Hello beautiful people! I actually made it on time for this month’s income report. Imagine that. 😉 This month comes with a LOT of insights and lessons learned — things that you can apply directly to your own life and business — and it’s one of my favorite income reports to date.
I hope it helps you! Thanks for comin’ along for the journey.
Why do I do income reports?
I started doing income reports as a way to be more transparent about my business and hopefully shed some light on ways that you can grow your own online business, too. I want to show you both what worked for me and what didn’t so that you can apply those lessons to your own dreams. My overall hope is that my income reports inspire or inform you to create and grow your own online biz.
Let’s do this!
- E-Course Sales: $93,245
- Affiliate Income: $8,887
- Ad Revenue: $0! (more on that below)
Total Income: $102,132
- PayPal + Stripe Fees: $2,988
- Charitable contribution: $100
- Gusto Payroll Software: $28
- Facebook Ads: $3,636
- Giveaway prizes: $213
- Independent Contractors: $9,651
- Bookkeepers (2 months): $1,058
- Legal Contract: $400
- LeadPages Template*: $15
- MotionMail: $10
- Deadline Funnel: $37
- Bluehost*: $387
- Zapier: $20
- Infusionsoft*: $578
- Affiliates: $3,417
- Business Travel: $387
- Office rent, utilities, + insurance: $1,156
- Google Apps*: $17
Total Expenses: $24,098
(Anything with an * next to it is an affiliate link)
Net Profit: $78,034
Payroll to Melyssa: $8,611
So what worked? And how was July? Let’s chat.
I went to Thailand and Japan!
One of the greatest thing about July was that I took time OFF from work! I left on July 22nd for a nearly three-week vacation to visit Thailand and Japan. It was the most time I’d ever taken away from my business, and because I had a killer team in place before my departure, I hardly worked at all during those few weeks, and the business still ran as usual and did well in terms of income while I was gone.
I feel like it was one of my proudest moments as a business owner…having the systems and team run everything without me needing to be there was a great feeling.
It was also really neat because I’ve been to Thailand a couple times before and I used to live in Japan — it’s where I started my business, actually! So, it was a very cool experience to go back and have those startup memories come flooding in. I also visited my old Tokyo apartment complex where I started my business in a 300-foot studio. 🙂
I ran an 84-hour “launch”
Right before I left for my trip, I ran a very short promotion for my course, List Surge. In total, it lasted about 3.5 days, but during that time I added some extra bonuses to List Surge and also planned to increase the course’s price after the promotion ended.
During those 3 days, we ended up earning almost $50,000 in revenue from a $197 product, which was insanity to me since it was a short amount of time (and pretty last minute promotion…I left for Thailand the day after it ended!).
Having that experience made me think about whether it’s necessary to have a long, 10-14 day launch, which is pretty standard. Or even a 30-45 day launch if you consider all the pre-launch tasks most people tend to do.
We literally had no pre-launch (aside from a couple emails), but we did have a handful of emails during the promotion, as well as two webinars.
Anyways, this experience definitely got me thinking about the length of my future launches and how I structure promotions. Food for thought!
Going to New York for a Mastermind / Coaching Meetup
I went to NYC (for the third time this year, whoa!) in July for a business mastermind/coaching meetup with Todd Herman, called 90 Day Basecamp. I took a course led by Todd last year, which was called The 90 Day Year. I LOVED Todd’s coaching style and psychological insights into people and business, so I decided to sign up for his more intimate coaching workshop so that I could learn from him and also meet other ambitious entrepreneurs.
This workshop was the first of four that we’ll be doing (one per quarter) and it definitely got my brain thinking in new ways. The next one is in October!
Also, after visiting New York so many times this year (and loving it each time), I’ve been really considering moving there next year. I enjoy Los Angeles, but I’m a constant nomad (probably because I moved so much as a kid), and I’m looking for a little change of pace. I’ll keep you posted! 😉
No ad revenue
Oh lawd. For over a year, I’ve been telling you all that you should ditch advertisements as a revenue stream, yet I had ad revenue myself! What was the deal?
Well, I had a contract with an ad provider that I didn’t realize was automatically recurring each year. I asked to leave the program after realizing my first year had ended, but because I was 5 days late (!) , the contract automatically renewed for another year and I wasn’t allowed to leave. Oof. So, I had to keep one little ad on my site for the rest of the year. (Read the fine print, my friends!) 😉
Let’s do a little math: Last month my ad revenue was $62 and my total revenue was about $140,000. Just let that sink in for a sec. ????
I’m really happy to be free from ads now, but I do still see a lot of people using them on their own site. If seeing that I made $62 in ads revenue after a $140k month didn’t sway your thinking, here are a few reasons why I think you should ditch ads on your site:
1. Things are changing.
When I started blogging even just 4 years ago, ads had potential to be fairly lucrative. I sold plenty of sidebar ads and had friends who earned a full-time income from advertisements. And if you were blogging TEN years ago? Ads were a game-changer.
But nowadays, things are changing. Ads in general are taking a different shape. Instead of seeing sidebar ads and flashing banners, people would prefer to see organic content woven into your posts or Instagram photos. This also means that advertisers aren’t willing to pay as much for ads, and even sites with huge amounts of pageviews have seen a sharp decline in their ads income.
Think about Facebook and Instagram ads (which are still very lucrative for businesses) — they don’t detract from the content in your feed. They’re designed to look exactly like posts from people you know because they follow the same format as regular newsfeed posts. This makes them feel more organic and not as disruptive.
But ads on your website tend to take away from your content and distract visitors. They don’t feel natural or organic, and are often for products that are totally unrelated to the visitor’s interests.
