Ep. 271: December Income Report

Welcome to my December 2019 Income Report! Every month I publish an income report to take you behind the scenes of my online business and reveal exactly how much money I make, how much I spend and lessons learned along the way!

View all of my income reports here!

Important things that happened in December:

  • I wrapped up my final web design client.
  • I said yes to a lot of 1:1 meetups, in person and online.
  • I finished my website redesign.
  • I changed my domain name from wp-bff.com shannonmattern.com and redirected peptalksforsidehustlers.com to shannonmattern.com
  • I streamlined my sales evergreen sales funnels.
  • I created a special Top 10 episode of Pep Talks for Side Hustlers
  • I tested selling my Painless Planning Bonus Workshop
  • I helped my former employer with their year end.
  • I talked to a CPA about becoming an S Corporation.
  • Christmas + New Years!

Notes I found to myself in my planner:

Just a bunch of short lists of tasks for the website redesign.

Review of my goals

My target revenue goal is $15,000 a month by March of 2020.

My minimum baseline $10,000 a month – $1500 to cover my normal monthly expenses, I set aside $2500 a month for taxes, and pay myself $6,000 a month – two paychecks of $3000 each.

Total Revenue: $10,821.97

  • Affiliate Income: $1716.30
  • Courses: $4605.67
  • Done For You & Consulting: $4500

Total Expenses: $1686.25

Get the full breakdown of income, expenses and net profit month by month here.

Net Profit: $9135.72

What did I do with all that money?

  • I paid myself two paychecks of $3000 each in December, on the 15th and the 31st. 
  • I paid my business expenses. I put all of my business expenses on a Southwest Airlines Rapid Rewards Credit Card, and I pay that full balance off every month – so I paid it on January 1 for all of my December business expenses. And I do that to rack up points so that when I travel for business, I don’t have to actually pay for plane tickets! But I do pay off that full balance every single month, and I always have enough in the bank to cover it because I don’t do debt.
  • And I moved the rest to my tax account for when it’s time to pay quarterly income taxes.

My revenue was about $40 less than last month, but my net profit was about $670 less than last month because I did some extra, out of the ordinary spending that seemed small at the time… but it sure adds up. And that’s why I like to look at my numbers every month so I can nip that behavior before it starts to creep up and get out of hand again.

My passive income revenue was down almost 20% from November to December, which I would expect for December.

  • September 2019: 76%
  • October 2019: 76%
  • November 2019: 77%
  • December 2019: 58%

Overall 2019 Numbers

2019 2018 Difference
Total Revenue $127,208.01 $111,781.33 +$15,426.68
Passive Income $76,894.87 $55,118.98 +$21,775.89
1:1 + Consulting $50,313.14 $56,662.35 – $6,349.21
Total Expenses $36,009.07 $46082.62 -$10,073.55
Profit (Before Taxes) $91,198.94 $65,752.71 +$25,446.23
Profit Margin 72% 59% +13%

Biggest Lessons Learned

In December, I wrapped up my final web design client… And I also expect the contract with my former employer to end in early 2020 so very soon, 100% of my revenue will come from passive income.

It feels like I’m quitting my day job all over again, if I’m being totally honest. It feels a little scary, it feels like I’m taking a big risk, and my mind is going a little crazy on “What if I screw this up? What if this was a bad decision?”

So I gotta clean up that thinking first, because I know myself, and I know that I will do the work to make it happen. I need to make sure I don’t let the fear turn into inaction, but instead use it as a driver to do the things I know I need to do but that are uncomfortable.

I also need to make sure I’m on point with my marketing and making enough offers to get new customers to maintain and replace that 1:1 revenue, but also make sure it’s coming from a very strategic place where I’m making the right offers to the right people at the right time, and not a place of “Oh crap, I gotta make money to pay my bills.”

I’ve been there before, and the outcome is never good. In the past when I’ve been driven by desperation, the whole tone and energy of my marketing is different. Even if the words are all the same. And people can tell, even if they can’t put their finger on what’s off, something’s off.

