Transcript
So welcome to how to the workshop on how to develop a financial model for your digital marketing strategy.
It’s been a passion for some time for me to understand the economics and mechanics behind digital marketing, especially now as with Google a few years ago, you could get away with doing everything organically i.e. putting it up and hopefully people seeing it. But now it’s very much a numbers-driven game for Facebook, Google advertising, and with TikTok now very much on the scene. Your budget has been spread in many ways. And it’s a question of making sure that, for me anyway, every penny you spend results in some kind of action.
So just for those people who don’t know me, I’m a business and marketing coach. I’m also the founder and managing director of KUB, which is a coaching and digital marketing agency. We’re very much a believer in that we want to work with you to develop your strategy.
It’s based on real practical knowledge of what works and what doesn’t work. There’s no theory in what we do. We’ve got the numbers and the experience. We’re a quarter million-pound agency and growing. We’ve now got international customers.
Charleh Dickinson joined us seven to eight years ago now. She’s running the agency with Rachel, who’s on the call today. We’ve got full-time employees in Manchester. And we also have remote teams as well.
I personally have worked with over 500 companies across a broad range of sectors over the last 20 years. And now have 30,000 connections on LinkedIn. I do it’s not quite 3000 Because, you know, that’s the limit. So if anybody does want to connect with me who’s on the call today, I’ve got a few 100 connections left. And I’ve worked with in technology since 1984.
So why are we doing this? It does take quite a bit of work and coordination. While it’s to help you guys compete in the digital world, help you build on your knowledge, and solve marketing problems. And hopefully in a couple of months time, we’ll have some exciting news. We’ve talked previously about WhatsApp groups and using that whole CRM.
But now we’re going to build our own community, our own website, using technology that we’ve been bringing together. So that you’ll be able to ask questions, and talk to marketing experts. Not just on the ourselves, but I’ll be inviting other respected suppliers so that whatever your problem is, we can find an answer to it.
So what have we got in terms of how we can help you? So we’ve got the free Wednesday morning workshops, running through to the first week in December. And then from January through to Easter, and ongoing with guest speakers.
We’ve got the book drive sales through digital marketing. We’ve got online digital marketing courses at learn.kub. But again, these will be coming on to the Vision2Success website, so that you’ve got easier access to them.
We’ll be talking throughout this presentation about the app, which we’re now developing, it’s gonna be launched probably next month as a free version. And then we’ll have a paid version is launching in January. And then for anybody who needs help here and now, we have route to market strategy and implementation process, which we’ll go through.
So this is the book – if you go to Amazon, and type drive sales with digital marketing books, it should appear with two or three in the list. And it’s on all the other good book shops around the world. It’s on about 12 online stores around the world.
We have a WhatsApp group. So if you want to ask questions before we get the forums and social networking set up, then please email Rachel with your mobile number and she will add you to the list.
Okay, let’s get cracking. So, we’re going to talk about what’s the point of a budget, understanding the importance of conversion rates, I did a workshop yesterday at University of Manchester, talking to a group of Thai companies who are looking to work with UK companies. And they were quite shocked. And I’ll be giving you the background to the concept of conversion rates and how much effort you do need to actually get any conversion. Then we’ll be looking at ideas for how to calculate your return on investment.
So there are a few fundamentals we need to look at. And we’ll go through those in a bit more detail. So why have a budget? What is the point? It is not to keep the financial director or controller happy. It’s about controlling the spending, knowing what your limits are, and it provides a focus. If somebody gives you an unlimited budget – I don’t know if everybody remembers back to 2001, when we had the tech bubble boom and bust, where investors were giving youngsters silly money to set up companies and they were spending it on everything.
There’s something to be said for having tight budgets when you’re setting off because it gives you that focus. If somebody just gives you a lump of money, there’s always stuff to spend it on. But it’s spending your money on the right things. So it gives you some that financial certainty.
