Ep #333 – Nobody Else Will Tell You This HARD Truth About Online Business

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Emily Hirsh:

Hello, my friends. Welcome back to the podcast. I hope you guys are doing fabulous. It is a beautiful, beautiful fall day here in Austin. I’m always so incredibly grateful when the temperature drops into like the fifties in the morning and the wind is blowing and it smells like fall and the crisp air. It doesn’t happen here until November, but once it’s here, I’m so grateful because that means the summer is over and I cannot stand the 90 degree heat here. And I just love to be outside in the fresh air. So I’m so grateful. I’ve been really enjoying my walks in the morning. They’ve been a little bit cold, but I’ve been enjoying that fresh air so much. And my cold shower has gotten a little bit colder, which is good. Nothing compared to Colorado. For those of you guys who don’t know I’m on day, like 250 in a row without breaking my streak of doing a five minute cold shower, it’s a game changer.

I absolutely love it. Wakes you up, makes you feel amazing, impacts your immune system. You can research it if you’re interested, but I started doing it because of the Hard 75 Challenge. And then I basically just never stopped. And I’m a big sucker for having streaks. I’m kind of crazy about that with my habits. I track it in an app and it’s like, “I can’t break my streak!” Especially when I’m that far in. I told my husband, “the only thing that would probably make me break my cold shower streak is if I had a really bad fever.” So, until then, I’m hoping I can get to like a year straight of cold showers, which should be pretty cool. So I did them in Colorado when we were staying there, oh my God. A Colorado cold shower is like nothing compared to a Texas cold shower.

I also have done them in Colorado in the winter. It is like basically just dumping ice all over your body for five minutes. It’s crazy. Anyways, today I have some real talk for you guys. And I have been sitting on this episode for probably the last six to eight weeks. I just want to share with you guys, I often feel really conflicted around this type of content because, and I’m going to be completely transparent with you guys here, because there are so many other businesses that are, I guess it would be considered my competitors or people in my space selling to our audience that really still promote the dream as if it’s super easy. And the reality is that helps them sell their product, right? They promote doing this marketing strategy or copying their process or implementing X, Y, Z is going to get you results in a short amount of time.

And that of course attracts people to their business, has them buy the product, but then later on, we’ll leave them disappointed that they didn’t get those results that quickly, but it helps their marketing. So I often feel conflicted in being this very “realist” with you guys and giving you guys the truth, because I see behind the scenes so much. I am right when I say what I’m about to say, and the problem is you guys don’t always want to hear it. So I feel conflicted sometimes because I don’t want it to impact my business where it’s like, “oh, well, I don’t know. It’s probably just a story.” I tell myself, “oh, well Emily’s telling me this truth, that things are harder. And so we’re going to go by the dream over here.” And so I oftentimes do feel conflicted because I don’t want you guys to feel like I can’t be successful and it’s too hard now, but I also don’t want you guys to ever set yourself up for something where you’re like expecting that you’re going to have this level of success and then completely beating yourself up when you don’t, when in reality what you were expecting, wasn’t realistic.

That’s the problem that so many people face right now. So I’m doing it anyways. I’m going to give you guys this hard truth about online business today. And I think it will serve you, but hopefully the next time you see someone trying to sell you a dream that is not realistic, you stop and think twice because I’m very much a realist. And I think that hasn’t been something that’s led to my success, but also supported a lot of our clients and students. I want that for you guys. I have seen a lot of behind the scenes in the last six to 12 months. And without saying too much, I will tell you so many business owners are struggling right now. I think we are in a tougher spot in our economy. I think it’s hard to find employees, good employees right now.

And that impacts business costs. I think that ads and growing your business has gotten harder, which is impacting people’s marketing and lead gen and sales. And I know firsthand of at least a dozen business owners, friends, people that I know through my connections who are very successful and have had launches and promotions about half of what they had the year before. So their revenue is significantly going down and you guys don’t see this on the front end. It kills me because you still think like, “oh, all these people are this successful and I should be. What’s wrong with me?” And I’m not saying that you can’t be successful right now. You absolutely can. I also know people who are completely crushing it, but they’re doing certain things that others are not. I’m also seeing a lot of brand new business owners struggling to get any momentum to be successful.