Personally, I’ve tried EVERY type of strategy to earn money as a blogger and online business owner. Here’s a little timeline for you of where most of my income came from over the years…
- 2013: Ads + started graphic design business
- 2014: Graphic design business + sponsored posts + launched an Etsy shop selling physical products
- 2015: Graphic design business + blog coaching + launched an e-course
- 2016: E-courses (and some affiliate income)
I started with ads, too, but quickly noticed that there were other ways to earn a living that were much more profitable and more in line with my true passions and interests.
2. Ads detract from your TRUE purpose.
I was on a blog yesterday and the first thing I noticed was that there was a flashing ad in the sidebar, as well as a long horizontal ad covering the bottom of her website, which stayed there as I scrolled down the page.
Between those two ads, I could hardly focus on her content (which was SO stellar!). It made me feel upset — not at her — but at the fact that this myth of ads has continued, even though ads aren’t what they used to be.
It made me feel like her true gifts weren’t being seen because there are probably people who would just leave her site without giving her wonderful content a chance.
Now, don’t get me wrong…I understand that it can be hard to say no to money, especially when you need it.
I felt that way when I decided to stop doing sponsored posts. Even though they weren’t bringing in THAT much money for me each month, it was still scary to shut off one of my income streams, especially because I was still starting out at that point and felt like I *needed* that money to get by.
But the truth was…I didn’t. And closing down income streams that cost me more time than they were worth (and didn’t align with my true purpose), ended up making me WAY more money than I could have expected, because I freed up space in my brain to dream up new ideas.
So, if you currently earn money from ads (whether it’s $1.67 or $5,000 per month), know that the decision is yours, but based on my experience, I think there are other ways you can earn money that will be more profitable and will keep your site’s visitors focused on what you do best — create amazing content. 🙂
Why does Melyssa only take $8k for her Payroll?
If you look above, there’s a section that says “Payroll to Melyssa: $8,611.” I’ve been getting a lot of questions from people about this, like “why do you take out so little compared to your profit?” and “what do you do with the rest of the money you earn?”
I wanted to answer that for you here both to answer your questions, but also because I think this can be helpful, money-saving knowledge for you!
So, when I found my accountant about a year ago, my business was legally filed as an LLC. My accountant asked me if I had been paying payroll to myself and I looked at him like he was speaking gibberish. “Why would I pay myself payroll when I’m the only person who works in my business? Can’t I just take money out whenever I want?”
And it’s true, actually. You CAN just transfer your profits to your personal bank account as a single-member LLC. But doing so means that you’re going to pay more in taxes.
Why? Because if you file as an S-Corp (a different legal entity, similar to an LLC), your personal taxes are filed separately from your business’s taxes, and your personal earnings can be (mostly) deducted as a tax write-off.
I know, this probably sounds confusing (or at least, it was super confusing for me at first!). Let me try to spell this out.
As a single-member LLC (i.e. an LLC with one person running it — you), you can just file taxes once (the same thing goes if you’re a sole proprietor — someone without an LLC, but who has a business).
Your taxes and income, in that case, are just all lumped together, because the government assumes that since you’re the sole owner, all of the profits are passed to your anyways. Makes sense, right? And a lot of people file taxes this way, which is totally legal, but may actually increase your tax bill.
What my accountant suggested is that I keep my business as an LLC, but file taxes as an S-Corp (apparently this is totally normal — you just file a form to tell the IRS you’re an LLC that wants to file as an S-Corp).
But as an S-Corp, you HAVE to be paying payroll to yourself. Essentially, you have to become an “employee” of your business. You’re still the owner, but you just receive a monthly payroll payment.
My payroll is set up and runs automatically with a software called Gusto. My accountant chose my payroll amount based on my income — he’s essentially picking an annual income that would make sense as a CEO of a company my size. As my income has grown, he bumps up my monthly payroll amount.
But here’s the great part: When filing as an S-Corp, he will file my personal taxes and my business taxes separately (I believe). That way, my taxable income for my business decreases, and since my personal income is now in a lower tax bracket, the taxes there will decrease, too.
Also, my personal income (from the payroll salary) is mostly deductible from my business income. So, it ends up being a kind of tax deduction, which also decreases my taxes.
Of course, this is totally legal! At first, I felt like I was cheating the system — ha. But he assured me that this is common practice, AND that if you’re making more than $50k per year, you should probably get your accountant to do this, too.
So, that is the long spiel of why I pay myself a payroll! It saves money on taxes.
Oh, and what happens to the rest of my profits? I can keep those, too. Even if you file as an S-Corp, you’re still allowed to transfer any extra profits (on top of your monthly payroll) to your personal bank accounts. Win-win!
PSA: Hopefully this goes without saying, but I’m not a CPA. 😉 I explained this to the best of my knowledge, but it’s always best to ask your accountant for tax advice.
Here’s how you can take action:
I have a mini to do list for you, based on what *I* learned recently. Pick and choose what sounds like it might serve you!
- Test out a shorter launch or promotion. If it works, then that’s fabulous and may inform your future launches. If it doesn’t work, then you will almost certainly still learn something in the process.
- Seek out a group of people (either locally or over the ‘net) that you can chat and mastermind with. Having those people in your crew will be a HUGE motivator for you. And as the saying goes, two heads are better than one!
- Decide if having ads on your site truly serves your mission and audience, or if you’re better off ditching them. Can you earn money in a different way? Would removing ads allow you to focus on and blossom with other income streams?
- If you earn more than $40-50k per year from your business, talk to your accountant about filing as an S-Corp. It may save you money! 🙂
Got any questions? Comments? Insights? I’m all ears! Let’s chat down below.
p.s. I also have a private Facebook group where I’d love to chat with you and answer your Qs! Click here to join.