Save Your Business
Sometimes life (and business) can feel like a roller coaster.
Let me explain…
Last weekend was one of the best weekends we’ve ever had for our new business.
We held our second WishList Member LIVE workshop (which was a great success) and we also had one of our most profitable weekends in sales of WishList Member.
So needless to say, my business partner (Tracy Childers) and I were flying high as we took our families on a mini vacation to Niagara and Toronto following the seminar.
It was a blast and we had a lot of fun showing Tracy and his family Southern Ontario.
Then yesterday my wife and I got the news…
(this is where things went from awesome to not so awesome)
The agency we were using for our adoption just filed bankruptcy.
That basically means we (and over 200 other families) have lost all the money we paid to adopt a child from Ethiopia (which runs into tens of thousands per family).
However, the money is one thing but the thing that hurts the most for Amy and I is the fact that we’ve been waiting for such a long time for this to go through and we were VERY close to being paired up with a child.
Now everything is up in the air and it’s likely that we’ll have to start all over again.
It’s still early and there are a lot of questions that need to be answered but from what we’ve heard it doesn’t look good.
Obviously we are heart broken and we are looking into every possible solution to resolve this so that we can perhaps be paired with a child as quickly as possible.
What is SO frustrating about this situation is that the bankruptcy documents reveal a lot about how the agency was poorly managing their business.
They had expenses that were way out of whack (like expensive cars, riduculous rent and even fancy fish tanks for their office!). These totalled thousands of dollars and ultimately left the company extremely cash poor.
One of the first lessons I learned way back in my first entrepreneurial class at university was this…
When it comes to running your own business, the most important thing to remember is CASH IS KING!
It’s so true.
Without a steady stream of cash, you can’t pay your bills.
When you can’t pay your bills, you quickly fall behind to a wide vareity of creditors which immediately limits your growth potential.
When that happens you don’t have any money to invest in new projects or marketing.
No marketing = No Growth.
No growth = Slow Death for Your Business.
You’ve got to have CASH FLOW people!
Spending your cash on stuff that isn’t necessary (like fancy fish tanks) should NEVER enter your mind unless your business is extremely cash rich.
If it’s not, then save your money and invest it into your marketing.
So how do you increase your monthly cash flow?
My next statement is going to be biased but it will give you a clue…
Membership Sites, Continuity Programs and Monthly Services
Obviously I’m biased because our company has a WordPress membership plugin that makes creating a membership site very easy.
But let’s just look at the concept of a membership site or a continuity program.
You provide something every month and people automatically pay you until they cancel.
Most business models are the complete opposite.
The old model is to work tirelessly to make ONE SALE.
Then they HOPE that the customer will return to purchase more.
I don’t know about you, but running a business on “hope” doesn’t sound too profitable (or stable) to me.
And you see this happening all the time…
When Tracy and his family were visiting, we took a walk down to the beach in the town that I live. During the walk we passed a wide variety of different businesses and one of the questions Tracy asked was:
“How do these business stay alive?”
Honestly?
I don’t know. I mean “walk through” traffic picks up when the weather is good but these businesses rely on people walking by and coming into their store.
Folks, this is the OLD way of doing business.
It’s not effective anymore.
It’s reactive NOT proactive.
You’ve got to create marketing systems to keep people coming back on a regular basis. If you don’t, you’ll always be “hoping” that things will work themselves out.
That’s why I love membership sites.
They’re automatic and they create a predictable cash flow.
…PLUS…
The profit margins are extremely good.
Now I know what you are thinking…
“But Stu, not all businesses can create a membership site”.
My Answer: Yes they can. Think Harder
Seriously.
All you need to do is think a little more creatively about how you can turn a one-time purchase and into a regular monthly purchase.
Think “monthly clubs”.
Think “preferred customer” discounts.
For example…
Last year I was consulting for a “healthy fast food” chain that sold Pitas (similar to a Subway). One of the first things I advised them to do was create a “Preferred Pita Club” where the store collected names and emails of customers who wanted monthly discounts.
It worked like a champ and this one program immediately created a predictable flow of customers coming back into the store on a regular basis.
If I were still working with them now, I’d advise them to take this same concept a step further and CHARGE PEOPLE to belong to this club.
For example, would you pay $10 a month if I gave you $15 in coupons?
For sure you would – especially if you liked the store.
It’s like buying money at a discount.
But for the store, it creates a predictable flow of cash coming into the business every month.
…AND…
It dramatically increases the number of customers coming back into the store to spend money with you every month – something that was otherwise left to “chance”.
