How I Spent $20,000 - Monthly Business Expenses Breakdown

When we listen to how much people make online, they are more than excited to say I make five figure months, I had a six figure launch, I made seven figures this year. But what they aren't sharing with you is how much they actually spent to make that money. And sometimes the truth is when you see behind their businesses, which was a rude awakening for me when I started to see behind some online businesses, is that they are spending way more than they are making. And so why they are saying these numbers are huge because they are losing money in their business. Now one thing that I can say that I am very proud of is for the first eight years in my business, I always at the end of the year had a profitable business, meaning I made money. Right? I wasn't in the negative being full transparent. I will share this year, 2023, we are first time ever in a negative year and it's been a hard, I would say pill for me to swallow because of eight years of success. But there's been a few things that has caused this change in 2023 and I had prepared for it in specific ways as well. So I'm going to walk through all of that and also dive into each basically expense line that I have for my business. Now I will say I am not an expert in finances and accounting and profit and loss statements. And that's why I highly encourage you to find an accountant or a bookkeeper to help you with some of this Stu. Because the best way you're going to start making money in your business and make sure your expenses aren't getting out of control from experience is having somebody to look at this for you, but also having that person kind of hold you accountable for you to look at it every week or every month as well. And that's what my accountant does every single month she sends over this full report and I'm able to look at the profit and loss statement and then we get on a call and talk about it. We talk about what's happening, we what am I planning to do to adjust this? While this isn't a strength of mine, I have been forcing myself especially this year to take time every month at the minimum to learn more, to look at my expenses and really start to evaluate every single decision I make when it comes to spending in my business. Predominantly our biggest revenue generator was my agency where I basically did my seven figure entrepreneurs YouTube channels completely for them. Everything but filming. And while agencies tend to have a small profit margin because of the amount of clients that we had, my agency was able to generate Tens of thousands of revenue in my business every single month. Now that is just one side of my business. There are a lot of expenses as well that goes into the agency, like employees, contractors, and I'm going to talk more about those in a minute. But it also had another branch of my business which was the education side and the coaching side. So we basically cut off all revenue that we were generating from the agency to focus all of our efforts into our coaching clients. And this is where that imbalance and our revenue happened. Now, because I knew this was a big change that I was planning to make and I wasn't expecting it to go smoothly or go perfectly because let's be real, it's online business. Things are never clear and you never have a really clear game plan to know what's going to happen. I had a significant amount of money from the last eight years that I had stashed away in a business nest egg. Bas would be able to keep us at least through the end of the year. And this is one thing that I would highly encourage you as we start to go into these expenses is as you start to see what your expenses are each month, try to start building up a business nest egg of expenses for about four to six months. It's good to have this safety net if a launch doesn't go well or you don't bring in enough money, a few months like we had, because then we have this nest egg to dig into to get everything course corrected and going back around without necessarily needing to panic or needing to burn your business down. So the two biggest expenses in my business are contractors and employees. Like I said in the agency side, it is very expensive to run an agency. I have a full time employee in the agency side of the business which gets a full time salary. When I say salary, I also have to pay those additional things in salary like Medicare and Social Security. So it's not just their salary, it's just other things you need to pay for as well. I also had three video editors as well as contractors in the agency. I have a thumbnail agency company that I pay for to help us create our thumbnails. Then there are a wide range of softwares that I use that basically are used between the agency and the education side of the business. So we don't necessarily split that out. But those are the three major expenses on the agency side of the business. Because a lot of the other expenses I have kind of float between the two branches. Again, just the expenses dedicated to the agency where the full time employee and then the video editors and also the thumbnail agency expenses. So in my business last year, we made almost $700,000 in the business. And the expense of the agency employee is about $4,000 each month here on my P and L statement, the editing agency, we pay $1,000 a month for all the thumbnails that we create for our agencies and then our video editors. It will depend on how many videos our clients actually make that month. Sometimes they are on schedule. They do four a month. Sometimes they take a month off. Sometimes they're at 2 and fluctuates. So since that's the bulk of my agency costs, let's also talk about everything combined, because the education side is pretty much the rest of my expenses. And I have two more employees. Those employees, you can see I spend about $11,000 a month on those employees. And then I'm an employee as well, because my business is an S Corp, which means I'm an employee of my business. And I get a paycheck every single month. And you can see right here, every month, my paycheck is 50, $200. Now let's dive into the