Close

Join the 5-Day Challenge

Join us as we help you plan a profitable
Online Marketing Funnel (for free!).

SIGN UP NOW
  • Home
  • Blog
  • 6 Questions Every Entrepreneur Must Answer Before Building a Marketing Strategy

6 Questions Every Entrepreneur Must Answer Before Building a Marketing Strategy

Do you feel like you’re constantly spinning in circles, trying to get traction for your business?

Do you feel like when it comes to moving your business forward, there are too many different actions to choose from? Where you’re never quite sure what the right choices are to get real momentum and results?

Does it ever feel like you’re fighting an uphill battle against “shiny object syndrome? Where the latest course, tool, or marketing strategy eats up all your time for almost zero results? Leaving you spread so thin you can’t even follow through on the information?

Do you wish you could wake up in the morning and instantly know, with certainty, what to do next? No guess work, just clear, purposeful actions to move your business towards the future you want?

If any of the above feels like a page out of your life experience, you’re not alone.

I’ve seen these situations play out time and again (almost predictably so) during the years I’ve consulted with entrepreneurs, small business owners, and product creators.

Most of us get ahead of ourselves, skipping ahead in the process, ending up one step further than we should be. It’s like getting into a monster truck before you’ve learned how to drive.

We’re nose deep into all of the advanced tools and tactics without having the basic strategies nailed down..

Sadly, this is a foolproof recipe for repeated failure.

Imagine this for a second; a construction crew shows up to a build site with a truck full of tools, but no blueprint for what they’re building.

Not only is it a waste of time, it’s incredibly expensive. We instantly know that’s NOT going to play out well!

With that in mind, what I ask next may be hard to do… I want you to put the toolbox down for a few minutes.

I ask, because I want to help you design your blueprint instead. I don’t want to just throw more “tools” at you.

If you’re ready to find out how, let’s dive in.

Creating Your Blueprint

First off, it’s actually simpler than it seems.

To get clarity in your business, there are two essential pieces:

  1. Having a specific understanding of what you are trying to build and what result you are trying to achieve.
  2. Having a simple means to evaluate if your actions are in alignment with that goal.

To see this in action, and so you can get a clear idea on how this works; I want to share with the story of “John, the fitness trainer.”

John the Fitness Trainer

John is a fitness trainer who has a part-time training job and a couple of clients that make him $30-$40K a year.

John doesn’t really have tiers or packages for his services. He sort of just charges whatever he thinks he can get for his time from the clients he has.

John spends a lot of time tinkering and talking with others about YouTube videos, social media marketing, Facebook ads, and other online marketing tactics. But… he never really follows through with any of these tools or tactics deeply enough. It never gets to where he can create clear, measurable results for his business.

John knows that this needs to stop. He knows that he needs to put some structure around his services, and that he needs to better leverage his “working on his business” time. He’s also aware that he needs to find a way to attract new potential clients in a more strategic manner.

John needs to ask himself the following questions:

  1. How much do I want to pay myself per month?
  2.  How much are my current fixed monthly business expenses?
  3. How much time per week do I spend “working on” my business?
  4. How many hours do I want to work per week total?
  5. What are the exact details of the service I want to provide (my package offer):
  6. How much of my time will this take to deliver to one client per week (on AVG)?

By clearly understanding what your income goal is and how many hours you’re willing to work to earn that, you’re positioning yourself to act strategically.

You can then figure out how you’ll divide up those hours into packages, and in doing so, will find out how many clients you can support at one time. This allows you to understand how much you need to charge each client to meet your goal!

Let’s Find out Where John’s Numbers Are

John wants to earn $2,500 per week.

His current fixed business expenses are about $500 per week, most of that being taxes, software and advertising costs.

That means that in order to take home $2,500 in pay per week, John needs to generate $3,000 in revenue per week.

He spends about 10 hours per week working on his business, and he wants to work 40 hours per week total. This number gives him 30 hours per week to put towards providing 1-on-1 services.

He’s decided that he wants to offer an online coaching program to help entrepreneurs adopt better lifestyle and fitness habits. John wants to help them achieve their goals of having more energy, feeling healthier, and becoming more fit.

After crunching the numbers, John has determined that each week, he’ll spend about one hour on the phone w/ clients, one hour via email communication, and one hour doing research and creating programs, totalling three hours per client, per week, to deliver this service.