Remember, it doesn’t always need to be fancy. It just needs to be implemented.
When you look back at the adoption agency, the lessons are obvious:
- Focus on Managing Your Monthly Cash Flow – If you don’t, you’ll fall behind financially and this will quickly limit your growth potential and could possibly lead to bankruptcy.
- Create A System For Monthly Sales vs. One-Time Sales – Membership sites, continuity programs and monthly services are great because they create a predictable flow of revenue EVERY SINGLE MONTH. It eliminates the “hope” that so many businesses rely on for their monthly sales. Stop hoping and start taking control of your business.
If our adoption agency had followed these two tips they would have saved their business and prevented so much heartache suffered by all the families involved.
My advice to you: Save Your Business Now by reviewing your monthly expenses. Look at how much cash is coming in and how much is going out.
What can you do right now to increase the cash flow coming into your business?
What can you do right now to reduce the cash going out?
Also, look at how you can improve your cash flow by incorporating some kind of “ongoing sales” program. It doesn’t have to be a membership site (although those are the easiest) but it’s the concept of turning a one-time sale into a recurring monthly sale.
Make sense?
Now, let me ask you…
What other examples have you seen where a business took a one-time sale and turned it into a ongoing, recurring sale?
Let us know by sharing in the comments.
All the best.
If you are looking for a fast, easy and user friendly solution to create your own membership site, you’ll definitely want to take a close look at WishList Member. Click below for details.
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About The Author
Stu McLaren helps small business owners make more money with their websites, membership sites and affiliate programs. Get Stu’s personal advice on your site by visiting Instant Business Answers.
Other Websites
www.InstantBusinessAnswers.com
www.WishListMember.com
www.MarketingWebGraphics.com
www.BasicListBuilding.com
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First off, Stu – I am so very sorry hear of this sad, avoidable event for you and your wife to endure. Endure you shall– and prevail you will, however. God is working some plan inside of all of this and a small part of you are sharing with others here with us all. That rocks.
Second, congratulations of the second WL event – the one I attended with Jon Bard back in April was truly amazing(so much to share w/ you in the coming months w/ my launch, btw..)….our Colorado mastermind that came from that event is growing and impacting us all.
Third, let me know of what you are thinking your next step will be w/ the adoption. I am involved a group called Passion Africa, made of regular people who are entrepreneurs who have a passion to make an impact on the African continent. Amazing stories w/ the members. Many of them have adopted or are in the process of adopting children in Africa and there is a wealth of experience there I can hook you up with, if you want. What’s different w/ PA for you and which you share a kinship with is that these people are like you and me – real people creating small business opportunities or just flat-out charities for Africans and changing lives for the better through empowerment and love. If you think this may help, drop me an email, Stu.
Question: just noticed a cool new plug in that allows people to subscribe to your ‘Insider Ideas” newsletter – what is that plug in?!
GBY!
Bruce
Hey Stu,
Malia and I send our love and encouragement.
We read your news with some sadness for your loss, and how hard it must be to be so close, yet so far away to this adoption, but with some joy for your attitude that continues to be one of eternal optimism and hope.
Ever since the first time that Malia and I met you, you have demonstrated some deep character and attitudes that I know can only be developed by life’s challenges and a proper response to the circumstances. You both have taken a hard personal lesson and turned it into something to benefit your friends, family and fellow marketers..
Thank you Stu. Malia and I pray that the deepest desires of your heart and your dream will be fulfilled.
David & Malia McKinney
P.S. I am adopted and was brought into a wonderful family. I appreciate your heart and what a great family for any child to be brought into..
Great post Stu! I enjoyed this
Great advice Stu!
You really have my heartfelt empathy for what has happened regarding the bankruptcy and you are right, people just have to shy away from instant gratification when they first start up in business.
You’ve made me put some more thinking into other continuity programs I could run and one of them has to be similar to the program you run for Instant Business Answers … I consult with businesses on getting their blog up but people are always needing “how to” advice on marketing online.
Thanks for making me “Think Harder!”
Trish
Stu,
Karrie from the WLM class last week.
Sorry to hear about the adoption, sometimes when one door closes another one does open, it might look a little different, so be watching.
About the WishList Memeber Training event, I came home filled with great ideas. Timely info and really appreciated the extended insights into your membership software and concept that you and Tracy so graciously shared. (and Greg and Ray too)
RE: your post: Living within your means, doing business within your means…. means cash in your pocket to leverage. Good thoughts in your post as always.