This is kind of the reality where we’re at in the past, six to 10 years ago when having an online digital business was not so popular and the space was not so saturated. And this is true for most industries because most industries, I mean, having a digital business where you have a course or you have a service, a coaching service, or you’re selling a membership site or any of those things is the dream for so many people. And they’ve been exposed to the fact that this could happen and therefore the saturation has gone up, which has made it harder. And so in the past six to 10 years ago, I think that it was very much possible to have a business where you didn’t have any money that you had to put into it. You could start it up from zero.

You could do it as a hobby on the side. You could be a stay at home mom and build your business at night when your kids are sleeping and you could do five hours a week and you’d start to get momentum and then it would grow. Then you could justify the cost of childcare and all those things. And I think that growing your business in that way, where it was kind of like a hobby at first, and again, you had zero capital. That’s not normal. If you think about most, any big successful businesses outside of our industry, that’s not normal. The way you start a business is you have capital or you go get investors or you have to work your butt off and put in all this time for basically free for months and months at a time to start to get some momentum.

And I now feel like people don’t find success after like three or four weeks and they give up and they’re like, “oh, well this is too hard. I don’t want to do this.” Or, “you know, this must just not work for me.” And then also, if you think about the online brands that are selling a digital product or a digital service who are super successful, can you find an example of one that has built their success in the last year from nothing with no upfront investment and is now super successful? Because I can’t and the people who did do that, I think of the big influencers that we all follow. You have these successful businesses. They started their business like 10 years ago. You guys, and they’re still kind of teaching. Yes. Their strategies have probably evolved and their methods and everything have adopted.

And they’re great teachers, but here’s the reality they’re selling you guys, and all of us, the dream that is no longer a reality because they’re selling the dream that existed for them eight to 10 years ago when they went to start their business, not the dream that’s a reality today. And it makes me sick because I keep seeing people in that boat where they think if they just buy that course, or they just buy that coaching program, or they just buy access to that person, or they go to that event, they will then have this business success. And even if you implement exactly what they’re saying to do, you’re still going to struggle because we’re not in that time. We’re in a different time. So many people are struggling right now. I need you guys to know that because I need to normalize that growing an online digital business is not easy.

It does not equal easy. Okay? The biggest reason, let’s even forget about expensive ad costs, the biggest reason is that it’s more saturated. When I started my business five years ago, there were barely any good Facebook ad agencies. There’s so many of them right now. And I don’t know if they’re good. I think we’re the best still, but there still is way more than there used to be. Every space online is more saturated, which means it’s more competitive. It also means your audience doesn’t trust it as much because they’ve probably been burned by somebody who doesn’t have a good delivery. And this online space has shot itself in the foot because so many people have promoted scams and bad delivery and promoted dreams that then didn’t come true that now everybody’s audience is not going to trust them. So, here’s the other thing.

This is a bold claim, and I hope you guys proved me wrong with this, but I think it is now extremely hard, extremely hard, if not impossible, to start an online business without having any capital to start that business, unless you’re in the service industry and you’re able to get clients and you do the work for those clients. Then, you personally do the work for those clients. And then you put that money back into your business and you don’t have to pay yourself to pay your bills. And that wasn’t the case before, but that is normal. That is normal for business. Like I said, most businesses have capital, have investors, or bust their butts and don’t pay themselves for like the first year of growing their business. So seriously, we need to stop thinking, I’m going to start an online business and I’m going to get money.

And within two months or one month or even three months, sometimes I’m going to be fully profitable and making tons of money because not only is that selling a dream, that is not reality. Like it’s, it doesn’t exist. It doesn’t exist. And so my bold claim is that I think today to start a successful online business, unless you are willing to be a solopreneur and go out and hustle and find clients, and then do the work for those clients yourself without a team, and then put that money back in your business and not pay yourself for a while. Unless you fall in that category, you have to have capital. You have to have some sort of loan investment, or maybe you can fund it. You’ve got a job or something and you can fund it. And I’ve seen that work for people behind the scenes, but somebody who’s like, this is my full-time thing.

And it’s brand new, I’ve never sold anything, or I’ve maybe sold two and I need to pay my bills, my family’s bills next month with this money, you’re setting yourself up for failure. And that’s just completely not reality. So, SO many people, influencers, business owners today are still selling you this dream. That was true for them. It worked for them. 6, 8, 10 years ago, things have changed and we need to adjust and normalize what is actually true today. Now I was doing this math with my team and this was so interesting to me. So if you spend $3,000 on ads, let’s say next month, you’re like, I’m going to spend $3,000 on ads. And let’s say that they convert. They do really well. They get 2x return on ad spend, which is an average good result. Okay. So you spent 3k, you made 6k.