So the biggest takeaway for me is to really just manage my mind and trust myself. 

Know what my minimum baseline is for me to contribute what I promised to contribute to my household, and make sure I do whatever it takes to make that happen.

So I pulled together two different projects for 2020. The first one is my minimum baseline. The amount of money I need to bring in and spend to maintain paying my paycheck, business expenses and taxes in 2020. 

Knowing those numbers is extremely helpful so that I don’t let my mind go off the deep end.

Minimum Baseline

2020 2019 Difference
Total Revenue 100,000.00 $127,208.01 +$22,791.99
Passive Income 100,000.00 $76,894.87 +$73,105.13
1:1 + Consulting 0 $50,313.14 -$50,313.14
Total Expenses 18,000 $36,009.07 -$11,009.07
Profit (Before Taxes) 82,000 $91,198.94 +33,801.06
Profit Margin 82% 72% +11%

But I also don’t want to settle for minimum baseline. I don’t want to play it small. I’m definitely a realist in that I understand that this is a transitional year for me where I’m saying goodbye to $50,000 in revenue and replacing it by growing another part of my business – and while I think it’s smart of me to know the minimum, something in me wants to go for more.

I think it’s because I have something to prove to myself. That I can grow into the person I need to grow into to reach my big goals. That the fear that comes up when I think about doing this has something to teach me, rather than being a warning sign to stop and go back to playing it small.

But it’s more than wanting to just prove it to myself.

I want to be an example to other people of what’s possible. 

For people who want to replace their paycheck so that they quit their day jobs, I talk about finding your magic number all the time:

Take your gross monthly pay before taxes and all the other stuff that comes out, and double it.

That’s pretty close to what your business needs to bring in every month for you to be able to pay yourself, pay your health insurance + retirement, business expenses and taxes.

I’ve done that step. And I’m really proud of it, and I’m an example of what’s possible for those of you who want to do that too – to leave their day job and be their own boss and experience the freedom that comes with that.

But my next big goal is to see how big I can grow my business under the constraints of the goals that I shared with you in my New Year’s Day Episode #267 – which is working 40 hours a week, keeping expenses to $2000 a month – and something I didn’t mention in the last episode, but continuing to pay myself a paycheck of $6,000. It’s very important to me personally to not put my personal financial security at risk for the chase of a big business goal. I’m sure my husband would appreciate that too. 

And that means I’ll have to double down on all the marketing tactics I teach my students inside my Website Marketing Lab – none of which are paid advertising, by the way. Not to say I won’t test out some paid advertising, but I have expense constraints. 

Because to make this happen, I need to double my passive income revenue over last year.

Big Goal.

2020 2019 Difference
Total Revenue 150,000.00 $127,208.01 +$22,791.99
Passive Income 150,000.00 $76,894.87 +$73,105.13
1:1 + Consulting 0 $50,313.14 -$50,313.14
Total Expenses 24,000.00 $36,009.07 -$12,009.07
Profit (Before Taxes) 126,000.00 $91,198.94 +$34,801.06
Profit Margin 84% 72% +12%

So whether I hit these numbers or not is beside the point. 

The bigger questions are:

  • Am I willing to take all of the action required to make it happen?
  • Am I willing to do things that make me uncomfortable?
  • Am I willing to pursue progress over perfection?
  • Am I willing to mess up + make mistakes?
  • Am I willing to change whatever I need to change to make it happen?

And the answer is yes. I’m willing to do all of those things. 

Aside from that whole can of worms…

ShannonMattern.com is live!

I mentioned that I finished my website redesign – so all my sites are now under shannonmattern.com – and it’s been a long time coming.

When I first started my business, I agonized over the name because I didn’t want to call it shannonmattern.com for a few reasons:

  • I was scared my employer would find out I had a side hustle and fire me before I was ready to leave.
  • I didn’t feel like an expert, and putting my name on something felt like a really big declaration that I was an expert. I wasn’t in the right mindset to be the brand.

