THE CEO COLLECTIVE

ABOUT

SUCCESS STORIES

THE TOUR

FAQs

APPLY TODAY

THE SHOP

THE CEO RETREAT

THE CEO PLANNER

LISTEN TO THE PODCAST

GET THE RESOURCES

How to Reduce Your Stress to Dollar Ratio

by | Last updated: Apr 12, 2022 | Business Growth, Lifestyle Design, Podcast

Stress to dollar ratio is a concept that has completely transformed the way I approach my business everything from how I market my business how I run my business behind the scenes.

For every single offering that you have you have to be aware of the fact that there is a level of stress associated with it.

If it’s a low stress offering if it’s really easy for you to offer this product program or service, then it likely doesn’t take up a ton of your time and energy and it’s really aligned with your zone of genius which is so important.

This is how we create a great stress to dollar ratio. In addition to how much stress and time and energy it takes up there is a dollar amount associated with that offering.

When you bring all of these elements together you get a really clear picture on the return on investment for your offering.

Is this offering worth it?

  • Is it worth keeping in your business
  • Is it causing you more stress than it’s worth.
  • And if it is, how could we improve that or just eliminate it from your business.

Before we dive into how you can determine your stress dollar ratio I want to share a little bit more with you today about how this concept came into my life and how it’s completely transformed my business.

A few years ago I started working with Mark Butler, He’s my CFO, my chief financial officer. And he’s more than just a bookkeeper. He’s very strategic and how we look at the numbers in my business.

Most bookkeepers and accountants tend to look at numbers after the fact, so they’re looking at them after you know you’ve already created that revenue or after you’ve already spent that money.

Every single time I had been launching anything over the last few years, it would seem like the month after a launch the first thing out of Mark’s mouth to me is “wait, we need to talk about your stress to dollar ratio. It is just not working.”

That’s because if you’re launching and you’re dependent on launching you quickly get yourself in this cycle of like a high stress period in your business to kind of a recovery mode and there’s no solid baseline energy.

If you’ve been through a launch, you know this right like they require a lot of time and energy upfront.

You’re probably putting a lot of investment upfront into design, into Facebook ads, into making sure you can fill that service or that program or that product.

Because my business had shifted more in that direction, over the years Mark could see that we were at the point where.

Two or three launches a year could make or break how I can support my family and how I can pay for my team how we keep things moving forward.

It turned out to be a very stressful place to be. You might think that launching less means less stress but actually it put more pressure on each of those launches.

It meant the impact of a launch that went sideways would be felt by everybody. We started to break it down we really started to look at the individual level of stress that was coming from each different offering.

In my business, whether it was one on one consulting or my online mastermind strategy or even a standalone information program like get more clients, and as we started to break down the stress to dollar ratio we were able to make better decisions.

How do you figure out your stress to dollar ratio?

Today I have a special workbook for you and I highly encourage you to grab this workbook.

Get Your Action Guide to Improve Your Stress to Dollar Ratio!

Is your business stressing you out?

Download this action guide to learn how you can reduce stress and increase profits STAT!

Powered by ConvertKit

I’m going to walk you through the exercise in this workbook so that we can start to determine the stress to dollar ratio for each offering.

Once you have this information in front of you you can really start to make better decisions more strategic choices about what you want to be focused on in your business.

What revenue is your offering is generating?

Currently we’re recording this mid-September from this point backwards to last September. How much revenue did you bring in from just that offering.

Now this is your total revenue it’s whatever actually came in through you know pay and full payment plans what actually cleared and came through to your bank account for that particular offering.

Once you can determine how how much revenue that particular offering brought in then we need to actually look at how profitable that offering is now.

Profitability is not the same as top line revenue. Profitability is revenue minus all the expenses.

We have to take the revenue that all the money that came in and then eliminate all of the expenses associated with delivering that particular offering.

If you had design expenses, if you have web site hosting expenses, if you have client gifts that you’re purchasing, all of those are expenses.You have to figure out the profitability of each individual offering.

For example, usually a one on one service is going to be high profitability because you don’t usually have a lot of overhead incurred to keep that one on one service going.

When I’m mostly focused on 101 consulting, I know that my expenses associated directly with my one on one consulting are going to be about $25 a month for:

  • my scheduling tool, which manages scheduling and invoicing
  • paying my assistant who specifically with manages my one on one clients

Then I might also buy some individual gifts from my private clients. Other than that when it comes to working one on one my biggest expense is simply my time.

I would say that my one on one offerings are about 90% profitable of what my clients pay me.

About 10% goes back into servicing them making sure all you know we have the support systems in place to make our experience great and any other little things that we have going into that.

On the other hand, my more passive income programs like Get More Clients, are less profitable.

They are a little bit less profitable percentage wise. For example, with Get More Clients when we’re trying to fill this program we have it set up so that there is a automated sales funnel in place.

We have a webinar that people can opt in for and then learn about the program once they watch the webinar. After that, there are a few follow up e-mails.

There’s inherent expense with that. But once you have it set up it doesn’t really cost a whole lot. After that what does cost more is how we get people to that webinar.

For us in my business at this point we’re paying for Facebook ads and this has been the biggest way that we continue to get more people into this particular program.