Well, now you have $3,000 a profit. You need to pay your team, probably, unless you’re an ad expert. You probably need to pay somebody who either helped you build the funnel, did the copywriting or ran your ads, or you hired an agency. You’ve got to pay your team. Most likely that’s going to be more than $3,000. So right there, you spent $3,000, which felt like a lot to you. You got a 2X return on your ad spend, which to be honest, doesn’t happen until 60 to 90 days after running ads. Then you’re still not profitable after all business expenses. So your options at that point are number one, spend more money on ads, because then now if you spend 6k, you’re going to make 12k if you can maintain that return on ad spend. So spend more money on ads or go out and start leveraging organic marketing so that you’re getting sales from other places, not just your ads. But then the other problem here is if someone were to tell you, “Hey, spend 3k, okay? And then once you get 2x return, I want you to spend 6k. I want you to double your ad spend.”

Well, if you’re spending 3k making 6k, your ads are converting well, they’re converting on an average, good return on ad, spending 2-3x is pretty standard, pretty good. Your ads are converting. Well, you’re spending 3k you’re making 6k which again, that alone doesn’t happen until 60 to 90 days on a good converting funnel. Because you’ve got to prove everything. So, you could also consider that you’ve already spent 9k and now you’re now making the 2x return. Okay? So then you spend that, you get back 3k, you pay your team. You don’t pay yourself. You pay your business expenses. You don’t have any more money, but in order to get out of that, you need to spend 6k on your ads next month.

So where’s that money going to come from? You’re not paying yourself. Do you see what I’m saying? You have to have some money to put back into your business to get over that hump. Then once you can get over that hump, things become so much easier because in the beginning, now let’s say you spent, for 90 days, you spent 3k a month. That’s 9k, and in the last month you finally got your funnel converting. It’s finally working. You tweak things, you improve things. That’s a good case scenario. Sometimes it takes longer, but we’re just going to go with 90 days. You finally got there and now you spent your 3k in one month and you made back 6k but take away the 3k, your net profit is 3k, but you had already spent 9k for the past three months.

And now you just made a 3k profit, so you’re negative 6k. But, if you go into the next month and you say, “I’m only going to keep spending 3k and I’ll make back another 6k and I’ll keep 3k. And then I got to pay my team and I still need to pay myself at some point.” You’re going to keep doing that month after month, and you’re not going to get out of it until you can say, “okay, I have some more capital. I’m going to spend 6 or 10k and then I’ll make 20k or 12k with a 2x return, and then you’ll get ahead. But the issue is that so many entrepreneurs, they don’t have any capital. They have zero money. They don’t go get a loan. They don’t even consider it. They’re like, “why would I have to do that? So-and-so didn’t do that to, to grow their business.”

So they stay in this place of, “I’m spending $3,000. I should be more profitable”. And it’s like, “no, out of 2x return on ad spend, your business is still going to be in the negative. And you’re not going to be paying yourself unless you have a different way to generate sales.” The other problem is organically. It’s now also extremely hard. If you were to go start a business tomorrow and grow your brand organically, good luck. How are you going to get the traffic? It’s really hard. Yes, you should be doing that. But you also have to really be running ads because otherwise, how are you going to get the traffic to your brand? If you start looking at these numbers, and I had this conversation with my team, and I was like, this is so powerful because what we had was this calculator for one of our new clients coming on our roster.

It basically showed the first month she was going to spend 3k and then with her numbers and our management fee, she was going to lose $1,500. And then she was going to put that $1,500 back into our ad spend. So then she was going to spend the next month, $4,500. Then she was at breakeven. And then the following month, she was going to spend 6k. And when she would make the jump from spending 3k to 6k with her existing funnel numbers, she went from negative $1,500 after a management fee and the ads, how much she profited. So basically she would’ve made, let’s say if she spent 3k, but it was negative $1,500. Our management fee is five. So for her. Whatever that equals, she spent 3k, she made back $4,500, I think. No, she made back $6,500 and then, yeah.

And she then paid us. So then it was negative $1,500 when she went all the way to spending 6k now, after our management fee was profitable, $15,000. That’s when the game starts, that’s when you start getting momentum and that’s when you can start moving, but she’s putting it back in her profit every month. So she’s not paying herself. She’s just paying for the expenses of the ads and she’s generating business organically, but that’s the way that she viewed it. I just feel like nobody’s talking about this. My kind of bold claim is, is like, when you just look at the numbers and you take away all the emotions, all the dreams, all the, what you want, and you just look at the numbers, you have to either have capital to start your company or the ability to not really pay yourself for months and months and months while you build it up.

