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RANT 1-yr Self-Employed; Am I a Failure-in-Progress?

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jesseissorude

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I've run my side-hustle for years, but went full-force into it this past year after a layoff.
(I have a progress thread in my sig, but I stopped updating it when I realized I was posting and lurking as a way to feel productive.)

My goal has been a $5k month. With my scaled-back expenses and paying myself 30%, that covers all my bills and spending... so $5k/mo for me represents runway to keep scaling. I still haven't had that Toblerone! (Readers of my thread know what I mean)

My business now looks completely different now! This year I:
  • released a new product (cost $58, retail $230, so 4x markup)
  • partnered with other companies to increase our audiences
  • my Instagram is now a main source of new traffic
  • FB Ads are no longer mysterious and always have a positive ROI
  • Sales used to be about $700/mo (on good months). Now they are a consistent $1400 (except April and November which were both over $2500!)
  • I now have systems in place for packing & shipping, managing inventory & ordering new product, and have great relationships in my industry
But I still haven't hit my (meager) goal of $5k/mo in sales!
I have a lot to celebrate, but I'm starting to run out of money. I'm so dang frustrated! How come so many goobers seem to run successful businesses and I'm still struggling with what feels like a hobby?

/rant
 

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BizyDad

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I've run my side-hustle for years, but went full-force into it this past year after a layoff.
(I have a progress thread in my sig, but I stopped updating it when I realized I was posting and lurking as a way to feel productive.)

My goal has been a $5k month. With my scaled-back expenses and paying myself 30%, that covers all my bills and spending... so $5k/mo for me represents runway to keep scaling. I still haven't had that Toblerone! (Readers of my thread know what I mean)

My business now looks completely different now! This year I:
  • released a new product (cost $58, retail $230, so 4x markup)
  • partnered with other companies to increase our audiences
  • my Instagram is now a main source of new traffic
  • FB Ads are no longer mysterious and always have a positive ROI
  • Sales used to be about $700/mo (on good months). Now they are a consistent $1400 (except April and November which were both over $2500!)
  • I now have systems in place for packing & shipping, managing inventory & ordering new product, and have great relationships in my industry
But I still haven't hit my (meager) goal of $5k/mo in sales!
I have a lot to celebrate, but I'm starting to run out of money. I'm so dang frustrated! How come so many goobers seem to run successful businesses and I'm still struggling with what feels like a hobby?

/rant
It sounds like either:

1- Your audience is deciding your value skew is not sufficiently valuable at the price you are charging. Or
2 - You are not reaching enough of your actual audience and need to improve your marketing efforts.

The first is more likely, because if you had an incredible value skew, your customers would tell their friends and you'd be making more. Work to improve that.

If you cannot achieve a better value skew, take these newly developed skills of yours and apply it to another offering. There is no shame in pivoting to a new project or new direction for your current project. Good luck.
 

jesseissorude

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1- Your audience is deciding your value skew is not sufficiently valuable at the price you are charging. Or
2 - You are not reaching enough of your actual audience and need to improve your marketing efforts.

I actually think it's (2). Marketing is new to me.

However, I can't prove that it's not (1) and you do have a rep for knowing what you are talking about . I get rave reviews on my product from past customers (they even share and re-share my sales announcements and promotional materials when they stand nothing to gain from it). I'll test if it's (1) by reaching out to a few of them this week.
The reason I suspect it's not (1) is that there's a similar product, but mine is visibly higher quality and has a couple extra useful features, and theirs is priced at $229 (mine is $230).

I'm also going to reach out to a few competitors that are actually friends of mine now and ask how my marketing can improve.

Thank you for the response!
 

mon_fi

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I actually think it's (2). Marketing is new to me.

However, I can't prove that it's not (1) and you do have a rep for knowing what you are talking about . I get rave reviews on my product from past customers (they even share and re-share my sales announcements and promotional materials when they stand nothing to gain from it). I'll test if it's (1) by reaching out to a few of them this week.
The reason I suspect it's not (1) is that there's a similar product, but mine is visibly higher quality and has a couple extra useful features, and theirs is priced at $229 (mine is $230).

I'm also going to reach out to a few competitors that are actually friends of mine now and ask how my marketing can improve.

Thank you for the response!
Maybe this is just what the desert of desertion feels like?
 

jesseissorude

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Maybe this is just what the desert of desertion feels like?
Dang, you might be right.