biggest expense and the expense that can start to get away from you, minus subscriptions and courses, which we'll talk about next. But it is contractors. Now, there are contractors that I have for video editing for my clients videos. And you can see that one right here for this particular month was around $978. And that comes out of the profit the agency is making from what we charge our clients. We only have very limited clients over there. Then the next video editor we're looking at is my personal video editor. And I spent around seventeen hundred dollars for for my videos each month to be edited. Another one of my contractors that wasn't a normal expense that we had over the summer and moved into September as well, is an intern who's going to college for marketing was $1,250 in September. Now, one of the things that took a big chunk of expenses in September was I switched ad agencies. And so that meant I paid for ad agencies twice. You can see I made an expense of $2,498 for an ad agency. Then I basically had to pay double as I spent, switch to the new one so our ads would continue running for another $2,500. And yes, that was a huge hit. Another one of our biggest expenses and contractors is our copywriting team, which we love. And what Latasha does over there at Uncanny Content is she takes these videos, she puts them into words for my emails, for my blogs, for my social media, and also as we do launches, she's able to write launch emails and sales copy as well. And in September we were preparing a new workshop. So that expense for our copywriter in September was another $2,500. As I mentioned, we were setting up our new funnel for a workshop, profit per view, if you want to check it out, because it is beautiful. All because I hired our designer, Mackenzie Matter for a half VIP day. And that's where this $1,250 expense comes in as well. Because she can do it so much better than I can. She can do something in a half a day that's going to take me multiple days to do so. So it is just easier for me to pay her to do it. Now, this expense for $702 is a guest expert coach that I have inside of my 10k on replay program. This is a copyright expert. And so all of my clients inside of 10K on replay can send her copy sales copy sales pages to review and then I pay her by hour so she tracks the hours she spends providing these audits. This particular month is around $702 worth of her hours. This other thousand dollars expense was for a virtual assistant. We had this virtual assistant helping my marketing director create graphics, create Pinterest images just wherever she needed help. We also had her doing customer service in our inbox. And so that was in September as well. And then we have our Pinterest expert. She charges $375 to run our pins on our Pinterest. So you can see that's almost $15,000 for contractors each month. And this is something we are reevaluating because again, as we transition out of agenc over to coaching and education, some of these things can definitely be cut. But we weren't there yet in September. We are getting there. It's been a long time to pivot. But being transparent here, the next thing I want to share is what I pay for education. And this is basically coaching and investing in myself because I truly believe it is important for you to invest in yourself. And you're going to see the amount of money that I spend on coaching each month is about $5,000. Now, the reason this is a little bit more expensive, it will come down a bit is I recently joined a newer coaching program and I'm paying it upfront the first three months. I have to pay the first three payments for the extension of the time I'm in there. So I only have one more payment after September to pay. But that particular coaching program was for something specific I'm looking for. The other $2,000 coaching program that I'm a part of is for my overall business strategy and kind of more for that day to day freak out coaching. And the other $686 monthly expense is a coach to help me specifically in live launching. We are planning a few live launches in 2024 and we really wanted to help elevate our live launches. So I do believe investing in yourself is important because had I not invested in any coaching, I do not believe I would be where I'm at in my business. Is it expensive? Absolutely. Does it help me grow my business and become a better business owner? A hundred percent. If you're thinking about education, I would think about what specifically you want help with. And I do have a $99 monthly expense for a membership that I am a part of. And that membership is for me to engage and connect and hear from other business owners as well. Also to make relationships, be on podcasts with them. So I do think that's important to find some way to network online. I'm going to jump right into this $1300 expense and that is what I pay every single month for my accountant who also does my yearly taxes which is a hundred percent worth every dollar that I spend. So my accountant breaks things up a little bit differently. So I want to look at a combination of two categories, softwares, dues and subscriptions and then office supplies. So you can see my subscriptions are just a little bit over $140. And within that subscription is the software Deadline Funnel which helps me set up evergreen funnels so that they automatically switch over over in a specific amount of time. Google. Because my entire business runs on Google. We work on Google Drive. My employees have Google email addresses, AI Copy Club. I love to just see what's going on in AI. It's such a small expense that I really enjoy seeing what kind of templates Brittany is creating over at AI Coffee Club, Zendesk, which is one thing that I am getting rid of. It is a way that I could message people on my sales page so I can plug it in. I can make this, you know, DM type conversation with people on my sales page. I am using a new new tool now, which is Video Ask. This is why it's so important for you to be reviewing your expenses. Because sometimes you're paying for two softwares that do the same thing because you forget about the other one. So this is something