Karrie Ross
Hi Stu,
I’ve had friends, and relatives, in your situation so I’ve seen the disappointment many times. My heart goes out to you both.
This thought became clear to me as I read your message. We all have limited sight of a mountain when we’re looking up at it from it’s base. Even though we might think we know a lot about it, we might not have really experienced the mountain at all except from a distance. Unless we can draw close enough to it; as in reaching for its tree branches, pulling ourselves through its rough terrain, or letting it take our breath away while watching the colors of the sun rest behind its clefts, our beliefs would stay narrow and unchanging.
So it is with life; unless we’re truly experience something, or someone, we may not be able to know it in such a way that brings a much deeper understanding. Everything you do, and share, is all a part of a deeper understanding.
I’ll be talking to you again soon about your WL for my new continuity program. You opened my eyes…again.
God Bless You & Amy both.
Kellie Frazier,
Connecting Coach
Stu – so sorry to hear about the adoption and the many people impacted by it. Unfortunately it’s a situation we’re seeing all over with the “economy” – I’m not sure it’s as much the economy as that people are having to be realistic – and many have never done that.
I agree – continuity programs are great. As you know, I have 10+ sites running wishlist and continue to add them rapidly. They are fast and easy to set up. It’s opened up the world of continuity to a lot of people. So thanks to you and Tracy.
Keep us posted on how we might help – our thoughts are with you and Amy.
Jeanette
Stu, thank you for turning the sadness of your story into something from which we can all learn. (Will be praying for a good outcome for your and those other families.)
I am working on my own continuity program and very excited about it. A Wishlist member site is on the to-do list as well. (In the meantime, people can sample my “Author Success Plan” of more to come (this one is free). You are so right about having something to provide a stable base.
Diane Eble, “Your Book Publishing Coach”
Hi Stu,
So sorry to hear that your adoption plans fell through. In my heart, I do believe that good will eventually come out of this situation and that you and Amy will be united with your ideal child.
Very sound business advice as well. Too many businesses are doing things the same way they’ve always done and hoping that they’ll survive this current economic downturn.
Great to hear that WishList Member LIVE is doing so well.
Best wishes
Nickolove
Stu & Amy – So sorry to hear the news. I know you’ve been working on this for quite sometime and pray that it will turn positive for you both!
It’s amazing how you can turn something negative and make light of it and explain in easy terms the benefits of running an ethical business.
I agree membership sites are an awesome way to generate income month after month!
I am so sorry about what happened – I would never have imagined that an adoption facilitating agency would go bankrupt. A company selling something, maybe. But not an adoption agency. But it is something to pay attention to for anyone readying to adopt, that is, check the agency ahead of time, watch, look, listen. I have helped with adoption tours over the years in China, and have never heard of your plight. As many of your friends have said – it is hard to see the divine plan in all this. Perhaps you are saving many others from having this happen to them? Perhaps you will raise awareness for adopting families? Thank you for sharing this. It is a real eye opener.
I see that you are involved in many good things. So here is a question for you. Do you have to sell things to have a membership site that works? I work with two groups in China – one that helps train teachers in braille so that extreme poverty area blind and vision impaired children can attend school, and another that helps low-IQ kids in a coal mining town get a good education. Do you have recommendations for creating a site for projects like this?
A cloud of peace floating to you, and thank you for your kindness-
Elyn
Hey Stu,
Sorry to hear about the adoption it does impacted a lot of people (You & Amy, Other families, but mostly the children)
This was a story that was published in our local paper from a couple out here in the west
http://www.edmontonjournal.com/life/Agency+folds+puts+couple+adoption+plans+hold/1796346/story.html
We are just starting to plan out our membership site. But the sound advise in the post will help us.
Our thoughts are with you and Amy.
–Pat & Lorna
http://TheCoolestCouple.com
Thanks Everyone for your kind words and support.
We are desperately scrambling to hopefully salvage everything we’ve done up to this point with the adoption and with a bit of luck, we are hoping that everything will work out.
It’s just so heartbreaking because all of this could have been avoided by paying attention to some business fundamentals.
I don’t think I mentioned this in the article but the other MAJOR reason I love membership sites (and digital products in general) is because of the profit margins.
There is no other business where you will find profit margins like we experience with a membership site.
Just look at the hard costs of most businesses. If they are lucky, they will walk away with a 20-30% profit margin (if they are lucky).
We on the other hand give away 30-50% for affiliate commissions and STILL walk away with 50-70% profits.
