Mia Fileman 0:05
Welcome back to Part Two of this chat with Fi Johnson – business strategist and founder of Peach Business Management.
Let’s dive in!
One of the things that works for me in terms of making an investment in my brand or hiring a team member is when I hit a particular target. It’s when I go, “Once I reach this stage – it could be an objective or a revenue target or a certain capacity – then I will bring someone on.”
I want to talk with you about the power of setting targets and objectives because this is something that everyone knows they should do in theory. They all know they should be setting targets and objectives, but very few people do them, Fi.
Fiona Johnson 0:53
Yes.
One thing that happens when you set a target is you’re setting yourself up to potentially fail, and that can be scary. Setting a target is a real exercise in optimism and backing yourself. You can’t go into business unless you are optimistic. The nature of being a business owner requires you to be optimistic about the future.
When you set a target for yourself, there are a couple of things that need to happen.
First of all, you need to believe that it is possible. That can be a real stumbling block for a lot of business owners, especially if it’s a really big milestone. It might be a million dollars of revenue. It might be having a team of ten people. It might be having a customer base of 10,000 or whatever it is. First, you need to believe that it’s possible. That’s a really big part of setting a target.
The next thing that needs to happen is for you to understand how you’re going to hit that target. If your target is a million dollars of revenue, how do you get there? Is that working with 10,000 customers per year? Is it working with 100 customers per year? Et cetera. First of all, it’s understanding how you are going to hit that target. “Do I genuinely believe that it’s possible?”
Once we’ve worked through those two potential areas for blockage, the next thing to realise is that having targets and objectives, especially when they’re monitored – when we actually check in on them on a regular basis – actually helps to give us a sense of making progress which is how we stay motivated.
At a very high level of motivational science, they have uncovered that, in order to build and stay motivated, we need to see that we are making progress. If that’s something that resonates with you, then really thinking about “how do I show myself that I’m making progress?” because that’s going to keep you going. Once you’ve decided that setting targets and objectives is for you, it gives you that sense of purpose. Where am I actually heading towards?
Another thing that I’ve seen in my work is that people who have anxiety – which, in my opinion, most business owners have some level of anxiety, and it often gets stronger once you become a business owner and you just have to get comfortable with it – particularly if you have anxiety around the future of your business, having a number to focus on is really powerful.
If your targets are meaningful – and when I say meaningful, I find that having a target of a million dollars often doesn’t really mean anything, but having a target of 10,000 clients per year or whatever yours is – being able to actually picture those clients or picture those orders being sent from your warehouse or whatever your metric is makes it much easier for you to grab onto that number and think about it when things are feeling a bit stressful.
If you know you need to work with 100 clients this year, how far along that journey are you, and how can you focus on working with however many more you need to bring in for that year?
Mia Fileman 4:31
Yes, that’s really, really good. That’s a really interesting thing. I’m very curious about this from a psychology perspective, but often, when I set a target, it’s incredible how close I come to the target. They are so powerful!
Exactly like you said, especially when you check in and monitor it and not just hope and pray for the best but actually check in and go, “I said I want to have 20 Campaign Classroom students. I’m sitting at 12. I better go shake some trees. I need to do something now because I am going to miss this target.” It spurs you into action as opposed to being like, “Whatever happens, happens!”
Fiona Johnson 5:16
Yes.
Mia Fileman 5:17
I guess what I hear the most is – and I’m sure you hear this to the power of a hundred, Fi – “Well, I don’t know what’s reasonable. I don’t know what target to set. I don’t know what number to pull.” I would love to hear your thoughts about how you go about setting marketing objectives or revenue targets.
Fiona Johnson 5:37
The first step would be to come and work with me, obviously. No, I’m joking, but you can if you want to.
That’s a really cool question. I think working with the right coach or mentor is a big part of helping you to set targets. If you know yourself, you’ll know whether you’re more likely to overestimate your ability or underestimate it.
It’s really thinking about “what is my natural tendency here?” and “am I tending towards setting a target that I know I’ll achieve and therefore I get a gold star or am I actually trying to stretch myself towards something that feels a bit hard?”
As you might have caught onto before, I’m really keen on the idea of the how. I don’t really care whether your target is a million dollars or $100,000. What I want to know is how you are going to achieve that. I’m obsessed with the idea of how.
