I tell you what, this one caught me most off guard and I think the same goes for most business owners. Even though a product may not seem to be costyl, there are SOOO many ‘hidden’ costs you just don’t realise until you start your own product based business. There’s the product, the shipping cost (this can be HUGE and needs to be considered when choosing your product), oh the import tax (anything that arrives to customs with a value over $1,000 AUD incurs an additional fee)- these are just the costs to get the product to you.
Then there’s the advertising cost and COA (cost of acquisition). This is the cost that you pay to acquire a customer ,which on average is around $15-$35, did I mention this is PER CUSTOMER?! Then there’s GST (if you earn over the threshold), the cost of the postal packaging, the cost to ship the product to the customer, the cost of the cards or anything else you send in the mail, the tape, the cost of an accountant, your marketing agency, your coach (not NEEDED but advisable if you want to be GREAT), the cost of your mental health and last but not least the cost of everything you’ve sacrificed to pay for all the above.
2. The more money you make, the less money goes in your pocket.
This was a massive shock for me. I was always under the impression that the more money the business makes, the more money there would be for wages, to scale, for whatever, right? WRONG. Big fat wrong. The more money the business makes, the more expenses the business has.
If a business grows in revenue, it must have a huge amount of product to sell. That product will need to be stored somewhere. Most businesses start out running out of the owners homes but once more stock is ordered, it outgrows this and needs to be in a warehouse. Warehouses cost money, lots of money. Now with all these orders, whose gonna pack them all. You can only do so much as an individual. More customers mean more customer service emails, more enquiries, more returns. Subscriptions cost more, sending more emails? Great, your costs go up according to numbers. Oh and did I mention, the more money you spend on advertising, the lower the profitability and the more it actually costs to acquire a customer? No? Oh, yep, well there's that too.
3. The learning is never ending.
I thought, for sure, once I was doing this for a while, I would know everything and just keep on working on keeping the day to day operations afloat. I was so wrong. As the business grows and you learn the roles of the jobs you outsource, you realise how much you still don’t know.
4. If you’re mindset isn’t right, you will lose.
I have spent years working on my mindset and trying to unravel two decades of negative thought patterns and beliefs. Like the layers of an onion, once you peel back one, there are many still underneath to uncover. Like the understanding that learning is never ending, so is working on your mindset.
I am no expert on this topic but it can be extremely hard to believe one thing when your subconscious believes another. If you don’t know, our subconscious is the part of the brain that is on at all times, it holds the memories and learning from childhood which are deeply ingrained. It’s what allows us to drive a car when our mind has zoned out.
5. Not only CAN you relax, but it’sESSENTIAL to your success.
Hustle culture has made it very difficult for us to feel like we are achieving anything if we are binging on our fave Netflix series. I’m here to tell you that it’s CRITICAL that we rest and relax, to avoid burnout and show up as our most boujiest, bad-ass selves. The best ideas come from a well rested mind and our ideas are what make the business great.
6. The quicker you outsource, the better.
I spent a good 1.5 years learning about Facebook ads and while I thought I had a pretty good handle on it, Apples iOS changes came into play and a lot of what I had learnt stopped performing well, almost over night. I decided to outsource to an agency who does this day in, day out. As this is their main role, they know the best way to overcome hurdles like these and most effectively reach customers and profitability so. I think if I had done this sooner, I could have saved myself so much money and time. I understand that it’s not always possible in the beginning, but when you get to the point that it is, go all in.