And this is why I developed the app because, as you’ve seen in previous marketing workshops that have been running, it’s getting more complex, there’s more moving parts. So you need to have a better handle on what all those moving parts do and how they contribute.
So this leads us to a financial model. I’ve developed one using a spreadsheet. But the problem with spreadsheets is that I can understand it, but it’s very difficult for other people to understand that. Hence we started developing the app. It has taken a long time. We’ve been at it for about 12 months now and, but I’ll be giving you some insights into where we’ve got to.
We were hoping to launch it today so you can guys can go and play with it. But on testing this morning, there was still one or two wrinkles that need ironing out. So we’re not quite there yet. Hopefully, we’ll have some use in two weeks time when I do the workshop on your story brand.
What it does do, is it allows you to do scenario planning, allows you to try different things on paper, or on spreadsheets or on the app. And to say if I spent this I could get this, or if I spent that I can get that. Because what I’ve done is I’ve connected spend to outcomes. So you can look at it using average conversion rates. But the thing about the model is that you can start off using what I’ve put in, and then you can adapt it to yourself as you get your own results.
Because if I was take away one thing from workshop yesterday with the Thai companies was they were shocked at how much work or how much advertising promotion you have to do in order to get conversion. And I’ve found some really useful theory as to why what we see in in practice is actually underpinned by theory.
So step by step guide. So the first thing is we’ve got to think about return on investment. You’ve probably heard the phrase if you’ve ever seen companies investing in new plant and machinery and so forth. But it’s, it’s equally important at the marketing level. And it’s huge in Ecommerce. If you can spend 20 pounds to get 100 pounds for initial sale, and if you make 50% margin, and take out your packaging cost overheads, you should still make a margin.
And again, with things like email marketing, cost of acquisition should be less than the subsequent sales. With higher value items or ones that are purchased on a regular basis, you can look at the whole life value of a product, if that kind of helps with the calculations.
So we have to think about the basic concept. So you’ve got the marketing activity costs multiplied by the conversion ratio. And you’ve got the average value of that conversion will give you the potential sales of that marketing activity.
Now, not every marketing activity will give you an output. And we’re going to be talking about the different types of assets that you would have that you need to consider.
So when we will look at the parameters for the model, we’re going to be looking at the initial costs. So for example, if you’ve got a website, that might cost you 4000 pounds. With the website, you might have monthly activity costs. Those are you might have a developer spending half a day, a week or a day a month or whatever, on your website. So that becomes a cost that you need to account for.
You then have system costs. So for example, web hosting, if you’re using advertising spend, you might be using Google, Facebook, Instagram, and TikTok and you might have LinkedIn ads. So those those are putting up an advert, driving traffic to something and then getting a conversion. And this is the one that is the easiest to work out what the conversion ratios are. It gets harder for websites.
So what underpins this? So I’m going to be giving you some numbers in a minute as to what we see as the sort of average conversion rates. We spent the last probably 20 years looking at website stats looking at traffic, looking at conversions and never understand.
I mean, if we go back, you know, 30 years or 40 years when we were doing Mailshots, you know, physical ones, where you put something in an envelope, and post that – I remember doing one for 4000 letters that we sent out, and we had somebody working on it, I think, for a whole week, and we had to pack things in a particular order to put into mail bags, and we have a whole room full of mail bags. And we’d only expect one to 3% return, hence why we have to do so many.
And then this is carried on through. If you look, if you look at an Ecommerce site, there are 1% of those visitors will convert to a sale. If you think about an email shop, you’ve got 20% open rate, maybe, which is the average, and then a one to 3% click through rate. And this happens time and again, and I was really sort of thinking, Well, where does this come from?
So I just started doing some research, I thought come across something new, but there’s obviously nothing new in this planet. And I came across the buyers pyramid. And then it all suddenly clicked, you know, after the 100% in your suspect list, there’s only 3% who are ready to buy. And it also explains why month after month after month, you can do the same campaigns, and you get the same stats at 3% – it is because only a very small proportion of your marketplace is actually in a position or wanting to actually buy now.
