How to Reduce Your Stress-to-Dollar Ratio

Racheal Cook: If you're anything like me, you are thinking big picture about the year ahead and you might be asking yourself, “What offers am I taking into 2022? Is there anything that I want to create or anything that I want to cut from the list?” As you are navigating these big decisions, one thing that I'm always asking myself is, does this offering create stress for me? How stressful is it to deliver this offering? Stress-to-dollar ratio is an idea that has completely transformed the way I approach everything in my business from how I do my marketing, my sales, and choosing which offers I want to move forward with. In today's episode, we are going to be diving into how you can reduce your stress-to-dollar ratio.

Are you ready to grow from solopreneur to CEO? You're in the right place. I'm your host, Racheal Cook. I've spent the last decade helping women entrepreneurs start and scale service-based businesses. If you're serious about building a sustainable business, it's time to put the strategy, systems, and support in place to make it happen. Join me each week for candid conversations about stepping into your role as CEO, the hard lessons learned along the way, and practical profitable strategies to grow a sustainable business without the hustle and burnout.

Hey, CEOs. I am ramping up towards 2022. It always feels to me like this is my favorite time of year, not just because I love the holiday season, I love getting through Halloween, then Thanksgiving, then Christmas with my family but I love that to me, this time of year always feels like a great time to evaluate and think about what I want to be doing in the year to come. This is a great time to really look over how things have been going, what is working, what isn't working and moving forward from that place with my big picture goals in mind. I'm growing this business with the intention that it comes from a place of ease and abundance. That everything that I'm creating and offering is in alignment with how I want to run this business with my strengths, with my team, with my community. It's a great time to press pause and evaluate some of these things.

Thinking of pressing pause and evaluating these things in addition to today's episode, I want to make sure that you know the Plan Your Best Year Ever Challenge is back. We are kicking off November 1st for a live round of Plan Your Best Year Ever Challenge. This challenge is one of my favorite things I've ever created that will serve you in helping you create your 12-month profit plan. Not only making sure you have a solid strategy for your marketing and your sales moving forward into 2022 but also making sure that it is aligned with what you actually want for your life because many of you know this, my top value in my business is life before business. If your business isn't supporting the life that you want financially, emotionally, energetically fulfillment wise, if you are not getting all of that from your business so that you can live the life that you really want, then you know we've missed the point. The entire Plan Your Best Year Ever Challenge is built around the idea that you can have work that you love and the life to match. We don't have to sacrifice our life in order to have a successful business. We can have both when we design it with intention. That's what we do in the Plan Your Best Year Ever Challenge. Join us, rachealcook.com/bye. We are kicking off November 1st. We will be sharing it here on the podcast. If you sign up, you will get the workbooks that go along with the challenge, which is the most important part because you can listen to the quick overview of how to do that day's work but if you don't have the workbook to go along with it, you won't have the game plan moving into 2022. Make sure you join us rachealcook.com/bye.

Let's dive into this idea of how to reduce your stress-to-dollar ratio. This concept was a game changer for me. I think for a lot of us, we tend to get an idea mode, we tend to think so big picture that we forget to really run our ideas about what we want to create and offer through the filter of, “Does this make sense for me? Is this actually going to work with what I want my life to look like or what I want my business to look like? Is this going to be fun or is this going to be stressful?” Sometimes, we end up putting things out there that aren't aligned and it just makes business feel like so much work. It doesn't have to be that way. For every single offering that you have, every product, program, or service you have, there is a level of stress associated with it. Now, if it's a low stress offer, then it's really easy for you to deliver this product, program, or service. It doesn't take up a ton of your time and energy. It is aligned with your zone of genius. These things are so crucially important. This is how we have a great stress-to-dollar ratio.

In addition to how much stress, time, and energy it takes for you to deliver each offer, there's also how much revenue do you make out of each offer? How profitable is this offer? When you bring all these elements together, you can get a really clear picture on the return on investment of your time, your energy, and your stress in terms of how much you make off of each offer. This is how we can start to ask ourselves, is this offer worth it? Is it worth keeping in your business? Is it causing you more stress than it's worth? If it is, how could we improve that or just eliminate it from your business? Before we dive into how we can determine your stress-to-dollar ratio, I want to share with you a little bit about how this concept came into my life and how it's transformed my business.

Early on in my business, I started working with a guy named Mark Butler. He's incredible. He's still out in the world. He worked with me as a CFO. He was so much more than a bookkeeper. He was very strategic and helped me look at the numbers in my business, and how I was managing my money. Most bookkeepers and accountants don't tend to be very strategic. You will know whether or not you have one of these really quickly because all they do is do the books at the end of the month, do your taxes at the end of the year, and they're just doing the basics but they're not proactively advising you on your cash flow or ways that you can make your business more efficient. Most bookkeepers and accountants, most money people are only looking at the numbers after the fact. They're looking at them after you've already done that work, after you've already created their revenue or already spent that money. If you don't have a strategic person on your success team, then you need a strategic money person. This is my pitch for that.