I can completely remove from My expenses next month. Asana is my project management tool. It's over 57amonth because I do have multiple team members on it. My business runs on it. I couldn't live without it. So it's absolutely a must. $25 for Zoom. Again, my business runs on Zoom. I need Zoom $133 for Zapier. That just allows me to automate so many things in my business, which in return allows me to minimize the amount of employees that I really need to hire. Because if I can automate things, they're done by the robots. About $12 for Dropbox, where we save some files. $63 for my QuickBooks account, $10 for for Adobe Lightroom. And I use that to filter and edit all of my thumbnails before I send them to custom thumbnails. So it's the photo that I'm editing. Vidiq I talk about Vidiq in many videos of my last series where I talk about how I build a YouTube strategy. I will link that up here, but it is key in doing your profitable keyword framework when you are building your YouTube strategy for your channel. Loom. I love Loom. It allows me to communicate back and forth with my team to show them something without having to get on a call. I'm also able to send personal messages to people that are leads of mine as well through Loom Audible. I probably could cancel. I'm doing a really terrible job at listening to books, so that's probably a subscription I could cancel here as I'm reviewing it. Live with you Tailwind. That is a Pinterest tool to schedule out pins. We can probably cancel that as well because we are not. Just because we're not going to be focusing on Pinterest for the next few months. I have to reevaluate in 2024 if that is a platform that I do want to focus on. Amazon mailgun over $260 and that is my email server provider and that does charge me by the amount of emails I put out. So in September we had a launch so we were sending a lot more emails out. So our bill was much higher because of the amount of emails that we put out. Frame IO was at $90 and when I saw that I immediately went in and readjusted it. We had more people on Frame IO, which is an editing platform platform where our video editors can upload the video and we can provide feedback on it. Since we have less agency clients in frame and now we have less employees in frame, I'm able to minimize the amount of seats that we have in there. So that price is definitely going down in the next month. Typeform, which is that other tool that I mentioned, I'm going to eliminate Zendesk because Typeform is where I can send video asks. I can put my face down in the bottom of the screen just like this and it looks like I am talking to you. It just increases the chances of people having an open communication with me when they comment or reply. It goes directly to my inbox and I can get that conversation going to capture leads and answer any questions to increase my conversion rates on my sales page with this hello Audio is our private podcast platform. So we have a private podcast for our courses so that people can also listen to the course course while they're on the go. And we also have something fun planned for that in 2024 as well. Ad Event is a software that we use to get people to add a specific event to their calendar. So because we are doing these bi weekly live events, we want people to show up and increase the likelihood that they will show up. So what Ad Event allows us to do is embed it to the thank you page in the emails and say just click this button and get it on your Google Calendar. Get it on your I calendar so we can again increase the chances people actually show up to our events. And don't forget chat GTP 100% worth it. I spend at least once a day in chat GTP and then we did have a subscription renew $197 that I'm seeing and realizing this is something that we can eliminate. It is a social media template subscription and I just don't think we're going to need it anymore. We are really simplifying our content strategy moving forward and so we can eliminate that. Also this month we had some of our domains renew, so $100 expenses for Namecheap to keep our domains ours. And then we did spend about $2,200 on Facebook ads in addition to those $5,000 we spent on the ad agency. So that brings us to about a $49,000 expense line, which is insane, honestly. And we were negative about $12,000 this month as well. Like I said, I have created this nest egg to be able to balance that. And we are at the end of October as I'm recording this video and I think we already have it turned around. We've evaluated this profit and loss statement prior to this video. We've evaluated kind of where we want to go with our business here the end of the year and moving forward. And we are definitely making those changes slowly but surely seeing the results in the next couple of months. But I do want to call something out here because sometimes you think that bottom line needs to be massive and in reality you really just want to break even. Because if you are paying yourself like I am, I'm already making a salary. If you want to pay minimal amount of taxes, you want to break even at the bottom of this line every single month. You want to have the exact same amount of expenses as you have revenue. Now again, I'm not a tax professional to give you all the advice on this. This is how you want to approach your business. Your goal is to pay yourself out of it and eventually get to a point where you're breaking even. That's really the smartest way to do business. So what are my best advices for you to get started or to better track your expenses? I encourage you to either block time once a week, maybe like on a Friday afternoon if you're not too brain dead, maybe a Monday morning to just review all expenses from the week before. Or at least take time every single month to do this. At least a two hour review like I did. You know, I said, oh, I could probably cancel that subscription service. Now in my next video I'm going to share with you the 10 must have tools that I will not never eliminate from this profit and loss statement. And I'll also share with you the ones that I cut immediately. You can watch that video right here.