Kate McKibbin walks through a simple budget framework for online course creators making up to seven figures. She breaks down five spending categories as percentages of revenue: owner's pay, team, marketing, education, and operations. A $15,000 monthly revenue example shows how to allocate each bucket.
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Hello guys, it is Kate here from hello Funnels and welcome back to Doing It Online podcast. Today we are continuing on with our theme of helping you to plan for this year to make sure you have your best year yet. And I'm going to be sharing yet another one of our little tools and processes that we take our clients through to help you to make sure that that you are planning in the most effective way possible so that you can get so clear on your goals and what you need to do to achieve them. And if you haven't listened to the last two episodes, I definitely would go and check those out because we shared our 90 day scorecard which is such an amazing, important tool. And last episode I talked you through how to actually set real, meaningful, powerful goals and then reverse engineer them so you have a crystal clear plan on how to achieve them. And today we're going going to add another layer and this is one that I think a lot of people forget about or just plain put off because it probably sounds painful and boring. So today we're talking about budgeting, but I'm going to share with you a really, really simple budget that you can go and back of nap can do right now. And it's just going to help you to plan for this year and also to start to, if you're not already, you know, really step into that more CEO role. Because having a budget, knowing how much you can spe, how much you should spend, if you're spending too much or not enough, having those sort of guardrails is really, really important as your business grows. So I'm going to break down the budget for you now and I'm also going to explain why I think each line item is important. As I said, this is like a five minute process. Not even you will need a calculator guys to get it done. But it is a really important one. One thing I do want to add before we jump in is this is a starting point. It is a framework, Please, please to edit, to tweak, to make it your own. This is not a black and white thing. Everyone's business is different. Everyone's priorities are different. The way people are structuring their business, their team, all that things, their lives, all very different. For example, for the last few years while my son's been small, I've wanted to only work part time. So working part time generally means you have to have a bit more team. So in some of the years I've had probably a higher percentage of on my team budget than I would have had in other years where I was able to jump in and do more things myself. So that is fine as long as you know the reason behind it. Like I said, this is your starting point and then, you know, tweak as you need. So pen, paper ready. Let's dive on in.
All right, let's talk about owner's pay. So that's you, right? If you're watching this and you own a business, then how much are you taking out yourself now? People who are just getting started, started again. Another little caveat. This can be tricky because quite often everything that comes in goes to you. But we need to start putting things in place to allow for there to be some revenue that's going back into the business. So the percentage that we like to allocate for owners wages and this is for businesses, probably up to seven figures. Once you get over seven figures, these numbers do change is around about 30%. So about 30% of revenue coming in. That's your pay packet. Amazing. Okay, next is team. Team costs about 25%. So almost as much as you're paying yourself, you're going to be paying into team. Now, again, like I said, depending on how much you're able to work, how much you want to work, you might flip that around. And that's what I had for quite a long time. So feel free to make this work as long as it all adds up to 100% at the end. That's the important part. So team costs 25%, marketing costs 25%. And this is something that a lot of people get really worried about. And I think it's also one that some people maybe have never even thought of. I know some people will have a rough percentage that they might spend coming up to a launch, but not necessarily as an overall number, as a month by month number, because marketing is something that is definitely worth investing in and that is worth investing in continuously throughout the year. But rather than just picking, again, random numbers, oh, it's coming up to a launch. I want to get a hundred people in the launch. Let's spend $5,000 to get a hundred people in our launch. If you have a budget, you can then go, okay, well, I know how much I can spend. Especially if you did the reverse engineering stuff last week, you should know, like, all right, I need to have this number of people in my promotion or in my launch or in my funnel. And when you know how much you can spend, then you know what the gap is. And they go, okay, well, I'm going to be short about 300 people. How do I go find those 300 people? And that's when you have start getting creative and start going, all right, well maybe I'll do a joint venture, maybe I will ramp up my organic marketing before that. There's lots of other options out there, but you need to know that these numbers are going to work for your plants. So marketing costs 25% then education and coaching. And yes, I'm not just putting this in here because I am a coach and mentor. This is a line item you need to be investing in up leveling yourself, your skills, your team skills. This doesn't all have to be for you, but you know, as your business grows, you also need to be growing your skills alongside it. And this could be mindset, this could be your marketing skills. It could just be certain times when you need to have that mentor or that coach to help point you in the right direction, to show you the things that you can't see because you're too close to it. There is always, always, always a need in every year for some kind of mentoring, coaching, up level education. So it needs to be a line item and at this sort of point in business we like to allow for around about 10%. So if you're 100k business then that means you have a budget of about 10k a year that you can be spending and should be spending on educational purposes. So final line item is your operations and other costs. So this is your email system, this is your, you know, any other SaaS or tech, maybe there's postage involved, all of that kind of stuff. That final amount is 10,000. So give you just like a breakdown, like a real world breakdown. Let's just say that on an average month you were earning $15,000 in your business. That means that owner's wages would be about four and a half thousand dollars, team costs 3750, marketing costs 3750, education and coaching one and a half thousand and operations and other costs one and a half thousand. So as I said guys, this is your framework, is your starting point. Feel free to tweak it to make it work for you, but you don't want to be tweaking it so much in some areas that you completely miss out and are unable to afford them. And you know, and hopefully if you compare it to how you are currently spending, it might help you see areas where maybe you're over investing or under investing and you can start to gradually work towards bringing them more back in line. So again, one final time, I'll just go through all those numbers. So you've got them if you want to write them down again. Owners pay 30%, team costs 25%, marketing costs 25%, education and coaching 10% and operations and all other costs 10%. And that should equal a hundred if my maths is right. And you know, it's a really great framework and a great place to start. So would love to know your thoughts on this guys. Any aha's? Any areas where you're like, oh, I have definitely over or under spent on this. Like, does this make you feel more empowered and excited or is this something that kind of scares you and freaks you out? Please let us know. Comment below the video or shoot us a DM over at HelloFunnels. We love, love, love to hear from you and we also love it when you share. It really helps us to get the word out. So if you can think of another business owner or online entrepreneur that you think could really benefit from today's podcast, please share it with them. We'll be forever grateful. Falls so that's it for me for this week, guys. As I said, hope you loved it, hope you got some value. And I will see you all next week, same time, same place, for another piece of doable marketing advice. See you then.
