the "how to" for consistent growth

okay this is the howto for consistent growth um my camera's messed up may look like I'm in a fishbowl but it is what it is um my phone's at also at 5% so it's not going to be a big video but with that said um last month my business did 250 grand um this year we should do 3 million and that'll bring us to about 6 s million on this current brand okay so the howto for consistent growth and more specifically what I want to focus on here is new customers versus returning customers and how

you are able to scale your business faster while actually increasing your profits as you scale sounds impossible it's not apologize for vehicles in the background windows open how was here okay here is a beautiful chart okay this first line I'm going to draw we're going to call this we'll go different colors actually why why don't we here right let's go like this green this is going to be our new customer acquisition let's say this goes up and then you stays the same it go down at times goes up stays down at times goes up again

and then stays down and but overall it's pretty consistent now as you get better at your marketing and making better ads and expanding channels and things like this um you acquire more new customers every single month okay sometimes months are better other months are worse overall it should be slightly improving as time goes on but it's relatively consistent okay now at some point it'll be relatively consistent when you're starting out you should be able to go through better marketing if your products good to go from spending a couple 100 a day on your ads to

hopefully a couple thousand to 10,000 something along those lines right um and that's when you're going see the bigger increases here but for this example let's say your new customers this is new customers it's fairly consistent growing over time but it's pretty consistent month over month okay now we're going to go with your returning customers okay return rning oh yeah customers oh my Lord do not judge that so you're acquiring new customers now you start getting returning customers how this should look is something more like so you're going and then it's going and it's going

and it's going and it's going and boom it keeps going it's exponential okay so why is this right well as you acquire new customers you have more customers coming back and repurchasing right and then let's say this is month one two three 4 five six that's usually going to be longer than this but just take this for what it is that's a five by the way um take it for what it is so month one you get new customers people aren't really buying again month two some come back and Reby month three some Reby month

four some are re buying month five maybe people who have rebot in month two are also coming back and buying in in in month five or month six for their second third fourth purchase Etc right cuz some cohorts of your customers will come back and buy not just once not twice not three times four times five times Etc and that's why this is exponential and the more new customers you get the more returning customers that you get right and the beautiful thing about this is we don't need to spend money on Advertising to get a

purchase from the returning customer okay and this is how your margin and your profit actually increases as you scale and how you can grow your business even if your new customers let's just say stayed consistent straight line month over month this would still go exponentially grow your business and increase your profits okay but what happens is as you increase your profits from the people coming back and repurchasing because we're making more margin on those two because we don't need to spend money on ads to get that purchase um we can take this money and now

we don't need as much of a profit on the first customer right to make the profit for our business and so let's say um you sell a product for oh you guys can barely see that did not even realize that my bad you sell a product for 100 bucks cost you 50 you're left with 50 this is all cost by the this is your payment processing fees your packaging and insert slips you do handling everything so this is 50 so this is your break even new customer cost per purchase ncpa this means you can scale

up to $50 on Facebook on Tik Tok or whatever to acquire a customer right if you go past that you're losing money and when you start your business and you have no returning customers if you scaled up to 50 you wouldn't make any money you would just be break even right and let alone you have fixed cost right you have your software you have a Shopify plan you have Shopify apps you have to invest into content maybe you have some employees at this point a VA customer service agent Etc so you need to profit some

money because you need to cover your fixed expenses and then you still want to make a profit on top of that right so this is why when starting out maybe instead of 50 right your target it's called T Target on Facebook or whatever is a 30 you're looking for 30 ncpa because that means every purchase you're making 20 bucks and let's say that gets you 15 20% 25% net profit at the end of the month for your business right great now when the repeat purchases start coming in right your margin because now we're getting more

purchases sales increase orders increase without us having to spend more on ads we're still at the 30 right we're still at the 30 so this is staying the same but now we have more money coming in and so we're profiting more so now maybe our margin goes up to 30% profit and you say hey I don't need to profit 30% at 50k per month or 100K per month because I'd rather profit 20% at 200k per month or 250k per month right and so what happens now is because your margin is at 30% you don't have