And then you’ve got the vast majority of the market, you know, so a lot of these people you don’t think they’re interested, you’ve got to see if you can get them interested. I mean, Facebook, adverts and Instagram adverts are all about that. I’ve found myself a couple of times getting the credit card out after watching Facebook ads, thinking that’s really useful. And the latest gadget bank, for example, and I’m thinking, Whoa, stop what are you doing, you don’t need the latest gadget bag. So you know, that’s how you convert people from maybe the think they’re interested or might be kicking an idea round. But then you’ve got third percent who know they’re not interested.
So that’s why your conversion rates, you’ve got to be talking to 100 people via whatever means and you’ll get between one and 3% conversion rate. So that’s the fundamental principle that underpins business.
So in terms of what we see. So the typical if you Google average email marketing, open rate, it’s about 18%. And in previous workshops, we have talked about how to improve your conversion rates, and how to improve who you’re targeting. So it’s all about getting that been really focused on the buyer persona, who actually are your customers? And especially with email marketing, because you’ve got a bit more control, the better that list is that you’re working with, the higher those rates are.
There’s probably one area where you can do quite a bit to improve the rates. But that means what you’re doing is actually just removing those people who you know are not interested in your in your product, and so on. So that’s how you therefore improve those rates.
Obviously, the less mail you’re sending out the better it is for the planet because every email you send out does use electricity and the spam filter and the ISP who can see who’s performing and who’s not who’s a spammer sending out 10s of 1000s of emails and getting a very poor open rate. And it can see who’s getting the higher conversion rates because it will see bounce backs coming back to the system.
In terms of Google search, probably 2% of your impressions so when somebody searches in latest widget and you’ve got an article or products which are on the latest widget you can expect to see about 2% convert. The more focused that keyword is, and probably the longer that keyword is or the more niche that keyword is, those percentages can skyrocket to 20, 30, 50, even 100%. But on average, you’ll get 2% of people seeing your advert actually clicking through.
And of course, these things compound. So when they arrive on the website, you still got 100 to 1, because they get on a website, and you need 100 visitors to get to one. So you can sort of see how numbers have to really be big to get to the kind of level of conversion that you need.
And that’s why we have to use ads. And you’d probably expect 3%, but it depends, if you’re very niche, you’re not in a heavily competed world, those figures will do improve. And generally you’ll see 2% of your web traffic convert. It’s all about getting that quality of audience.
So for example, we’re looking at working with a company who’s looking to target electricians, plumbers, and so on, are generally you target those who Facebook. Well, the problem at the moment is the way that the changes to Facebook, because of the latest changes to the Apple operating system IOS where the apps can no longer track the data. So Facebook no longer buy the data that people are interested in.
What you then have to do is use a mixture of Google search and put what’s called a Facebook pixel on your website, so that when somebody goes to the website, and they then subsequently go to Facebook, your ads can then appear because they know that you’ve shown an interest in the website. So at the moment, what we’re recommending is people use a combination of paid Google adverts, and Facebook in order to try and improve the quality of the audience that you get through Facebook.
It’s one of the big changes that happened this this this year, with Apple deciding that Facebook was getting too good and deciding that personal data and so on has all got mixed up which means that yes, our data is not being tracked as much which is a good thing. But then it makes it harder for us as businesses to target the right audience because on Facebook, it’s all about getting that quality of audience otherwise you don’t get reactions and Facebook goes oh, people aren’t interested.
So it is a bit of an ongoing battle. And you can improve your audiences by being more specific if there’s any of these hobbies interest challenges, fears, buying behaviours. I’ve got sort of a semi half idea of converting a VW transporter into a sort of camper van and and since I’ve started looking at vans, my Facebook profile has been full of Facebook ads for people selling vans, unfortunately the power vans as opposed to vans that you can convert so it’s not perfect by any by any means. But yes, if you can understand that buyers behaviour which we’ve discussed in previous workshops, then this will get a lot easier.