Remember that John found out he has 30 hours per week to put into coaching. At three hours per client, that means 10 clients per week brings John to full capacity for his desired maximum working hours.

We now know that John can serve a maximum of 10 clients per week.

So how can John generate the $3,000 in revenue required to profit $2,500 per week after expenses?

If you’ve been following along, that $3,000 per week needs to be generated through what he charges those 10 clients.

And since they’re all getting the same package, all we need to do is divide:

John now understands that he needs to find 10 clients and charge $300 per week to each of them for his fitness coaching packages. Doing so will help him meet his lifestyle and income goals through his business.

It goes without saying that John needs to validate his package offering on the market. It’ll take some testing and data to determine if he has product market fit (a.k.a. whether his target audience will accept what he’s providing). But at the very least, John now has a framework for his business model, something that he can base his decisions off of going forward. Even more specifically, how he will approach his marketing.

Let’s go back to those two questions again, and see how John compares:

  1. Having a specific understanding of what you are trying to build and what result you are trying to achieve.

John now knows that he is trying to build a online coaching program with 10, 1-on-1 clients, that allows him to earn a profit of $2,500 per week while working 40 hours per week.

  1. Having a simple means to evaluate if your actions are in alignment with that goal.

John now knows that selling packages that are not aligned with this format are not aligned with his ultimate goal.

John now knows that stepping outside of his zone of expertise, is not aligned with this ultimate goal.

John now knows that his marketing needs to focus on helping him maintain a constant roster of 10 clients for his $300 per week package to be in alignment with his goal. It’s to his advantage to pursue strategies that are consistent with that.

John can now easily evaluate which actions are in alignment with his ultimate goal.

Taking Things a Step Further…What Does This Mean for John’s Marketing?

Getting to 10 clients…

First off, assuming John is quitting his training job, and retaining his two clients on his new package format, he’s two-tenths of the way to his client goal.

That means he needs eight more clients at $300 per month.

Let’s say John decides to use an online marketing funnel to attract those clients.

He creates a PDF fitness guide that he distributes using Facebook advertising. Once someone downloads the guide, they are redirected to a video about his services, with a call-to-action to book a call with him.

As a basic example (there’s a little more to this), we’re going to cover how John dials into the correct numbers for his funnel. Doing so will let him determine how much he needs to spend on ads to get those last eight clients.

For example, if John has to spend $100 in advertising to get one call booked, and he closes 25% of those calls. Then we know he needs to book four phone calls to gain one new client, which will cost him $400 to do.

So if John wants to gain eight new clients, he’ll need to spend $3200 ($400 x 8).

Maintaining His Business

Let’s just say for illustrative purposes, that John’s clients have typically stayed on with him for three months time.

If that’s the case, then John will need to find one new client every three months, in order to maintain his client base at 10 consistently.

So taking the numbers we calculated above, if it costs John $400 to gain one new client, and he needs to gain one every three months, then he’ll spend $133.33 per month on advertising. This fits into the original expense budget of $500 per week that he set aside in his business model.

It’s important to factor this in because if the costs were not consistent, John would have to make adjustments in order to reach his $2,500 per week profit goal.

Let’s Go a Few Years into John’s Future

John did the math, calculated his costs, and catapulted himself into living off his business by providing services to 10 clients. His big-box gym job is a thing of the past.

Some days it still surprises him, but his bank account is flush and he’s maintaining that roster with his budgeted monthly ad-spend.

Despite his success, he’s now looking at augmenting his 1-to-1 offer with a new 1-to-many offer.

John realizes that running his own online fitness business is an extremely valuable skill. He’s decided to package up everything he’s learned from his own business into an e-course.

John once again needs to ask himself the following questions:

  1. How much do I want to pay myself per month?
  2. How much are my current fixed monthly business expenses?
  3. How much time per week do I spend “working on” my business?
  4. How many hours do I want to work per week total?
  5. What are the exact details of the service I want to provide (my package offer).
  6. How much of my time will it take to obtain a new course customer (on AVG)?

Let’s Find out Where John’s New Numbers Are

John is now earning $2,500 per week from his client-based business, but he now wants to add to his client based income with e-course purchases.

His fixed expenses for his 1-to-1 side of the business have remained at $500 per week. But John expects he will have to spend substantially more to achieve his new e-course goal of an additional $2500 in profit per month.