If your target is $100,000, is that going to be $100 an hour times 1,000 hours per year? Is that how you get to $100,000? If your target is a million dollars, does that look like – and I’m sure these numbers will be wrong – 200 packages that cost $5,000 across the year?
I’m really obsessed with understanding how we actually look at those two levers. What is the price and what is the volume in terms of working out our target? Most people set revenue targets because that’s the easiest thing for us to visualise in our mind. I don’t think that there’s a specific “everybody should try to increase their revenue by X percentage,” but I do think that growing a lot year after year is really dangerous – depending on your business, of course.
Most businesses are not scalable. They are growable. I don’t think that’s the word, but you can grow a business, but scaling is a whole other thing. If your business is a business that is able to grow, and if you doubled your business revenue three or four years in a row, you will be absolutely burned out, you will probably have had cashflow problems in the meantime, and you probably will have lost sight of what it was that you were trying to do.
I really try to encourage clients to consider “could we have some really consistent stable growth over five years?” rather than having these massive growth spikes where the wheels are falling off the whole time, and the wheels might be your team’s well-being, it might be your well-being, or your health might be suffering, et cetera. A growing business is not always a profitable business. That is something that I say a lot.
When we get really busy – which is what happens when we double our revenue – we start making decisions that aren’t actually in our long-term financial interest. Whilst I don’t have a target that people should be looking to do each year, I think we should all be trying to grow our income to some degree each year and doing that through having regular price increases and honing that in and getting really, really clear about who our target market is.
That’s why we love marketing and marketers – because they help us to identify the target and help us find more of them.
Mia Fileman 9:28
Yes, I appreciate you saying all of that because I feel exactly the same.
The number one reason for start-up failure is premature scaling. Please, please, please take all of this advice about how you can scale your business in your sleep with a lot of caution because we’ve all experienced a brand that was great, that we loved working with, had great customer service, were really responsive, then they grew too quickly, and it all went down the toilet. That’s exactly what you’ve just outlined.
All jokes aside, I really do think it’s important to tap into the expertise of strategists – like you, like me – if you’re not sure about setting targets and setting objectives. You and I have been around for a while now. I can tell you what a realistic marketing objective is.
If you came to me and said, “I want to grow my Instagram followers by 10,000 in six weeks,” I’d say, “Ain’t going to happen. Sorry, sweetheart!” because I’ve been doing this for 21 years. You’ve got decades of experience as well, so you can help businesses absolutely think about what’s realistic and what’s achievable and go back to that.
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Let’s get to talking about marketing budgets because, as I mentioned in the intro, I don’t think I’ve ever had a student who actually has a marketing budget. What they seem to do is spend as they go.
They get to a stage where they realise that they need to upgrade their website, so that’s $4,000 there. Then, they need this app – Calendly or Acuity or Kajabi – and sign on for a $200 subscription. They get Zoom and then they print business cards. They actually don’t start the year with a defined marketing budget. This absolutely – and I’m sure it’s the same for you – blows my mind because it’s like upside-down topsy-turvy for me.
Obviously, I have a corporate background, but professional marketers start the year with a budget. They go to their bosses, and they fight for the budget. They go, “I need an extra this, and I need an extra that. If you give me this, I can promise you that.” They start with a budget. They know exactly how much they’re going to spend for the next 12 months. Then, they think about how they’re going to allocate it, so that money can work hard for them.
Because the problem with spending as you go is that you obviously run out of money! Then, a really worthwhile opportunity comes along, and you can’t afford it. How do you go about setting a marketing budget? How much do you spend?
Fiona Johnson 13:08
That’s actually a good question. It’s so good.
I think the first thing to think about is, “What is my business model? How does my business fit together? What are my main channels for new clients?”
Going back to what we were saying before, if you’re having a year that’s about consolidation rather than growth – where you’re getting all of your process and policies and systems in place – you probably don’t need to be extending your marketing budgeting that year.
When you’re having – or when you’re planning to have – a year of growth, you have really clear targets. Let’s say you have a business that’s bringing in $400,000 a year and you want to get to $500,000 and you’re really clear about what you’re going to find that extra $100,000, I would be comfortable with you spending up to 20 percent of that $100,000 that you believe you are able to bring into your business. But there’s a caveat on that.