We know that for every dollar we spend on Facebook ads we’re getting about $3-4 back. We know that we have a cost per client per actual paying client that can range from maybe $50 to$75 for that total purchase depending on Facebook ads.

By the time it’s all said and done, by the time you look at the expense of the Facebook ads, we look at the expense of my team managing the customer service answering any e-mails and helping people.

I’m not including the cost of creating the program or creating the funnel. I’m just looking at the cost to promote and run the program.

Get More Clients is about maybe 70% profitable. That means for every $100 we earn with that program only $70 of that is profits. It took $30 just to get that going.

There’s a lot more expenses associated with selling that than something like a one on one offering. Now we have to take a look at your time required to deliver this offering and not only to deliver it but to market it to sell it and to fulfill that offering.

What’s your time investment?

Going back to my one on one consulting, that really doesn’t take me a whole lot of time at all.

I have two coaching days available a month. We do every other week and if I’m doing a VIP day, it might take me one whole day a month.

Overall, when I’m looking at my calendar and figuring out how many days I actually spend coaching people over the course of an entire year it may be only 25 coaching days.

One month out of every 12 months was dedicated 100% to coaching if I were to squish it all together, but it’s spread out over an entire year.

I know that it’s only 25 days for me to run a program as a one on one offering that really could bring in six figures in my business. On the other hand, I have automated more passive programs.

It might take me an hour here and there to pop in our group to answer some questions maybe do a quick little Facebook live Q&A type of thing to continue to support people and add value as they’re going through the program.

But it honestly doesn’t take me much time and energy to run that program because it is designed to be more automated and more hands off. My involvement is very, very minimal.

Is this offering truly in your wheel house?

Is this in your business sweet spot? And if it’s not how could we improve it. How could we improve the stress level of delivering this offering?

The stress level of working one on one in my business is probably medium to low.

I say medium to low because for me I am an introvert and having too many days filled with too many calls will quickly change that to the higher end of the stress scale.

I know that for myself there’s a reason a very good reason why I only have two coaching days a month, it’s because when I come off a packed coaching day if I was still coaching maybe six people in a day, I would come in the next day and not be able to function.

I would literally be flat on the floor needing to do deep breathing exercises because I would just feel so drained. You know you have to know this about yourself.

For me, making this a low to medium stress level really means that I have to limit how many coaching days I have and how many coaching clients I take on to protect my energy.

Some people actually thrive on one on one. I know people who have 20 or 30 people they talk to in a week and it fills them with so much energy. But that’s not the case for me.

Know what is true for you because what is true for you is going to be different for someone else. Click To Tweet

What to do when your stress to dollar ratio is too high

The point that I was making earlier when I had this conversation with my CFO Mark Butler, when we had this conversation; it was really about this time last year it was at the end of a launch for my signature program, Sweet Spot Strategy.

And up until that point I had only been launching this program two or three times a year. I would open enrollment and then shut it down, which meant that for us this is my signature offering like 80 percent of my revenue was dependent on the success of those launches.

When we had this conversation about a year ago he was saying to me “Racheal, the stress to dollar ratio is too high.”

Mark could see the pressure I was putting on myself, he could see how much time and energy it was taking for the team to pull off a big launch, and it really a huge influx of time and energy and money.

Then you need recovery time. You just feel depleted because you’re going so hard and so fast for such a short time period. So we decided that we were going to take it through these questions that I just shared with you.

Take a look at it for your own offerings.

You’re going to want to ask yourself three questions, if this stress to dollar ratio is just a little too high. Which it might be you might have some that are working they’re working great they’re profitable.

They aren’t taking too much time and energy they feel easy and aligned. But if you are feeling a little stressed out you need to ask yourself a couple of questions first should you keep it in OK.

  • Is it highly profitable?
  • If the stress to dollar ratio showing you that you’re getting a great return on investment for your time and your energy compared to how much stress you’re taking on for it.

Should you evolve the offering?

Do you love aspects of this particular offering? We’ve been dissecting here, but there’s a part of it that you need to change in order to make it work for you better.

If you need to evolve it especially then the next thing you really need to ask yourself right now is, what are two to three changes you could do right now, in the next few months, in the next year to improve your stress to dollar ratio

Once we started shifting the system I was actually able to do weekly Facebook lives and it’s been literally a whole year of me showing up every single week.

Inside of that community, I was able to create more useful bonuses for people and that wasn’t possible before because so much time and energy was spent either launching or recovering from launching.

So what can you do to improve your stress to dollar ratio.

If you haven’t asked yourself those five questions that we went through:

  • what’s the revenue
  • the profitability
  • the time involved
  • the energy involved
  • and how stressful it is

I encourage you again to go ahead and grab the workbook that I created just for today’s episode.

Once you run each individual offering through these questions, I can promise you that once you run them through these questions you’ll have a really clear idea of what truly is working for your business.

You can spend more time and energy on what is working and decide what’s not working so you can figure out what you need to let go of what you need to evolve.

Get Your Action Guide to Improve Your Stress to Dollar Ratio!

Is your business stressing you out?

Download this action guide to learn how you can reduce stress and increase profits STAT!

Powered by ConvertKit