Breaking Down The 100K A Year Barrier With Your Small Business
Several of my friends and acquaintances that follow MyWifeQuitHerJob.com find it hard to believe that our online wedding linens business can possibly make 100 thousand dollars a year in profits for selling to such a tiny niche. And they are correct. We don’t make 100K a year. We make much more than that now that our business has expanded and we are more established.
Photo by Borman818
While a six figure profit number might seem like a lot of money at first, getting to 100K a year is actually not an insurmountable task when you look at the number in smaller, more manageable pieces.
In fact, my wife and I initially chose 100K to be our profit goal for the first year because we felt that it was a number we could actually hit. That, and 100K per year was roughly the salary that my wife left behind when she quit her day job.
The key when trying to achieve any large goal is to sit down and break the problem down into smaller chunks and assign a monetary strategy to each piece. Breaking a large problem down helps for two reasons. One, seeing a smaller problem will provide you with the confidence to succeed. Two, dealing with smaller pieces will allow you to make consistent progress. For my wife and I, we broke the 100K number down to a series of daily monetary goals and managed to meet our initial profit target in a little over a year.
Dissecting Six Figures
At the heart of it all, making 100K a year means that you need to make approximately $8333 a month. Assuming 30 days in a month, that means you only have to make roughly $278 dollars a day in order to hit the magical six figures mark.
How achievable making $278 per day is will depend on your average profit per transaction. After doing some back of the envelope calculations and some initial trial sales on Ebay, my wife and I estimated that our average profit per sale for our online wedding linens store would be roughly 50 dollars which meant that we only needed to complete 6 orders a day to reach 100K. Thinking about it this way, 278 dollars a day didn’t sound like a scary number at all.
So with this goal in mind, my wife and I devised ways to hit 6 orders a day as quickly and as easily as possible.
Forum Marketing
The first thing that came to mind was that I could infiltrate and immerse myself in some of the wedding based forums out there. Thousands of would be brides congregate at places like the wedding channel and the knot forums. If I could take the time and ingrain myself within the community, I could drum up some consistent business by pitching our products directly to our target audience.
After getting banned several times from these wedding forums, I finally got the hang of it and discovered that I needed to be more clever when marketing on the forums because the system administrators did not tolerate any sort of self promotion.
I found that by being genuine and helpful to these would be brides, I could occasionally slip a few subtle recommendations and not make it seem like an outright sales pitch for our online business.
Early on, we used this tactic extensively to drum up a few orders a day and establish some word of mouth.
We Used Adwords
If you are starting a website from complete scratch, it can take a good amount of time to get indexed into the search engines. And what happens more often than not is that your website will sit in the Google sandbox for an extended period before it is released to the general index.
Fortunately if you have the budget, you can buy extremely targeted clicks directly from Google using AdWords. Using a fairly intuitive interface, you can create a simple online advertisement in under 10 minutes and have it show up immediately in the search engines.
Looking back, most of our early business came from Adwords. I also remember that in the beginning, we actually spent more on Adwords than we were making in revenues. But gradually over time, we managed to filter out the non profitable keywords from our account and soon we were turning a massive profit from Adwords advertising alone.
Adwords works! It really does. In fact, I think that during our first year when our adwords budget was pretty low, we still managed to make about 4 sales day which cost us roughly 5 bucks per conversion.
We Solicited Testimonials
Once we got prospective customers on our website, it was crucial to have them feel confident shopping at our store. So early on, we gave free product away to our friends and acquaintances and had them provide us with their reviews. In addition, we also sold some of our hankies on Ebay and used the Ebay feedback as testimonials as well. By placing our testimonials prominently on the front page for everyone to see, it made our prospective customers confident that we could deliver quality product on time.
The combination of having a clean looking website and great testimonials along with decent amounts of adwords and wedding forum traffic, we managed to well exceed our 6 order a day quota to make 100K during our first year of business.
We Targeted Wedding Planners
The final boost to our revenues that allowed us to hit 100K was that we gave wedding and event planners special treatment. We went through the internet and contacted these planners directly and offered discounts on bulk purchases of our products.
While this tactic was hit or miss, when we did manage to lock in a wedding planner, it was usually for a large sum of money. In some cases, one order from an event planner exceeded over 5-7x what a typical day’s income would be.
100K Is Within Your Reach
If you take the time to think about it, making 100K a year with your online business is well within your reach. The key is to have a gameplan on how to get there. By breaking down your earnings goal to a daily value, you can plan ahead and figure out how you are going to make your numbers. Using this guideline will also allow you to figure out early on whether your business idea is even viable and whether you need to raise prices as well.