Five years later, I’m in the right mindset to know that I don’t have to think of myself as “the expert” but share solutions to the problems I know my ideal client has, and I’m proud to put my name on that!

I also consolidated Pep Talks for Side Hustlers onto that website so that I had everything all in one place and I wasn’t trying to create content for my blog and my podcast, and putting everything in two places. I’m focusing so I can amplify in 2020, and that change is part of that.

I also took the time to clean up a lot of things and really streamline my offers and sales funnels, and created really clear customer journeys from my free trainings to my paid trainings.

I invite you to go check it out at shannonmattern.com, and then you can find the show notes for this episode – #271 – and leave me a comment and let me know what you think!

I also mentioned earlier that I said YES to a lot of 1:1 meetings and brain-picking sessions in December from everyone to old colleagues to new connections to students. And not just one of each of those! As I look at my calendar I see no less than 10 meetings, coffee dates, lunch dates, virtual coffee dates, that I did in December – and while I absolutely LOVE doing that – for many reasons – I’m going to have to be more careful about when I schedule things and what I say yes to because I did end up working more weekends to compensate for deviating from my normal schedule. But it’s good for to get out of the house, go meet people, have conversations one on one, so I just need to be more mindful of my overall schedule before I’m so quick to say yes.

Another thing I did that was really fun for me, but also took a lot more time than I planned was putting together the Top 10 episodes of 2019 back in Episode 266. Not only did I pull together the 10 beliefs those guests had to change about themselves to get where they are today, but I did outreach to all of them to ask them to share with their audiences. 

So again, just needing to be mindful of when I have a new idea, planning enough time to execute it because I ended up working weekends to make that happen too.

I also did a little test…. Well, a couple of little tests.

One, I secretly left my Free 5 Day Website Challenge Workbook at the $29 price point that it was at for the Black Friday sale for the whole month of December. I wanted to see how many people made a purchase of it at that price point vs. the normal $97 price point when there wasn’t a “sale” and use that data to decide on pricing in 2020. I haven’t run the numbers yet, but I will be doing another test in January of one more variable before I make a decision.

Two, I have a workshop called Painless Planning which is normally only a bonus for my Web Designer Academy + Website Marketing Lab Students to teach them a method of planning their time effectively so that they’re able to work on their businesses, go to their day jobs and still have a life, while getting done things that will move them forward in their businesses.

So I’d sent out an email mid-December asking my subscribers to hit REPLY + let me know their #1 business struggle, and the overwhelming response was TIME. Not enough time, too busy, overwhelmed. 

They gave me all the typical reasons behind why people who really want to grow their businesses aren’t doing it.

So I thought “Hmm… I’m gonna test this out. I already have this set up as a standalone course, why not create a full automation and offer it at the same $29 price point for a very limited time to my list since time seems to be a big barrier in achieving goals.

So here are the stats:

  • # Emails Sent: 3209
  • # Sold: 19
  • Conversion Percentage: 0.59%
  • Typical Conversion Rate for a product that costs between $0-$50: 3%-5%

So it could be the timing – I sent the email the week between Christmas and New Years… However, it did get a 32% open rate which is above average for me so it’s not like people weren’t checking email – but the timing could just have been people not wanting to spend money in their business.

It could be a lot of reasons, but you know what I’m NOT going to do? Speculate. I’m gonna go straight to the source and ask people why they didn’t buy and find out the real reasons so that I can make a decision based on facts whether I’m gonna make an offer like this again or not.

Side note: If you were one of those people who saw that offer and opted NOT to purchase, I’d love to know why! Send me an email at shannon@shannonmattern.com.

And finally, I talked to a CPA, Melissa Whaley from Episode 229 – which is a MUST LISTEN when it comes to knowing your numbers in your business. I’m hiring her to do my 2019 taxes because I feel like it’s time that I stopped DIYing and brought in a pro, and we also talked about whether or not becoming an S Corp is right for my business.