If you are spending marketing dollars – whether that’s from all of the different kinds of marketing activities that there are – I would want for you to be thinking about the quality of the customer or the transaction that you’re trying to bring in.
If you are looking to bring in a long-term client, I am happy with 20 percent of their income go into marketing. If you are trying to bring in a single transaction and it’s unlikely that you are going to get anything more from that customer, I probably don’t want you spending more than 5 or 10 percent on that particular lead or that customer.
It’s really thinking about the quality of the customer or the transaction and what is their longevity in the context of your business. If you are bringing in somebody who is going to have longevity, I’m happy for you to spend more money to bring that person or business into your ecosystem.
Also, when we talk about spending marketing budget, we’re generally talking about advertising. Most people think that spending money on marketing is advertising, but that’s just one component. What I’m talking about with the 5, 10, or 20 percent is advertising. If you’re spending money to bring in that particular customer, generally, we’re talking about advertising.
In the same context – and I know that you and I agree on this topic – what are the long-term marketing spends or where are the marketing spends in your business that have longevity? Are you spending money on SEO which is something that will actually set your business up for years to come if it’s done right? Are you setting yourself up with great content marketing or content thought leadership or thought pieces? Are you actually building relationships with your customers that encourage them to recommend and refer you to other clients?
Are you spending money on other really great assets such as photography, website, and brand? Because I see all of those things as being investments in your business whereas I see paying for advertising – or, even to a certain degree, paying for someone to manage your social media accounts – as pretty short-term marketing spend because it’s really more focused on the day-to-day of bringing that one sole transaction in.
One thing that I want to say before I stop ranting is that so many businesses rely on word of mouth to bring clients in but are doing nothing to foster and encourage that within their business.
If you are saying to yourself, “Well, I don’t need to do marketing because all of my clients come to me via word of mouth,” that’s excellent, but you also need to think about “How do I actually ensure that that continues? How do I actually thank and incentivise my clients for bringing their friends and family into my business?”
It doesn’t need to be you giving them money or starting some kind of affiliate marketing program. If that’s what you want to do, then all power to you. But I find that a lot of business owners forget the general courtesy of thanking someone for their recommendation. That’s my two cents.
Mia Fileman 18:01
So good. That was not a rant at all. So many good points I want to highlight from there.
One, if you’ve got ambitious objectives in terms of growing your revenue, then you’re going to have to spend a bit more money. I think that that’s the first fallacy that we need to knock on the head. “To make money, you’re going to have to spend some money.”
You know exactly that I like to invest in long-term brand building – the best website that you can afford; beautiful, high-performing sales and landing pages – because that’s where people actually convert.
But I will also say that there are a lot of female entrepreneurs – and you said that they are risk-averse – that have zero advertising budget. I don’t know if zero is the right number. It doesn’t have to be $20,000, but if you look at your budget and it is all subscriptions, apps, consultants, contractors, and none of it is paid media, then how are you going to attract new people to your brand? I think it’s important that the budget is not zero in terms of that.
Don’t even get me started on the brands that I speak to who are like, “I don’t need marketing because my business relies on word of mouth.” I’m like, “That’s great – so great!” The only problem with that is that that is pretty risky if one day those word-of-mouth referrals dry up.
Also, the role of marketing is not to make more sales always. That’s not what marketers do – just help you make more sales. Good marketing will also help you raise your prices so that you can work with better clients. You can say no to the pain-in-the-ass clients whereas, if you’re relying on word of mouth, you can’t be all that selective. You have to take what you can get whereas great marketing gives you choices. It allows you to take back control of your business which I think is so important.
Fiona Johnson 20:10
Preach! I totally agree!
Mia Fileman 20:12
Final question because, of course, we have completely blown out the time which is absolutely fine. It’s my podcast. I can do whatever the hell I like.
Let’s share our thoughts on where to invest your precious funds. We have covered a few items.
SEO is really very worthwhile because having a beautiful website is great, but if no one visits it, then ugh. This is great long-term brand building investment.
I spoke about high-performing sales and landing pages because that’s actually where most businesses make transactions these days. Even if you’re a service-based business, people might actually purchase your services via your website now. The traditional invoicing system has – thankfully – gone someplace to die. What we’re seeing is a huge rise in productised services – like mine and yours. To book into Financially Fit, you go to the Peach Business Management website, and you purchase through the website. That point of purchase – that sales page – is really fricking important.