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[...] This post was mentioned on Twitter by True Small Business and Business Coaching, Howard Smith. Howard Smith said: Breaking Down The 100K A Year Barrier With Your Small Business …: While this tactic was hit or miss, when we .. http://bit.ly/1jJP2e [...]
I have to remember to break down large goals to smaller, daily goals and tasks. In terms of $100K+ per year, I think it really depends on your niche. Yours was/is obviously in demand without a lot of competition. I cant say the same thing about mine!
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This post was mentioned on Twitter by TrueSmallBiz: Breaking Down The 100K A Year Barrier With Your Small Business http://bit.ly/1jJP2e…
I love the advice about breaking down those larger goals down into smaller more manageable goals. It’s like the saying goes – how do you eat an elephant? One bite at a time.
Steve, this was a brilliant post. It’s all about the mindset. When you say $100,000 compared to 6 sales per day it sounds so much more achievable. Thanks for the wonderful advice.
Good stuff Steve! YEs, being genuine and truly wanting to help others instead of just spamming your own stuff is key. Glad you share your banning with us.
So, I guess the next question is… around how much does the store bring in +/- $100,000? Are you close to the $250,000 mark yet?
Cheers, FS
Hi Steve! I agree … I shot for $8333 a month instead of $100K, too! I didn’t like breaking it down daily, though – too much pressure for me. But my profit is also between $300 – $3000, so it’s a different landscape in my business. And when I do a launch, I can easily do $5K in a day or two.
I haven’t actually done any paid advertising and have built to multiple six-figures, thanks to a great mailing list and my affiliate program. It really can be done!
Blessings,
Andrea
Great article! Very positive and uplifting for any small business person, online or off.
And yes Adwords does work if done correctly, and at the risk of getting banned a la “Steve on the wedding forums” feel free to contact me anyone for advice on how to go about Adwords the right way.
Congrats to you and your wife, very impressive
I love how you broke it down. It’s true what they say about breaking things down into bite sized pieces… then it doesn’t seem so insurmountable.
Hey Steve,
Once again sound advice. Breaking things down into smaller chunks really helps to avoid making mountains out of molehills and gets you to your goal faster.
Happy to see that adwords helped you get there! Stories like yours go a long way for PPC experts like me to convince small businesses that PPC can get you targeted, cost effective traffic that converts into sales.
I’m curious – with so much success on adwords have you branched out your campaigns onto Yahoo and MSN? The ROI on those engines tends to be quite a bit higher. So even though the search volume is lower for the most part, you can snag some sales at a much lower cost per sale.
Congrats on your success! I believe that $100K can be done. It’s great that you broke your goal down into more manageable ones. I don’t do adwords because I find it almost a full time job just to monitor my campaigns. Your marketing strategy and work definitely paid off!
wow, very interesting breakdown, thanks for sharing!
@Financial Samurai
While I will never publicly state how much we make at the present time, our profit numbers can be deduced based on information from prior articles. If you are really curious, I’ll leave that exercise up to you.
@Andrea
That’s incredible! Imagine what your numbers would be if you ever did decide to do paid advertising!
@Bible @Steven @JMom
Yeah, it’s amazing how much your confidence increases just by looking at things in a different, more achievable way!
@Carla
The niche you choose is definitely a factor but I don’t believe that any profitable niche can remain uncompetitive for long. For example, many competitors have popped up in our territory in the past 2 years alone. I think it’s about making your store unique and compelling for customers for factors other than just price.
@Seamus
Thanks buddy! I’ll keep you in mind if I ever need some Adwords advice.
@Xurxo
About two and a half years ago, I gave Yahoo a shot, but the interface was so horrible compared to adwords that I was immediately turned off by it. I had some free credits so I let it run for a few months but never really got many clicks and very few conversions. Ultimately, I decided to focus my energies on Adwords. I have yet to try MSN however. Maybe I’ll give it another shot now that they have Bing
@Evelyn
Thanks! I find it odd that you found it a lot of work to maintain your adwords campaigns. These days, I check up on my adwords only once a month depending on the shopping season.
Steve,
I hear ya on Yahoo’s interface being horrible and complete turnoff. Don’t get me started on customer their support either!
Just the same, the returns have time and time again been worth the effort for our clients and the same can be said for MSN especially now that Bing has gained some additional market share.
In Yahoo’s case, they default you in to their content network like Google but unlike Google they only have 2 keyword match types – standard and advanced. You’ll want to make sure you’re on standard to begin with as that’s closer to Google’s phrase and exact match and will get you better quality traffic. Advanced is the equivalent of broad and is of course on by default which is likely why you didn’t get good results with it the first time around.
As always, just give me a shout to let me know if you need a hand with either of the three engines…
@Xurxo
Thanks a lot! When I start using Yahoo and MSN, I make take you up on the offer!