to go to a 30 anymore to make that money because you're making the profit on the back end of your business and so now instead of your target being 30 your target could be 40 could be 45 could even be up to the 50 now as you improve your backend your business and you have more repeat purchases and your LTV grows um you're able to go all the way up to the 50 and what that means now is we're able to scale our ad spend until we have new customer cost per purchase of Break Even

because it means our backend Revenue creates all the profit we need in the business to make 15% 20% 25% whatever that number is for you whatever you want it to be right you decide on what that number is for you then you set your target accordingly based off of how much you need to profit on the new customer okay but this is why businesses at scale who are doing serious Revenue aren't running their Facebook at a two row or three r or four row in fact we did 250k last month uh we netted I think

it was 18% last month net profit don't quote me on that um 18% and I think we ran our Facebook at like a 1 three row as right and our break even is closer to about a 1.6 including all fixed costs and things like this so you may say well you're losing money well no because we have Google and email and these other channels and so just because our Facebook ncpa let's say in this case would be an 80 our overall new customer Coster purchase for the business is a 50 and that's all that really

matters at the end of the day the overall metric for the business now if you have no repeat purchases you have no other channels and it's just Facebook well then your Facebook will have to be out of 50 hopefully this is making sense right and so as you get these new customers your profit margin increases and now you don't need to profit as much on the first customer which lets you spend more ideally you eventually get it up to break even so now you can spend up until break even on a new customer and what

this means is well a lot you get to acquire a ton more customers because you're going to be able to spend a whole lot more money at a $50 cost per purchase than a needing a 30 right that 20 Buck increase in that cost per purchase may be 5x your daily spend right especially if you have other channels that are also getting purchases like Google email Etc then just because your Facebook cost per purchase may increase fast this overall business new customer cost per purchase won't be increasing as fast right and that's how you're going

to able 3 4X 5x your spend okay hopefully this is making sense sense so the goal is when you're doing less than a million per year at first is how can we I apologize windows open if you can hear people talking right now I should scream at him or something oh they actually actually stop talking anyways so a Friday night at like 10 p.m by the way and this is what I'm doing so yeah don't mind me um so when you're going from zero to a million you need to focus on getting consistent new customer

which usually means getting a good product product Market fit and getting good at making ads and running ads um and running ads is pretty non-existent at this point you kind of throw them at the whole country broad targeting and if your Crees are good it'll work if your product's good it'll work so you get good at that first the first goal is okay how can we get this to be consistent at least consistent now once again most likely it'll have ups and downs and things like this but in general month over month you should be

acquiring new customers at a pretty consistent rate and that's going to get you to a million per year that's going to get you to over 100K per month right but at that point maybe a little bit before this maybe a little bit after that um depending on your margins your product Etc um you're going to hit this target pretty quickly and now that you're at this target we are at a big issue here because we can't spend anymore because we need this money to make profit and we don't want to not make profit when running

your business because that would be dumb and I've done that before absolutely done that before where I'm like okay I'm just going to spend more money spend more money I want my Revenue to look amazing because I was there's a FL in the light now um because I was ego driven I was okay I want I want the 100K per month so bad that you risk or you put your profit at risk to do that don't do that you want to make money right so once you get to this point you can't go past this

point because this is your target where you make 20% profit let's say maybe you're fine with 15 and okay if you're fine with 15 you can go to 35 but you're still stuck there you're still stuck there right and this is why people can't scale or people coming from the Drop Shipping World um I started there as well um you're very focused on how do I get more customer how do I get more custom how do I get more customers but at some point once you get good at acquiring customers you need to turn your