So what are the typical activities you’d have in your marketing? There will be recording on YouTube. I think LinkedIn also has one. So typical activities might be keyword research content plan, and then produce the content based on the keyword research and these tend to be seen as sort of one off activities. Although you may want to review it on maybe an annual basis, producing the content, obviously, is an ongoing basis.
The idea is to organically grow the content on your website, whether that be through more adding more products with great product descriptions, and great category descriptions, or whether those are articles. We’re constantly writing long, 2500 word articles. But I recognise that it’s not easy for everyone. And then you’ve got search engine optimization. And this isn’t just about doing backlinks, which you may have heard in the past. It’s about writing great articles and making the site easy to use make the site faster to use. There is a a recorded workshop on the website, which goes through that in a lot more detail.
Then you’ve got getting the social media out. So although social media in itself, probably I’ve spoken to a few people who claim to have had inquiries. But in order to get a really good inquiry from social media, you do have to work quite hard at it. But it is about brand awareness is about keeping your name in front of people. So though some activities may not have a direct conversion, they’re worth doing because they support other activities, we’re gonna be talking about that in a minute.
Then we have our friends, paid advertising. And if you’re serious about growth, serious about generating inquiries, this is an area you will need to look at now. Anybody who comes to us with serious intentions for growth, there is always quite a large element of paid for unfortunately.
Then networking conferences all add to it as well. So if you’re a high profile consultant, because we’ve worked with people like that, going to conferences, and being in person is also useful. And networking with other local businesses can also be a tool, but they’re all costs, these things aren’t free. There are costs of doing that. And therefore they should have a return.
I ran a large waste business 20 odd years ago, and because we were one of the leaders in the market, we always had to go to the leading exhibitions. And it was used to frustrate me that you’d say to them right, okay, we’ve followed up all these people who inquired? And then we had a stream of excuses from the sales team as to why they hadn’t – so frustrating, but we weren’t alone in that it was a it was a common problem, that people are so busy doing the doing that they then didn’t follow up on the things that should have been. But it’s all about making each of these, the reason why we worked with NetHub was that they’ve got a mechanism in there for tracking referrals, and therefore the value of those referrals.
We were in BNI, for example. And you know, it was a very good networking arrangement. But we generated about 50,000, because that BNI have their own system for other people, but very little for us because they didn’t understand how to sell or market our services. So in the end, we had to pull out of that.
So it’s constantly looking at what works and what doesn’t work. But we are going to talk about dependencies, because you can’t just say, well, I’ll just do paid advertising, because if you have a website that doesn’t have any landing pages and doesn’t have any video on it to convert them, then that becomes a waste of time. It just comes a brand marketing exercise, which is for me in these times of economic challenges is something that people I don’t think can afford. It’s great for the big corporates because they rely on that kind of thing, but not for if you’re a smaller size business.
So we’ve talked about different types of activities. So we’ve got assets website, download ebook, alone won’t produce any sales. That sounds a bit contentious because you’ve got this website I’ve put it up. But these days, I did have somebody say to me, I’ve got a website, but I don’t put it up because it might get swamped with business. That’s the least of your problems. Most websites when they go up, attract no traffic, and you have to do something in order to get that traffic to them.
You know, when we see it all the time, we’ve spent a bit of time writing an ebook for download, to give you the best marketing, how to generate a marketing strategy – that won’t produce any inquiries until it goes onto our website. And until we drive traffic to it by small means.
Advertising is the obvious one. For every pound, you spend you’re hopefully going to get 10 pounds or 20 pounds back, again, with Facebook ads, and there are fairly good stats on that. Email marketing. So the cost of doing email marketing is pretty static, doesn’t matter whether you’ve got a 20,000 email database or a 500 one. It used to be the cost per email, but these days using SendinBlue, for 50 pound a month, I could send out for 40,000 emails.