Although as I understand it, Desert of Desertion happens before you get the product to market and start making sales.
But you could think of it as my product being a vision of what my brand will look like, and I'm still in the process of bringing that to reality... so maybe ¯\_(ツ)_/¯

I keep thinking about MTF's avatar. Could this be me?
1607011893227.png

Oh well, thanks for talking me down from the ledge... I have a lot of tasks I can keep working on, and runway through about March, so let's see what happens by then *cracks knuckles*
 

The-J

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  • FB Ads are no longer mysterious and always have a positive ROI
  • Sales used to be about $700/mo (on good months). Now they are a consistent $1400 (except April and November which were both over $2500!)

Why the hell aren't you scaling up? If you've got positive ROAS, my first thing is "OK, how do we push your spend up?"

An example: when one client started working with us they were spending $100/day profitably, within a month and a half they were spending $500/day at an even higher ROAS. But, other clients stay stuck at low budgets because the ROI can't be justified. I then tell them that their offer is the problem, and one of two things happen: 1) they stay on to test new offers, or 2) they're convinced that FB ads aren't for them so they quit.

If you're only making $2500 in good months then you're spending maybe $20/day on Facebook ads... what's up with that? What's keeping you from going past $100? $500? Maybe your ROI isn't actually all that good and you can't justify it. But if it is, then you have no excuse not to try and push.

If your ROI isn't good enough to justify scaling FB ads that you currently run, then the problem is your offer and your strategy.

Clearly there's something I'm missing because if you're making money, you should try to make more. But you're talking about all this other stuff that you're doing (which is wonderful) but it's not resulting in sales improvements.

Is there something you're afraid of?

You also said you're running out of money, which tells me that your ROI really isn't all that good. So which is it: are your ad campaign successful or not?
 

BizyDad

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I actually think it's (2). Marketing is new to me.

However, I can't prove that it's not (1) and you do have a rep for knowing what you are talking about . I get rave reviews on my product from past customers (they even share and re-share my sales announcements and promotional materials when they stand nothing to gain from it). I'll test if it's (1) by reaching out to a few of them this week.
The reason I suspect it's not (1) is that there's a similar product, but mine is visibly higher quality and has a couple extra useful features, and theirs is priced at $229 (mine is $230).

I'm also going to reach out to a few competitors that are actually friends of mine now and ask how my marketing can improve.

Thank you for the response!
I think this is a great example of trusting your gut and your own experience and filtering all the advice you get through that lens. I was just guessing it was #1, but after reading this, I tend to agree with you.

Well, actually maybe it is still #1, but a fixable version of one. You're getting great feedback. Have to tried dropping the pirce to $225? Or $199?

The other way to go is to do a better job of justifying that extra $1 in price by improving the sales copy on the page, or making the benefits more easily spotted. Maybe adding new images or a video might help? Or getting more/better/more detailed reviews?

Here's a radical idea. Maybe you raise the price more to get people to suspect your product is much better. Maybe the close price leads people to assume these items are similar and everyone is too busy to read why your product is superior.

Anyways, you get the idea. Keep chopping away, keep testing.
 
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jesseissorude

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$2500 in good months then you're spending maybe $20/day on Facebook ads
That is literally my adspend, you nailed it.

I haven't changed spend because I keep changing my audiences (and just switched to a Lookalike Audience) so I was afraid it wouldn't work. ROAS on my recent ads was 1.98. It was 4 in the past :(.
I've never had ROAS < 1 though. They are always profitable. So you're right... I should just do more of what's working.

I have a christmas/end-of-year promotion for Dec, so I'm going to double my adspend for these, then increase it again after the first week (and after I know the new creatives and copy are working well).

Maybe the close price leads people to assume these items are similar and everyone is too busy to read why your product is superior.

That's actually not crazy. Price is hard for me to mess with since I also wholesale through some stores, but I can at least run tests on fresh site traffic. (I could create two identical products at different prices, one hidden, and then run competing ads... somehow... I'll figure it out, I'm good at that.)
 
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The-J

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I haven't changed spend because I keep changing my audiences (and just switched to a Lookalike Audience) so I was afraid it wouldn't work. ROAS on my recent ads was 1.98. It was 4 in the past :(.
I've never had ROAS < 1 though. They are always profitable. So you're right... I should just do more of what's working.

Worry less about ROAS and more about monthly profit. Use ROAS as a campaign-specific KPI rather than a single source of truth about overall business profitability.

It's almost the end of the year: what are you planning to do to scale your FB/IG ads efforts, your IG organic efforts, and your remarketing next year?

What are your goals for next year, and what's it going to take to get there? How do your 1 year goals fit in your 5 and 10 year goals?

What's the plan, man?