And even then it’s like, if you looked at those numbers that I did, how would you get your ad spend to 6k when you’re in the hole already? You’ve got to have some capital. That’s the reality nobody’s saying this, but I do for my software right now, not just for the development costs, but for the marketing, it’s completely different than when I built my business as a virtual assistant. I could just go in and do all this work myself. My time was what made me money and I had no expenses andv90% margins. That’s only if you are actually going and doing a service, any digital product, anything that you want to grow beyond just you literally hustling and serving your clients. You’ve got to have capital to grow it, or you have to get lucky organically.

Now I’ll leave you with this. Some positive, the keys to success, because success still is absolutely absolutely possible is the process I’ve always taught. And I don’t say that to be like, “told you guys”. So I say that, to me, that’s still how you create success. You master your messaging, you master your audience, you master your marketing foundation and your strategy, you have incredible content, you give incredible value to your audience to attract your audience, you start growing your brand awareness, your visibility, you start growing your leads. You start converting those leads into sales, you pay attention to the numbers, you either scale or you optimize. That’s the five steps right there to the process. And I say it like, “oh, it’s that simple.” Obviously at each step there’s failures, there’s mistakes. There’s learning. There’s different things, but that is the formula.

And it doesn’t matter if it’s now or in 10 years, I believe that always will be the formula. So if you want to create a successful brand and a successful business, you’ve got to be committed to that formula. You’ve got to be real with your numbers. And there are days when I am just sick of the online space, because sadly, these big influencers and entrepreneurs who, again, they started 10 years ago, a lot of them have conditioned. So many of you have completely inaccurate and unrealistic expectations of businesses and people like me, you know, I’ve grown, I’ve got a team of 25 employees. I have had ups. I have had downs in my business. I’ve been up to $4 million run rate. And then back down to a $3 million run rate. We’ve had hard times, good times growth going backwards.

Like I get the reality. I’m growing a new business right now, and I’ve got to fund it. I’ve got to invest tens of thousands of dollars to get it started. And there’s absolutely no way I would be able to do it without that. Let’s even take out the development cost, the marketing cost. And that is how you start a business. That’s true in every other industry, and some people have been able to have online businesses without treating it like a real business, but that’s gone away. That’s not really reality. Maybe one in a million could do that today, but that’s not really reality. So the sooner you accept that and stop beating yourself up for not achieving what you saw somebody else achieve or, or portrayed to you that they achieve. Because that’s the other thing you guys, you don’t see the behind the scenes I have.

And again, people you think are having multi multimillion dollar launches this year are doing less than they did the year before. And I have great friends, a lot of good connections. I obviously would never name names, but I’m saying that to serve you guys in that, knowing if you’re going through a harder time or you’re not getting the successes as fast as you want it to, do not give up, do not give up because you can create that success. You’ve got to follow the process. You’ve got to follow the numbers. You have to be willing to invest in the long game, but you can create it. All right, you guys, I hope you found this helpful. I want to make sure I leave you with the fact that you absolutely can be successful. We’re helping clients who have all the time. I have a really fun idea coming in January.

I’m just going to hint it here. Hopefully my team doesn’t get mad at me. I am going to be choosing one business that we kind of take on as if we are like an investor in them. We put them through our process and they have never sold a product before. And I prove to you guys that you can be successful if you follow this process. I’m going to get them to their first 5k in sales, following our process that we teach in our program that we deliver for our partners, our clients, and get them to their first 5k. Because I believe anybody with a good offer, anybody with something of value to sell can be successful in their marketing. But you’ve got to be real. You’ve got to play the long game. You’ve got to follow the process and you’ve got to pay attention to the numbers.

So I’m going to do that to prove to you guys that anybody can do it coming early next year. I’m super excited for that, but I just don’t feel like enough people are talking about this. So I hope this was helpful. Send me a message on Instagram if it helped you. I appreciate you guys listening and hearing me out. I hope that the real talk is helpful and not discouraging. I think you can choose to do what you want with it, but take it and empower yourself to not give up, to know that you’re not alone with whatever you’re going through and that you can create that success. It is absolutely up to you, your commitment to your business and to that success. I’ll talk to you guys next time.

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