business or your one-off product business into a real business that gets repeat customers by introducing new products by introducing email email marketing SMS marketing some Google search by building a connection with your your customers building a community things like this will help you increase your repeat purchase rate your returning customers and then once this gets exponential you can scale to break even on this and your profit keeps increasing and then you can keep putting that some more ads to grow your business or you could hire people you could hire agencies you could go into new

channels whatever right but this is what's important okay this part here is what's the most important part getting this and this is also why also also why if you have a product as your hero you know your front end offer your hero product if it's a subscription based product or it's a consumable like a supplement where people need to come back and keep buying from you as you get more customers this exponential will take off faster the LTV will grow faster and hence you won't be as reliant on having to make as much profit on

day one okay so hopefully this is making sense it's also why product is everything um having and building an actual business having an actual business model that um can let you cash flow and scale makes everything more important um last note here is your margin right like here you have a 50% margin cost you 100 or sorry uh you sell it for 100 cost you 50 that's not an S that's a that's a five five Zer you're left with 50 50% right however if you could sell it for 100 but only cost you 20 and

you're left with 80 then you can scale up to 80 to break even or maybe your 20% profit here is like a 65 cost per purchase right and you can see how the margin and having an actual product and business model that works at scale actually makes you money um versus a one-off product with ship margins which is most of these Drop Shipping products um limits your ability and why you eventually get outspent by competitors CU if I could spend up to 80 bucks to acquire new customer and you have to spend 30 who's winning

I am right so once you have the back end built out you're getting returning customers you have a good business model you have margin we say business model it means you have an LTB you have customers repurchasing you have other channels that are able to make money on the back end right and this allows me to go up to break even on my new customer cost per purchase or close to break even it makes me not as rely on having to profit day one um and once again if I could spend up to 80 bucks

to get a new customer and you can only spend up to 30 or even only up to 50 I'm going to win every single day of the week okay so hopefully this is making sense so this is how you increase your margin as you scale this is the how to for consistent growth um hopefully you learned something um if you're in a position where your product is a one-off figure out ways where you can introduce new products where you can increase your aov where you could get sales on the back end um figure out a

way you can introduce a subscription based product things like this right you have to be thinking big picture now hopefully you can't hear the police but maybe you can I'm downtown Rome it's a little little hectic um so with that being said find ways to improve your business model increase your LTV in increase the percentage of customers who come that repurchase now if you are once again less if you were doing less then minus equals less than big dollar sign big 1 m per year you're doing less than a million per year Focus only to

starts on the new customers acquiring new customers if you're not at a million per year yet it means either your product your website and product page is or your marketing is just now in most cases if you picked a product that's already selling for certain people where you don't have to compete against massive 9 10 12 figure Brands right there's only a few key competitors you know they're making money they're running lots of ads you have good margin on your product there's demand it solves a real problem you you did market research it's trending upwards

it's not going anywhere and you picked a good product to test in most cases your marketing is the thing that's going to be the issue in most cases that means your ads your marketing your copyrighting your direct response knowledge is pretty big down arrow big sad face and therefore you can't get new customers consistently getting new customers consistently at a profit will bring you to a million per year maybe a little bit less maybe a little bit more depending on your product your margins Etc once you get here you need to change your focus because

now you know how to acquire customers consistently you need to change your focus to returning customers and start building this over time where this grows exponentially your profit grows as you scale your business grows even if you don't change anything on your ads in the front end you don't even change your ad spend on Facebook or Tik Tok or whatever your business grows because your LTV grows you get more repe purchases and now you have all this money and profit to put back into acquiring new customers um hopefully this makes sense um hopefully this was

a value took me way too long to learn this so hopefully this gets you there somewhat quicker okay so hope you enjoyed hope this was somewhat helpful and if it was let me know what else you want to learn um yeah and I'll keep you updated 250k last month 3 million this month ideally because we did 250k first month of the year if we stay the same we should be at 3 mil ideally we should get close to 3.54 5 million this year um so let me know if there's any questions and hopefully it was

of use until next time see y