to apply some cold hard logic.
Don’t look at your goals like climbing a mountain….
Instead, start at the top and work backward.
So, for example, say $50,000 a month is your profit goal.
It’s a good deal of money, it’s achievable…
But it can feel impossible.
But when you start to crunch these numbers and reverse engineer these figures, you can see how it can be achieved.
Say you’re charging $50 a month.
You’d need 1,000 members to get $50,000 a month.
That’s still a lot, but it’s not an astronomical number…
It’s achievable.
If you have 100 members already, to get to 1,000 members, you’d need a new 300 members per year for three years.
Let's break that down even further…
300 members in a year is an extra 25 a month or around four or five per week.
Getting one member every weekday (none on weekends) suddenly doesn’t sound insane, right?
So, don’t think of it as “I need to get from $5k to $50k” or “I need 1,000 new members.”
Instead, think, “what can I do to ensure I get a new sign-up every day. How can I go from two members a week to three or four?”
Breaking it down into much smaller steps here can help you overcome that money block.
Money block 2: Guilt over money
If one of your money blocks is guilt…
(And this is more common than you might think!)
Then it’s time to switch your perspective.
Obviously this won’t apply to everyone…
Some people are anything but guilty about making loads of money…
And there's nothing wrong with that!
But for those who feel a tad uncomfortable…
This money block can really get in the way of achieving the growth you want.
Remember that you have nothing to feel guilty about…
Earning lots of money and wanting to do well is not a bad thing.
Money is a resource.
Some people have more, some people have less.
What you do with it is up to you.
It’s not some inherently evil thing.
Money is something that makes other things possible.
You don’t need to go down the Scrooge McDuck route of having a big vault full of gold.
This guy certainly doesn't feel guilty for having money…
Money buys you time…
It buys you ease…
And it can buy you peace of mind.
It can enable you to make other people's lives easier, to hire them and put money in their pockets.
If you're finding this is a block, you should look into why you think this…
And how this is impacting your membership and life.
Social media and money
A lot of us don’t really talk much about money to our friends and family…
Sometimes, we only hear people talking about money on social media.
Those online marketers and influencers announcing every penny they make in their their seven-figure businesses can really skew reality for us.
And cause us to have a serious case of FOMO (Fear of Missing Out).
We’ve always had this mantra of “succeed in silence.”…
Because we feel that you don’t have to brag or flaunt every single success over social media…
As the saying goes: Money talks, but wealth whispers.
But if do want to show off a little, then all power to you…
Just please do it with integrity…
Don't lie or crop the screenshots you share.
Interestingly, most of those people who brag about their finances in the online marketing world are categorized in the UK as “micro-businesses”…
As in a special sub-level of business size…
You won't find the real big successful businesses talking about how much money they make on social media!
So, if you’re feeling bad when you see people talk about how much they make, remember, you often don’t have context.
Sure, some business guru could say, “I made $5k in a week,”…
But what about the other 51 weeks of the year?
You simply don’t have the context.
You don’t know their expenses, what the rest of their turnover was, or whether this is a regular occurrence.
Nine times out of ten, they’re telling you about this because they want you to buy their course or a book anyway.
So, please bear this in mind if you feel yourself coming down with a case of comparisonitus.
The membership model is about slow and steady growth
What’s interesting about memberships is that it’s a model based on low-value transactions for the most part…
People aren’t paying you thousands to get on your course.
It’s usually a relatively low monthly cost.
That’s why the membership model is all about slow and steady growth over time…
Not big income spikes.
Putting money to good use
At some point in your business journey, it’s satisfying to just look at your bank account…
However, some people don’t realize that it becomes much harder to take money out and pay yourself.
Yes, I’m talking about everyone’s favorite word: Tax.
Tax can take a huge chunk of your revenue when you go over a certain threshold.
When you reach this point, you might start to ask yourself…
Is there a better way to use that money?
Rather than handing it straight over to the government, most businesses turn towards investing in the business.
This could mean buying new equipment, better premises, or hiring staff.
If you’re not already investing in your business, could you be?
Working out your Effective Hourly Rate
This is something that James Schramko from SuperFastBusiness talks about…
But what is it?
Essentially it's how many hours you need to work to generate the amount your business makes…
For example, if you make $100,000 in a month and work 200 hours…
Your Effective Hourly Rate is $500 an hour.
If you invest in better systems, software, and staff, you can cut that in half.
Instead of spending 200 hours, you spend 100 instead.
That essentially doubles your Effective Hourly Rate to £1,000 an hour.
As your business grows, you can expand your resources and claw back the most valuable resource of all – time.
Scaling your business requires commitment…
Some people, when they start out in business, have a clear financial goal in mind…
They might want that seven-figure business…
Others are happy with much less.
People who have scaled their business to eight figures say there’s a sweet spot around $1-2 million.
Beyond that, the effort needed to scale changes drastically…
Those who aim to grow a $10 or $20 million empire, need to seriously commit.
There’s a huge amount of extra work to put in and some key areas to focus on...
Like hiring people, more investment to put in so that the business scales at a higher rate.
It’s not a case of keeping things ticking over and doing what you were already doing.
You might find yourself working ten times more for just double the profit…
So, that’s another thing to think about….
In other words, you need to make a decision on what your end goal is.
Are you happy making $1 million a year, or do you have your sights set way further than that?
That’s a completely different journey and mindset if so.
It’s a commitment to real growth.
And the price of that is often that you put in more and more time and effort as the years go on (not less like most would believe).
I hope this blog has given you some food for thought.
There are a lot of different things to think about when it comes to money and memberships.
But remember that you’re on your own journey.…
You don’t need to compare yourself to others.