So it then comes down to the volume of activity in terms of conversion rates. And this is important for the model. So if you send out 20,000, it’s not going to cost you as much – it’s gonna cost you 50 quid, but you hopefully get 200 or so responses back. Obviously, there is a cost in getting the data in the first place. So we’ve had to split this out and give it a different category of asset. So that we can calculate it on the volume of activity and not on the cost, which these are based on.
And then you’ve got activity itself. So search engine optimization, for example is a classic. You’ll spend, typically between 750 – 1000 per month with a search engine optimization company. And for the first six months, it will do nothing. And then over time, you’ll get a presence, you’ll get volume, and therefore you’ll get conversion. On any e commerce site, one that’s really mature, you might get 20 to 25% of the traffic sales coming from search engine optimization, the rest has to come from paid.
Then you’ve got the nebulous thing called PR. You know, for some companies PR is absolutely essential. For others, it’s less and it’s really hard to do, because they don’t generate enough news. Networking conferences, can take time to generate inquiries. So the marketing may produce results, but it’s less predictable. Creating a financial model, that becomes a little bit more challenging. But we’ve worked out with of how to do that.
So we’ve got then types of costs. So we’ve got the cost of setting up something like building a website. Then you’ve got the activity with no return – so that was paying someone to manage an element of your marketing. So that might be an internal thing, or it might be an agency.
Technically, it should form part of the ROI. But if you say go to Google spend, and so it costs 750 a month for an agency to manage your Google advertising, that budget maybe 2000 maybe 3000, maybe 4000. Obviously, there is a link between how much activity you need to do and the budget, but it’s not that predictable. So we’ve put in an activity got no return. Technically, there is a return. But it’s then very difficult to calculate. So we just say right, for that activity, there’s no return.
And then you’ve got systems cost like web hosting. I mean, we spend probably 1000 a month on various elements of software that we use to manage all of our campaigns, from using AI tools like Jasper to hosting costs to social media software that posts onto social media, to analytical tools like semrush which analyse things. So the whole host, it’s amazing as an agency, how much money goes on this stuff.
And then you’ve got the activity with an expected return, where you’ve got a cost per click, and you’ve got all the data to back it up. Unfortunately, you can’t do this stuff without doing all this stuff. So one of the other things to look at in the model is the dependencies. So in order to do the AdWords down here, you actually have to do a lot of stuff up here.
So you need to understand your keywords, you need to understand what content is going to be applicable to people you’re advertising to, you obviously need a website, you don’t need SEO, need web chat so people will be able to talk to you. And you may need some social media to backup the advertising so that it’s not all sell, sell, sell. And obviously, if it’s an ecommerce sites, if you’re selling products, obviously, eBay and Amazon, Amazon has its own keyword management system.
But you definitely need a landing page. And what we’re finding is that landing pages are having to be more sophisticated. And since I’ve written this, I put down video marketing on there as a dependency of AdWords. Because in order to convert somebody landing on a website these days, they need a good understanding as to what you’re selling, and why you’re selling it and how that’s going to help them. And you might need another how to one.
So for a company, a consultancy, who’ve got kind of productised workshops, they’re actually going to do a little video of how they run the workshops. So you’ve got benefits video, then you’ve got how to video. And then we can do the landing page, then we can do the AdWords on the videos on the landing page. So you can see how a number of things all link to this.
And then once you’ve got people landing, you need to grab that email address. So again, you’ve got the marketing automation that goes after that. This is a typical flowchart. It looks complicated, and there are a lot of moving parts. But these are the things you need to do. This is a fairly simple one, where it’s it’s talking about our model of online workshops or webinars.
You can just see how much work just goes into something like this. When we start selling the app, it will have a different marketing funnel so we have a marketing funnel to build the audience for Vision2Success, and hopefully build a community of people who want to talk about marketing and get ideas on how to fix things. And then you’ve got you’ll have another funnel for selling the app.
So that’s looking at all the cost side, we then need to look at what the return is. Now generally we there are different ways of doing, whether you’re selling services, and generally if you’re selling, launching a service, consultancy type service, you need to productise it, there needs to be a package. And we’ve asked as our route to market where we really want to strip back marketing strategy and consultancy.