Crazy.
Can you see why I like memberships so much?
Anyway Amy and I REALLY do appreciate all of you and your heartfelt comments.
We’ll be sure to keep you posted.
All the best.
Stu
Stu,
I also offer my sympathies to you and your wife, and I hope you can end up using this experience to grow more as a person.
I also must say that I love your wishlist membership product and use it all the time!
Thanks,
Jason Fladlien
Stu,
I do understand what you and your wife are going trough…but I often wondered..why one would choose to adapt kids from far away countries when we have thousands of poor kids here in Canada?
All the best.
Ivan
Hey Stu, if having monthly cashflow is so important than how come there isn’t a hosted Wishlist Member yet? Or even a monthly fee for the self-hosted solution? (Just yanking your chain…)
But I am totally in agreement with you… fish before you’re hungry and put a MINIMUM of $1000 into savings every month regardless of how much you make.
If you make $1500 every month, then your expenses need to be under $500… and that might means you have to work a day job or freelance UNTIL your hourly rate increases when the one-time products or membership sites catch up to that same level of income, but so what?
I put away 2 years worth of income into savings before quitting my day job so that I can spend more time creating bigger ticket items and membership sites and not have to go out of business like that charity did…
BTW, here’s the video you made for me at Wishlist Live in Buffalo…
http://www.youtube.com/watch?v=MYrsNJF20Kk
Thanks again! Sarah loved it.
My condolences on coming up to such a big hurdle in adoption. Obviously, from the way you write your blog, that’s not going to stop you – so good on you. I hope you look back one day & find that this situation was a gift in disguise. It’s funny how often that happens, even if it isn’t much comfort at the time.
I’m in Australia, so we have a bit of a different situation down here – it’s illegal for adoption to involve ANY money. The agencies are usually social service type ones instead of businesses per se, and having been a birth mum with a fantastic experience of finding a home for my son 12 years ago (long story on why, but it’s worked out really well, and since it’s all open adoption here we meet up at least twice a year) my heart goes out to someone whose journey hasn’t gone so smoothly.
Best wishes on finishing that last leg…
Crystal
Hey Stu
Where art thou? we made contact some time back where I was wanting to purchase a copy of your “Affiliate Inferno” training course, and you sais it was good to get back to you in a months time, have been trying to get a hold of you but with no luck, cant seem to get any one on the phone, voicemails cant be left, i did however manage to get through to someone in support and they promised me that the whole course would be available to download once you folks moved servers or something which should take a couple of weeks, well 2 months later and no one has still managed to get back to me?
Please let me know how I can contact you directly to talk about this matter?
And great post by the way, and just remember everything happens for a reason, and that reason is there to empower and support you for a much bigger and better outcome.
I hope you get this cause I am running out of options to try and get a hold of you.
Thanks
Morgan
Hey Morgan,
Thanks for your comment.
The reason we haven’t made the Affiliate Inferno course available was because I was in the middle of negotiations to sell that entire business..
It didn’t make sense to do one final sale as I wasn’t going to be supporting or updating the content.
I’m proud to say that the business has now been sold to my partner on that project Russell Brunson.
I’m not sure what his intentions are at this point in regards to selling it but you can contact his office by going to http://www.DotComSecrets.com.
Hopefully that helps.
Take care.
Stu
Hi Stu and Amy,
I am very sorry to hear this sadness, you and Amy that your dreams been in three end up in pain.I play that your dreams in three will come true in life time.
rgd
Eunice
Hey Stu
Thanks a bunch for getting back to me, but its like AAAARRRGGGHHHH , now I will probably never get my hands on a copy, does not matter if it was outdated and no more support will be given, just wanted the content, I have contacted Russels offices before but got know where with them on trying to get hold of a copy, hence why I was in contact with your support guys for over 4 months, and then found out that I can’t get it from you guys anymore….
You don’t have a spare somewhere do you to pay for : -)
If not, I have no idea how to get a copy now, as I don’t think Russels side would be able to help me out much.
Anyway thanks
Morgan
Gosh darn it! If I live to be a hundred, I’ll never understand why bad things happen to good people. Adopting a child is one of the most selfless and loving things a couple can do. I just hope the next agency you hire has their business management head screwed on straight.
Stu, I realize my name won’t sound familiar to you. But you and I have a mutual friend in Connie Green. She mentioned your name in her most recent blog post so I just had to look you up on Twitter!
Hoping our social media paths will cross again and again,
Melanie Kissell