He’s maintaining his 30 hours per week providing 1-on-1 services, but he’s willing to work weekends to squeeze in more time for building out his 1-to-many offer.

Note: We’ll be simplifying things a bit for the sake of this example.

John plans on offering an online e-course to help fitness trainers build their client rosters. He wants to help these trainers escape the big-box gyms they’re working for.

Realizing that he’s pushing his limits on time availability, John is going to hire a part time virtual assistant at $700 a month to handle customer support, he’ll also be handing off tasks to this assistant for his client business as well.

Taking time to dial in the numbers, John realizes that it’s going to take him about 4 weekends to build out his funnels; including his evergreen webinars. He also believes that his weekly customer support training will require 2 hours of his time per week.

Using his experience in Facebook ads from the client side of his business, John expects his cost per lead will be about $2.50. Upon nurturing these leads through his funnels, after 90 days he expects to convert 1% of them into paying customers for his evergreen $997 fitness business e-course.

Placed in our original formula:

It will cost John $250 in ad spend to get one customer paying for his $997 fitness business e-course. John’s maximum ad spend allocated each month for the e-course side of his business is $1750. With a $1750 advertising budget, he can expect his ads to generate 7 new fitness business e-course customers each month.

So John’s monthly costs will be $1750 for ad spend, and $700 for customer support. He is using the same marketing automation tools from his client business (meaning no extra cost there). This puts his monthly expenses for the e-course business at about $2450 a month.

John also expects that 5% of his customers will end up refunding his course. With his current advertising budget, he will sell about 21 courses before expecting roughly 1 refund.

With what he can afford to spend on advertising, and the volume of sales he expects to achieve, John expects this 1 refund will happen about once every 3 months. On average he’ll hit 20 fitness e-course sales every 3 months (after deducting the 1 refund).

His 3 month costs will be $7350, and after selling 20 courses (minus the refund) he’ll have generated $19940 in revenue.

Subtracting $7350 (3 months of overhead for this side of the business) from his $19940 in revenue, John is left with $12590 (earnings before interest, taxes, depreciation, and amortization) for those 3 months.

We’ll divide that out to single month.

After building out his course, funnels, evergreen webinars and customer support systems, he’ll be sitting at $4196 minus $1300 in transaction fees and taxes. This puts his net profit per month to about $2896.

Almost $300 above his $2500 per month e-course profit goal.

We also have to factor in that he doesn’t expect to make his first sale until 3 months after his ads and funnels go live, so John needs to plan accordingly for the extra $2,450 in monthly expenses for each of the first three months.

Once his systems are built he expects that the hourly demands from this side of the business will slowly decrease as his customer support person becomes more experienced.

In time he’ll have added an extra income stream that doesn’t require as much hand holding as the client side of his business. Like anything he’ll need to adapt with time, but by diversifying his offer he’ll have scaled his business beyond what he could do strictly with clients alone.

Wrapping Things Up

This was quite a bit to cover in one piece of content. Hopefully these perspectives have helped shape your thoughts on structuring your offers and business. I also hope the six questions along with the basic math exercises provided some clarity on how you can create momentum in your business.

As you worked through the article, and performed a few exercises, you may have realized that $997 courses are not the panacea many marketers make them out to be. For a resilient business it makes sense to build out your offerings to more than just e-courses.

Beyond the information itself, it’s not what we know that determines our success, it’s what we do with the knowledge. Implementation drives success. So the question then becomes whether or not you’re going to choose to implement on what you’ve learned here.

If you’re still figuring out where to start with building your own marketing funnel, we’ve built a free 5-Day Marketing Challenge just for you. It covers the critical aspects you need to know for building a profitable lead generation funnel in 2017.

Are you ready? Then join our FREE 5 Day Marketing Challenge here!

James Vannelli

James

Vannelli |

As CMO at INFINITUS, I help construct our overall strategy, manage promotional efforts, contribute to product development, and collect, compile & assess data to help make decisions that maximize our impact and achieve our vision. I've been doing this online marketing thing for about 8 years now. Originally from Montreal - I'm currently based in Toronto, Canada, working closely with the core team here at INFINITUS.

Recommended Posts

Join the 5-Day Challenge

Join us as we help you plan a profitable
Online Marketing Funnel (for free!).

SIGN UP NOW