So it’ll be a combination of using the app and our expertise. But it means that we can do marketing strategy more accurately, faster, and come up with better solutions. But obviously, part of all that is we need to work out what the average sale is, but if you productize something that can be done.
In terms of an E commerce site, you’ll have your average sale order value, which you can then plug into this. So if you’re selling a whole range of products, you will know after you’ve been selling for a while, what the actual average basket value is what that average order value is, and so you’ll be able to generalise to some level.
The more data you have, the more robust the output. The outliers and so forth have less impact. And we could get into stats and talk about the normal distribution curve, which is like a bell shaped curve. And, you know, sort of the outliers on a normal normal distribution have less impact.
So the V2S model is the marketing activity with an expected return on volume of activity. So that’s either an ad or whether it’s a mail shot, multiply a conversion ratio of spend to signups. And then that’s multiplied by the average value of conversion.
Now you’re probably thinking do the maths here and saying, Well, actually, that’s a spend, I’m spending, you know, 1000 pounds, how does that convert into a conversion, in terms of a number? Well, if you divide the Google ad spend by the cost per click, then you’ll get the number because the power the the the currency cancels out. So you spend 1000 pounds, it’s a pound per click, and that’s not an unreasonable figure, by the way. And that means that you’ll get 1000 conversions, there’s 1000, people click that through. And then that thing can be a percentage, multiplied by the value of that conversion that gives you the potential sales and activity.
This then drops into quite a complex spreadsheet. Now, what I was hoping to do was, we will be talking about how this will work in the app. I’m not proposing to give the spreadsheet out because it’s way too complicated. But you can sort of see you’ve got the setup cost there spend with no ROI, the systems cost and this was all input into the model.
Here you’ve got a spend no ROI. So that’s our management costs as an agency, this is the ROI. This is a cost of the actual advertising, at a cost per visitor. So this is your cost per click, that produces a 1% conversion leads to 40 conversions a month, your average value conversion is 100. So therefore, you end up with 4000 pounds of estimated sales. And these are the things these are sort of types of calculations you need to be doing in order to determine what affects this.
So once you’ve got the app, you’ll be able to then play with these numbers, put your own numbers and see what then drops out and then see what you have to do in order to improve these numbers. No question so far. Appreciate this is quite heavy for one of my workshops.
What we will be doing, I was actually working at this morning is turning this into a course, we can use the YouTube video to give us the recording for today. But there will be a proper course.
Because I appreciate that this is quite complex. And some of you are probably scratching your head a little bit. Because it’s something that marketers don’t particularly talk about. But I’m keen that that people do get into this discipline.
So this is the actual spreadsheet with the those numbers that you saw in it. And then you’ve got sort of costs and just looks like a standard spreadsheet. But it’s quite a long one. And it’s difficult to maintain. Now in the output, you can switch these things on and off. So you can do scenario planning in a spreadsheet, which is what I do for clients at the moment. But with the app, it’ll be a lot easier to do.
So no plan survives contact with the enemy. So after implementation, you’ll probably in the app, use the numbers I put in. But hopefully you’ll go back after month after quarter, maybe every quarter and go back well. Has all those numbers accurate. If not go back and change the numbers. And there’s nothing wrong with that.
About two years ago built roads a model that took wind data and calculated wave data. And we did a lot of work on that. And in the end, the data was really accurate. So just recently bringing up to date, this is a passive house, which I’m presenting from which are built during lockdown. It was a really complex spreadsheet on how much energy we use. And then after a year, we gave the energy results back to the guy who managed the spreadsheet, and we were then a few percent of values, it was insignificant, there was no significant difference between what the model predicted and and what the House actually produces. So this stuff does work.
What I’d now like to do is, is really get that working with you guys. And so, as I mentioned, we have got the app that is probably a couple of weeks behind schedule at the moment. So I presented quite complex things, if I were to then try to show you how to use a spreadsheet, that complete well would fry my brain, certainly.