I no longer work with Mark. He moved on to different things in his own work but now, I work with Josh who is incredible. He helps me think through my cash flow, think through what I'm doing, think through how I'm spending and investing my money. Every time we sit down and have a strategy meeting about the money in the business, we talk about what is the stress-to-dollar ratio, how stressful is it to offer each thing that you're offering in your business? Mark would say to me, “Hey, this is too stressful on you. It's taking too much effort. It's not working.” You might be here. If you are feeling like you're launching and you're feeling like you're experiencing launch burnout, which is something I hear a lot, you're exhausted all the time, it's overwhelming all the time, it's so much work but your business can only succeed if you do launch after launch after launch, then you might have put yourself into a high stress-to-dollar ratio where it quickly starts to feel like it's not worth it. It's not worth it to be stressed out for half of the year in order to keep up with this impossible launch cycle. That's where I had found myself years and years ago. I decided, “You know what, I don't need to do this. I don't need to do this to myself.”

If you've been through the big online marketing launch, you know that it can take a huge investment of money and time up front into design, into Facebook ads, into hiring a team to run those Facebook ads, and to make sure all the technology works. That's just running the launch. That's not even getting to fulfilling the product, program, or service to actually delivering it. Because my business had shifted over the years in that direction for a while, I had people on my success team. I had my financial people, I had my legal people, I had my ops manager behind the scenes who all were saying, “This is too stressful for us, we need a different way.” One failed launch could make or break my business. It was so stressful, especially because I'm the sole breadwinner for my family.

Then we got into 2016 where I had a rough launch right at the same time that we were going into the 2016 election. I started to really see that I needed to make things simpler and less stressful because I don't want one launch to be the difference between me being able to keep the food on the table or me succeeding. I don't think that any of us want that. I think a lot of us want businesses that are going to be sustainable even if something happens and a particular campaign does not go the way you hope it will. We started to look at the individual level of stress for each offer that I had in my business. In my business, whether it was one-on-one coaching and consulting or the CEO Collective or the CEO Accelerator, we started to break down the stress-to-dollar ratio to figure out what is going to make the most sense, what are going to be the best options for the business moving forward. In fact, this was one big reason we left the standalone course model and moved in the direction of the incubator model that we have for the CEO Collective because I wanted it to be less stressful, more enjoyable, more aligned for my business.

I have created a workbook for you. If you want to figure out your stress-to-dollar ratio for each offer, so you can make a smarter decision moving forward into 2022 about what you keep and what you let go, then head over to the show notes, rachealcook.com/stresstodollar, we'll have a link in there, so you can download this action guide and help you reduce your stress, and increase your profits going into the next year. Once you have this information in front of you, it will be so much easier to make those big decisions for the next year. First up, as you look at each offer, you want to ask yourself these questions: What revenue is your offer generating? You want to know how much revenue each offer actually brings into your business. This is something that if you haven't been on top of your numbers, you're going to have to go back through your software, your Stripe, your PayPal or whatever and figure out how much revenue you are bringing in from each offer, and what percentage of revenue is that. That is really important for you to know.

Now, you want to be thinking about how much revenue did you bring in from that offering total, so what has come in through pay and full, what has come through payment plans. Specifically right now, we just want to focus on what has cleared your account, what has actually hit your bank account, not projected revenue. We want to look at what is actually coming into your account right now, whether it's pay in full or payment plans for each offer that you have. Once you think about how much revenue that particular offer has brought in, then we actually want to sit down and think about how profitable that offer is.

It’s official, we are fast approaching the final stretch of 2021. It’s that time of the year when we’re starting to look ahead for what we want to accomplish in 2022. I know you’re a high-achieving entrepreneur who loves the fresh start of the New Year. And you’re ready to have a real plan to yes to strategic action steps and say no to shiny objects that keep you spinning your wheels in your business. That’s why I’m so excited to announce the 100% free 5-day Plan Your Best Year Ever challenge starting on November 1st. In five days, I’m going to walk you through a strategic planning process that will help you to map out your business and marketing strategy for 2022, month-by-month, so you’ll have a real profit plan that helps you to stay focused on your goals. All you have to do is head over to rachealcook.com/bye and join us.

