What metrics are worth tracking? and what aren’t?
I tend to be a numbers guy.
And lately I have been trying to get a handle on our metrics.
We just reached pretty consistent $10k per month revenue for asweetpeachef.
However, there have been a few blips on the way where we have fallen back down below.
Sometimes even drastically.
I have always had the goal of getting to six figures that seemed like a good starting point.
Not really sure why I felt like that legitimized the business but for some reason it did for me.
It has been stressful and time consuming to get here.
We worked long hard hours. We worked weekends and nights. We worked with the kids around and without.
Sometimes we fought but still kept working.
So it feels good to reach that goal.
But something was still missing.
After getting this goal on track though Lacey and I realized that we were still stressed.
Then after listening to one of the podcasts on Screw The Nine To Five we realized why. We were tired of starting over every month.We were tired of starting over every month. Click To Tweet
Each month was basically starting from scratch. With the exception of our meal planning service.
Which meant that with a loss of traffic or one of our sponsors we would feel that dramatically.
So a few months ago we got to work thinking how we wanted to fix this. We decided to pivot our 30 Day Healthy Program a little and change it to be more of a membership site.
Something we were calling Take Back Your Health Academy.
We spent January setting everything up and then opened it in February to our existing 30 Day Healthy Members.
This soft open allowed us to work out any bugs and get some feedback before really pushing it in March with 3 webinars, charter pricing, recurring content etc…
And that leads us to this instagram post.
Where I first mentioned this challenge to myself.
Getting Started With Metrics
First off when getting started with metrics you really need to know which ones you care about. We had grown our revenue and kept our expenses pretty low about 20% before payroll (yup we have payroll software now still can’t get over that).
In the beginning I only cared about two metrics revenue and expenses.
Usually cause we were upside down and I was personally paying extra to cover stuff we “needed.”
So about a year ago we started caring about more than that.
Focusing on making a profit and growing revenue sometimes taking on more than we really should but fixing the bottom line.
With Monthly Revenue usually over $10k we decide to take stock of what is actually for sure coming in the next month.
The Dirty Truth
When we looked at this we were floored almost all our revenue was tied with work for hour tasks or ad revenue. This just wouldn’t do what if we lost all the traffic from google or pinterest.
Or even worse Lacey had to take time off for some reason.
Or we lost a sponsor.
Ouchtown population you bro.
Am I the only one that thinks in terms of movie references when evaluating my business models?
So this is where Monthly Recurring Revenue enters the equation.
Monthly Recurring Revenue
Monthly recurring revenue is actually a pretty simple concept it’s the revenue you have that’s recurring. Specifically, for us it was our meal planning service.
If you have a $10/month product and 4 people signed up your MRR is $40.
Usually, if it’s an annual recurring then that payment is broken out over the year so if you had one person on a $240 a year plan the MRR is $20
So with this in mind I remembered something Jason Van Orden from Internet Business Mastery had told me about finding people we resonated with in our niche (pinch of yum) or people who had a business model and style that fit what lifestyle we wanted to create (screw the nine to five).
Both of them had a recurring offer that cost more than our current meal planning service and had a lot more interaction with their customers on a daily basis while helping them meet their goals.
We were super excited to implement a healthy lifestyle version of these membership sites.
Which led to the creation of the academy.
Average Revenue Per User
Ok so the next metric that is worth taking a look at is average revenue per user. This is pretty simple to calculate it’s just the MRR/# of customers. This is useful to see since it gives you an idea for what plans your customers tend to wind up on.
For us it merged the meal planning tiers monthly and yearly with the academy and we usually are around $20.
I have some ideas for how to increase this which will help with the challenge of getting to $5k in 3 months.
The last metric I’m going to introduce today is the lifetime value one. This one is super important too. This is how much on average each customer is worth to you.
For us this number is around $100 usually.
This tells us that most people that buy from us buy on average $100.
Why is this important?
When we dive into Ads later we know what we can pay to acquire a customer.
See massively useful.
Setting Up Baremetrics
I love stats always have. I can remember staring at the back of baseball cards when I was a kid lol.
So I have an excel sheet that I use to track our revenue, expenses etc.
I use to calculate out how much each customer was worth to us, what our cost per lead could be all that good stuff.
Over time it started to get complicated.
I wanted an easy way to deal with all of this stuff.
This is Where Baremetrics Comes In:
Basically, baremetrics does all the calculations for you and shows you them in this nifty dashboard.
Pretty cool too I can share this with Sean and Lacey so they can see what’s going on.
Plus it integrates with slack which is sweet.
So a month and half into setting everything up we are at $604 MRR which I’m pretty happy with my lo goal was $500 and my stretch goal was $1,000 so pretty much on track.
Up next the challenge.
Like I said before my main goal for this year was to grow the business to 6 figures.
With that on track already I felt like I really needed new goals.
I started to do some math and realized that if I could grow the business to $5k MRR then the business would make more than I did at my job.
Seems like a good goal right?
Ok. So how long is reasonable? Well so far our best month was adding $600 MRR so I figured $1k MRR per month seemed like a good goal.
Well I always like to make things harder on myself for some reason lol.
So, instead of that I decided how do I do this in 3 months.
And to make matters worse (or better depending on my mood) I stuck this challenge out there publicly in an effort to really motivate me.
I mean who likes to fail anyway much less publicly?
Man I can’t stand it.
Month one is going to be about fixing some of our systems on aspc and building out more of an audience. Especially growing the audience here on Married To Your Business and tying it into A Sweet Pea Chef a little more.
There are also going to be some surveys for Married To Your Business and working on FB Ads for A Sweet Pea Chef.
I want to make this site a full behind the scenes of A Sweet Pea Chef and how it works.
This is more growth and building out one entry level product for ASPC that sits in front of the academy and a new recurring offering I have in the works. There will also be some work here for automating the process of purchasing the entry product and moving to our core offering.
This is where we launch the new recurring offering and really ramp up the automation on ASPC’s sales funnel. There will be lots of FB Ads, marketing, hopefully a few podcast appearances etc…
Over the next 3 months there will be a bunch of posts on all of theses pieces with updates on how we get there. I look forward to sharing this journey and hope that it inspires you to step outside your comfort zone and work on your own challenge.
If you want to take the leap with me share your challenge in the comments 🙂
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