And until we built the app, so this all makes it a lot easier to collect the information, you can take a systematic approach. And then and that paid for version is now going to be December. So it’s going to be free till Christmas. And then we’ll place some restrictions and things on it. So we’ll have a free version, there will always be a free version, by the way. So I want you to put your data in there, it’s not lost. But it will be then the paid for version will have things that will enable you to do more things with it. But they’ll always be a free version.
So to log in, if you go to this URL, or it be there, go to vision2success.co and just press on app, you’ll log in, it’s live at the moment, so you can kick it around. The financial bits are there but they’re not working properly. But you can certainly start to look at it. You’ll need to enter the buyer personas, which we’ve talked about in previous workshops. If you go into into the recordings, it will tell you how to complete these. And then in a month or so time will be tested over doing the online course.
And what we’ve done, because if you looked at that previous flowcharts that I put up, we look for the flow chart that we had.
So if you think about this, this would be quite hard to to enter as individual items. So I’ve made life a lot easier for ourselves. So that you can then select – we’ve called them recipes. Initially there’s three in the system. Very happy if you want to have a zoom call, for me to capture your funnel are very happily put this in, because the more recipes we put into it, the easier the system will be.
And so that then populates the screen to end up with a list of all the assets. And then you enter all the details. And we populate it with some standard agency details.
If you’re employing somebody to do something, say to work on the website on a regular basis, just calculate what their hourly rate is and how many hours you’re expected to spend on it. This model works whether using an agency or whether you’re using employees and I have done it have done that spreadsheet for employees and that’s how I did it. I just calculated what their hourly rate is and to calculate an hourly rate really fast way, then you’ve probably found it’s quite accurate is to double the salary. It sounds sounds a bit shocking Oh, but I’ll pay the NI and so forth. But you also pay for desks, you pay for space to put for people to sit, space for the computer equipment. And actually, if you take your total costs, and divide them by the employees, you’ll probably find it comes out as twice the cost of their salary.
And so that’s how you work out their hourly rate divided by depends on how you do it. But as long as you’re consistent, so there’s 220 days, actual active working days in a year, because the rest of the holidays, sick, etc. So that’s how you work it out if you’ve got a team and internal team.
I’ve seen too many models where spreadsheets, where they’re making lots of money from day one, it doesn’t work like that, it takes time for the for any keyword campaign to be optimised, it takes time for the brand to get awareness, and so on. So I’ve, I’ve created two curves, which you can edit these and adjust them.
So doesn’t matter if you’re throwing 1000 pounds a month at something, it’s not really give you the return that 1000 pounds will give you after a long period of time. And this time can be as short as long as it is. But I do it, I’m very much a believer in conservative modelling. So that’s why, you know, I’ve put this curve in.
You can set it at one if you want. I’m gonna try the models as flexible as possible. Now, some of you will be arguing that you’ll get brand growth. And that is certainly true. So the other thing we’ve got is the adoption curve for growth of the brand. And obviously, this happens, once the other curve is finished, you can then start growing it, we could have put it all into one. But I kind of wanted to really to make the point that the startup will always be not as good as once it’s got going. And then once word of mouth gets out there and you’re getting referrals. That’s where you can build that into this curve.
And again, you can you can flex it, or you can just set it at one. Again, it’s it’s have to be in there. So this is what we’re working on literally first thing this morning. It’s not quite what I want, because I also want to cash because at the moment, you’ve got positive, these are startup the startup costs and going costs and this this is revenue. Clearly that should be negative. And that should be positive. But it should show you where the breakeven is.
And what we’ll be working on later this week is obviously a cash flow curve, which will look something like that. Okay, so I’ll put just put this in just to show wherever I say we’ll probably have a couple of weeks off. So I’m hoping on that on the 28th. When we have the next workshop I’ll be able to sort of tell a bit more.