What else?
Fiona Johnson 21:31
Look, I think we have such similar thoughts about this.
I think investing in an amazing copywriter is such an amazing investment for you as a business owner. I think any person that can help you gather your thoughts together around marketing or your business or how you are positioning yourself is worth every penny that they ask for.
We’re talking about what to invest in and how to put the budget together, but a lot of business owners actually aren’t that clear about who they want to work with, how many clients they want to work with per year, or how many transactions they want to sell per year. Anyone that can help you to clarify who you serve, what you do for them, help you to articulate your purpose.
Going back to the idea of sales pages on websites, I don’t understand why people don’t put their prices on their website. When you’re an e-commerce business, you have no choice. You have to put your prices on your website.
As service businesses, there’s this idea that clients are going to want to somehow come through some mystical swamp of information about all of these great things we do and all the packages we have, but not actually telling them what the prices are.
I’m a massive advocate for prices on websites for a variety of reasons.
Building on your ideas of SEO, great website, great brand, and also extrapolating from there and saying, “How do I communicate this to the word?” – whether that’s via photography, graphic design, video, illustration, and words – I think those investments are long-term and worth every cent.
Mia Fileman 23:21
Totally.
All right. I’m going to tell you what you shouldn’t spend your money on.
Please do not spend your money on paid advertising until you have some organic traction with your brand. If you are not making sales organically, then you are going to be throwing good money after bad on Facebook Ads, Instagram Ads, and Spotify Ads.
It’s three years into this business that I am now investing in ads because I figured it out. I’ve put those missing pieces, those disjointed pieces back together, and it’s gelling. Now I know I’m onto something and I can amplify those organic results with paid. Every single successful entrepreneur I’ve even spoken to, when you hear their number one regret, it’s that they spend so much money on paid advertising and they hadn’t quite – to your point, Fi – gotten clear on the offer and the value proposition was slightly out. Don’t do that.
Don’t spend money on business cards, wrapping your car, signage for your business, or anything. It’s going to make you feel good about yourself and it’s going to hopefully make you step into your role as CEO and it’s going to help you grow confidence, but can you do that really cheaply so that we can take that money and invest it in places that are going to actually generate some revenue? Those are absolute nice-to-haves. It’s the same deal with branded gifts and all that sort of stuff. Those are novelty items.
When it comes to contractors and consultants, you have to choose. As a bootstrap start-up founder, I don’t think you can afford a copywriter, a graphic design, a social media manager, a website designer, and a paid ads specialist. You can’t afford all of those things, so you have to decide which one you’re going to outsource and which one you’re going to upskill in.
I am no graphic designer. I am so bad, so I outsource graphic design – and I still do to this day. I love the visual identity for Campaign Del Mar. We work with a graphic designer on a monthly basis. As a result, I have to write all the copy – all of it. Every single word! Knowing that the graphic design is being taken care of, then I can focus on honing my own writing skills.
You can’t outsource it all, so pick.
Fiona Johnson 25:58
Yes, I love that.
I think communication is the most important and valuable thing in a business. If you are someone who knows how to communicate, you are going to be successful in business – no matter what the website looks like or how crappy your shitty business cards are or whatever.
Going back to signage, I heard someone from quite a well-known restaurant talking about, when they first opened it, they didn’t have money for a sign, so they had some random graffiti thing on a bit of cardboard or something that was an actual joke, and people loved that sign so much, they ended up keeping it. It became an iconic part of their brand. Don’t think that even if you have a bricks-and-mortar venue that signage has to be really expensive from day one.
Mia Fileman 26:49
Totally.
Well, that was an absolute pleasure, Fi.
How can people get in touch with you if they’re looking for a business strategist who is going to help them demystify money management?
Fiona Johnson 27:04
Come to my website – peach.business – where you’ll see all of my prices. You can also find me at the same place on Instagram – peach.business. I have a group program called Get Financially Fit which you can join. September this year is the next round. I also have some really amazing one-on-one programs that I run for small and medium business owners.
Mia Fileman 27:31
Amazing!
All right. I’m going to put those links in the show notes.
Thank you so much, matey! It was such a pleasure chatting with you today!
Fiona Johnson 27:38
The pleasure was all mine. Thanks, Mia!
Mia Fileman 27:41
Thank you!
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