What I’m about to share with you is not legal or tax advice, it’s literally just what I’m doing. If you have legal questions I recommend Autumn Witt Boyd from Episode 247 and if you have tax and accounting questions, I recommend Melissa Whaley from Epsiode 229.

Right now, I’m an LLC which means I filed paperwork with the State of Ohio to set my business up as its own legal entity. So if I get sued, my business gets sued and my personal assets are shielded – which is why I have separate business bank accounts and don’t mix personal and business money.I file my taxes as a sole proprietor, meaning I do my regular 1040 tax form, I report all of my income, and I do a Schedule C to report by business expenses. I pay income AND self-employment tax on the difference between my revenue and expenses. And I file that as an individual, not as a business.

If I become a S Corporation, I’ll file some paperwork with the IRS to elect to become a corporation and then I’ll become its only employee. 

I’ll have to set up payroll for myself and pay myself a reasonable salary  just like a regular business would. 

I’ll have to have Social Security and Medicare and Federal, State and Local taxes taken directly out of my paycheck. I’ll have to pay whatever to the State of Ohio for unemployment and worker’s comp.

And then my profits above and beyond my reasonable salary are counted as income, not self-employment income, so I don’t have that additional self-employment tax burden coming out.

So the reason it makes sense for me to become an S Corporation is that I have enough cash flow to cover payroll (because remember, I’m paying myself and the government on every paycheck and not just quarterly estimated taxes), and I can save significantly on taxes as my revenue increases.

What I’m not entirely sure of at this moment is if I’m going to do this in 2020 or wait til 2021 since I am making such a big shift in how my business makes money. Payroll software is an added expense… And what if I don’t make enough one month to cover payroll as I make this transition? If you’ve been listening to this podcast for any amount of time, you know I’m like, extra overly cautious and don’t take risk lightly.

So I’ll let you know in my January income report what I decide to do.

Finally, I started reporting hours worked in October of 2019 to keep myself accountable… and I did a terrible job of tracking in December. I was all over the place with my schedule, with the holidays, with working weekends and getting my website done. 

My best guess after filling it in on my calendar is 181.5 – which is an average of 45 per week – which isn’t bad on paper except for that it was more like 48.5, 56, 50 and 27 hours. I also kept waking up at like 4AM, and starting work at 5AM just because I was in this mode of “I gotta get this done before I leave for this thing…” And throw in the nonstop traveling and family get-togethers and holiday parties, it felt like go-go-go all month!

Even though it’s been a goal of mine to take the last 2 year of December off for the past two years to rest and re-charge and be present for family and friends, I haven’t done it. Last year I moved from Infusionsoft to ConvertKit and this year I redesigned my website.

But in 2020… I shouldn’t have any big projects that need tackling so I’m hoping to make the holidays a little easier on myself in 2020.

Hours Worked:

  • October 2019: 135
  • November 2019: 135.75
  • December 2019: 181.5

So I know, that’s a lot of information. But I share this with you because I would have LOVED to have this level of detail coming from someone just a few steps ahead of me, to jump inside their brain, see how they think, how they make decisions, what they are doing to make money, how they spend it and all the things that I feel like I’m just making up as a I go sometimes!

I do it for myself to hold myself accountable, but I also do it for you, to be an example for what is possible for you, whether you want your business to look like mine (or nothing at all like mine!)

So if you have any questions for me at all, head over to www.shannonmattern.com/271 and leave me a comment on this income report and I’ll answer you there!

And if you need a website but have no idea how to get started, go to http://www.free5daywebsitechallenge.com and sign up for the 5 Day Website Challenge and learn how to create a website for your side hustle.

And if already have a website and you want to learn how to get traffic to it, go to www.jumpstartyourwebsitetraffic.com and sign up for my free 6-part mini-course that’ll walk you through how to get started getting targeted traffic to your website.

Find out how much money I made in November 2019 and exactly how I made it, what my expenses looked like and lessons learned along the way! @shannonmattern www.shannonmattern.com | #incomereport #peptalksforsidehustlers #onlinemarketer