I recently shut down a $100k+ per year revenue stream in my business and I’ve never felt better (and I’m now making more money without it too).
I’ve been doing group coaching calls for the past year, and private coaching calls for about 6 months. Together these services were doing well over $100k a year.
I shut them down for 4 reasons that I’ll explain in this email.
But first, a quick analogy:
It’s springtime here in San Diego and I enjoy a little bit of gardening.
We have beautiful butterfly bushes outside my home office window.
You’re supposed to trim butterfly bushes down pretty small in the winter time. Why? Well, if you let the branches get too big, the whole plant sags and can die.
You need to trim off most of the branches to the point where it almost looks like the plant is dead… so that in the springtime, the plant bounces back stronger than ever.
Which relates in a lot of ways to running a business.
So with that in mind, here are 4 reasons why I killed a $100k+ revenue stream.
Reason #1: Non-scalable, time-intensive activities, generally should be reserved for the early seasons of a business.
You don’t want to trade your time for dollars as you grow and develop because you limit your reach and potential.
But in the beginning, I’d argue that it’s 100% necessary and beneficial to trade your time for dollars because you need to have 1-to-1 conversations with customers to better understand their needs.
Even though I’ve been running CopyHour for 12 years, I sold it in late 2022 and re-bought it mid-2023. Doing 1-on-1 and group calls helped me reconnect with my customers. It was a valuable use of my time last year.
But then in early 2024, I reached a point where I felt like I needed to move on if I wanted to grow.
Now I’m looking to spend my time on activities that can scale without my time input and viola, it’s working extremely well.
Reason #2: 1 hour of Zoom calls does NOT equal 1 hour of energy spent.
Zoom calls absolutely torpedo my day and energy levels.
Don’t get me wrong. I enjoy talking to customers and people, but if I spend 1 hour on a Zoom call, it feels like 3 hours. I get less done before the call because I’m thinking about it… and I get less done after the call because my mind is fried.
The sooner you can stop doing Zoom calls, the more productive you become overall which ties into my next point.
Reason #3: “Zone of Genius” activities ONLY.
Gay Hendricks wrote a book called “The Genius Zone”.
“Your zone of genius is your unique power. It is a one-of-a-kind quality that you bring to your life and to your work and lets you do certain things better than almost anyone else.”
The one thing that makes me the most money is: writing.
The more I write, the more money I make.
I need to spend my time writing emails and sales pages. I need to spend my time writing product scripts and materials.
Even though I’m pretty good at group calls and coaching calls, like I said in point 2 above, it generally wears me down.
Writing generally makes me feel awesome. And it makes me more money in the long wrong.
Writing emails like this is my Zone of Genius and I need to spend as much time here as possible.
Reason #4: Forget revenue, look at “Effective Hourly Rate”.
Revenue is a vanity metric, we all know that.
It’s all about profit at the end of the day. But actually, it’s all about something called Effective Hourly Rate (EHR).
Effective Hourly Rate is your monthly income (profit) divided by the number of hours you work per month.
1-to-1 and group calls produce a lot of profit but the Effective Hourly Rate is capped. You can never increase your EHR unless you charge more per call.
Courses, on the other hand, might make less profit this month, but your Effective Hourly Rate only goes up each month after.
Because an hour spent writing now, can produce more income in the months to follow without me adding more time.
The take-away from this email is this:
– What season of your business (or freelance career) are you in?
– Do you actually need to know more about your customers or clients? If so, Zooms are great and useful.
– If not, think about how you can remove your time from the equation so that your Effective Hourly Rate is maximized & you can live in your Zone of Genius (which for most of us is time spent writing).
Cheers!
– Derek