I can tell you one thing that's holding you back: you're living off the business. You're paying yourself 30%, presumably to pay personal bills.

If you have to get a job in 2021, that might actually be the biggest catalyst for your business growth because you will (1) be forced to figure out how to fill key positions to save your valuable time, (2) not have to pay yourself so you can reinvest every penny into the business, and (3) free up the mental stress of worrying about bills and shit, which affects your decision making and perspective.

You can't think about 1 year down the line if you're thinking about your rent for this month. It's also very easy to stagnate when thinking this way (I stagnated for years due in large part to this way of thinking!)

Several users here kept their 9 to 5 job so they could build their business and leave that job within a matter of years.

My goal has been a $5k month. With my scaled-back expenses and paying myself 30%, that covers all my bills and spending... so $5k/mo for me represents runway to keep scaling. I still haven't had that Toblerone! (Readers of my thread know what I mean)

What if you didn't have to worry about this? How big would your business grow? How much would you be able to sell it for?
 

steelandchrome

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If I recall correctly you have done well in the past with one off "custom" units? Why not keep the price on your standard units but look to introduce a once a week custom unit or once a month limited edition for a higher price? This could be marketed via IG and your FB feed free and cheap to your existing customer base. I just watched a band do that with their version of this product and released 500 of each color and both sold out in 1 minute. (obviously they have a much larger clout, but the general idea stays the same)
 

jesseissorude

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Dang, thank you all for the discussion. I meant for this to be just an "old man yells at cloud" type of rant, but I now have at least 6 new ideas I can test in the short term.

Have to tried dropping the pirce to $225? Or $199?
I read ECommerce Evolved and the book recommends having a 3-4x markup on your product (more if possible). My costs are $58/unit and 4 x $58 = $232... so that's how I felt comfortable about $230.
I've played with the price in the past ($200, $229, and $270) but I'd like to do something more scientific. I'll definitely test it in the coming month somehow.
Maybe the close price leads people to assume these items are similar and everyone is too busy to read why your product is superior.
That's very possible. I don't have the brand recognition of the bigger guys. I also think my site could be cleaner.

Worry less about ROAS and more about monthly profit. Use ROAS as a campaign-specific KPI rather than a single source of truth about overall business profitability.
After I read that, I looked at my Income Statement for the year-to-date. I make $4 for every $1 I spend on FB ads. Man, I really have no reason not to lean into this. I just think it's strange my competitors don't seem to use FB as much!

If you have to get a job in 2021, that might actually be the biggest catalyst for your business growth because...
I've actually been thinking about this. Even to the point that I went on an interview earlier in the year.
I just feel a little dishonest taking a job knowing I'm going to quit it at the first chance. Then again, I don't need to get a high-paying career job like I've had in the past. I could just get a lower paying gig work job or deliver for Amazon or something.
I just worry that if I'm wasting my time with entrepreneurship and, I'll always be behind in my career. I do think my parents worry about that. Anyway, just sharing my anxieties.

If I recall correctly you have done well in the past with one off "custom" units? Why not keep the price on your standard units but look to introduce a once a week custom unit or once a month limited edition for a higher price? This could be marketed via IG and your FB feed free and cheap to your existing customer base.
I could absolutely do that! Lead time for that kind of thing is 3-ish weeks so I could do the first one in Jan. A blacked-out limited edition version could be cool. My existing customers love to interact with the brand, but I don't give them much else to buy after the first 2 purchases.

Thank you all again for the responses so far. I've got some to-dos
 

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sparechange

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I'm not an expert......

Viral marketing videos?

Can you improve how you are currently marketing your own products? Better demonstration videos for one, and really portraying the value of your product along with making the right offer.

Also creating an affiliate program could be an idea to look into aswell, there is a mini competitor of mine that is doing that, $1m in under a year...

This is of one of my biggest problems right now, although I *think* these are the solutions.

One question you could ask yourself, whilst looking at your own competitors is why should customers buy from me and not them, and am I communicating the value skews effectively enough to steal away those customers?

I looked at my competitors website doing millions earlier today, everything from his marketing, website, social media stuff looks much more professional than my own work, while my product could be better, it doesn't matter, it's what the person visiting the websites perception is of the product. So comparing our stores, I could see some of the market opting for my competitor possibly due to the amazing marketing and copy he's written.

I noticed to there is alot of funneling, I think that's the right word, tons of information on the benefits of the product, before actually making the offer. Talk about pain points, come up with a solution and make an offer. Other brands might be doing a better job than you at all of my examples above.
 

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