Profitability is not the same as top line revenue. Profitability is revenue minus all of the expenses. We have to take the revenue (all the money that came in), then eliminate all of the expenses associated with delivering that particular offer. If you had to pay a designer, if you had to pay for a website to be created, if you have client gifts that you're purchasing or if you have books you send out to your clients, if you have a coach that's working with your clients, if you have software that you need in order to deliver the offer, then there's going to be a little bit of a lower profitability because there's associated expenses with delivering that particular product, program, or service. We see this in the CEO Collective. We have a membership site. We use coaching software. I have coaches I pay to run the program with me. That means it reduces the profitability a little bit because there's overhead associated with that. But you might see that you have other offers that are very, very profitable because they have low or no overhead. A one-on-one service is often going to be high profitability if you're not outsourcing any of the deliverables to anyone else.

For example, if I have someone coming into work with me one-on-one in coaching, I know that my expenses directly associated with that coaching consulting client is really just going to be like whatever it costs for me to use my scheduling tool, Calendly, and whatever time my assistant is spending with me to work with my one-on-one clients, and whatever gifts I might send my private clients, which is something I like to do. But my one-on-one offerings are highly highly profitable, maybe I would say probably about 90%, 95% profitable, then 5% to 10% goes back into servicing them to make sure that they are having a great experience and that everything is streamlined behind the scenes.

On the other hand, I have programs that are less profitable because they have more expenses. Programs that have more expenses associated are not going to be as profitable but you have to think about this for each one. When I previously had passive income products, which I've pulled from my suite, they were less profitable because we had to have an automated sales funnel in place, we had a webinar system, and we had an ad system in place. We had all these things behind the scenes to make that work. The biggest thing that we ran into is the cost of selling it was half the cost of what we made from the program. While it was very low stress because it was automated, it wasn't super profitable. We started looking at this really, really closely in my business to figure out what does it take to promote the program and run the program. You might have an evergreen offer that is selling on demand. You're sending ads to it and it might be 50%, 70% profitable. Every $100, the revenue that comes in only 70% of it or 50% of it is profits. It took a bit more for you to get those sales in. That's something you have to think about long term. If there's something else behind it, it might make more sense. If there's nothing else behind it, like an upsell behind it, then it might not make sense long term to keep that.

There's a lot more expenses associated with selling something that is automated and requiring advertising to get where you want to go or something that has a lot of inherent costs as part of it than usually a one-on-one offer. You gotta make the call. What does the profit margin look like? What is the revenue level that offer is bringing in? Then you have to ask yourself the time investment. Going back to thinking about my one-on-one coaching. Currently, I only coach a few people. I have two coaching days a month. We do it every other week. If I'm doing a VIP day, it might take me a whole day a month. This is something I don't even promote. It's very quiet behind the scenes. Because it doesn't take anything for me to promote it, I fill it organically. Very low time commitment there. The time commitment is on my calendar. If I look over the course of a year, I probably spend 25 days doing one-on-one coaching. One month of every 12 months is 100% dedicated to coaching if I were to squish all the time together but it's spread out over the year. I know that it's only 25 days for me to offer one-on-one throughout the course of the year but it brings in multiple six figures into my business. I have to think about that a little bit. I have to think about that.

I do have a more group leveraged program and I have to think about how much time that takes me. I spend at least an hour to three hours every week on my leveraged program, the CEO Collective where I do a Facebook Live, I show up and do live strategy, and support, responding to questions that pop in but it doesn't take me as much time and energy because it's designed to be more leveraged. It's a group offer versus a one-on-one level offer. My involvement is a little less because it's a more scalable offer. Then finally, I'm asking myself, is this offering truly in my wheelhouse? Is this in my business sweet spot? If it's not, how could I improve it? How could we improve the stress level of delivering this offer? The stress level of working one-on-one with people or delivering the CEO Accelerator, which I'm hoping to bring back in 2022 is really medium to low for me. It does take up a little more time. I'll say it's medium to low because I am naturally an introvert. Having too many days filled with too many calls will quickly flip that ratio for me and suddenly, it's high stress, that's why I don't have a 100% coaching only business because I need the downtime. I prefer only having one day a week dedicated to calls. That's how I keep it simple for myself.

If I was somebody who was an extrovert and could have a packed coaching day, talking to six to eight people a day and still keep moving, that would be fine but I'm not. I am the type of person who after a coaching day, I usually like to follow it with a low-key day, like today where I'm sitting here, recording podcast episodes for you. You have to know this about yourself. What feels good? What is going to be the low to medium stress? For me, this low to medium stress level means I limit how many coaching days I have, I limit how many clients I take on. If I'm running the CEO Accelerator, I limit how many people are in that container because I'm offering more of my time to them. Some people thrive one to one. They love talking to 20 to 30 people a week. It fills them with so much energy. They love it. They would not like working the way that I work. They crave that connection. They crave talking to people. If they had to work the way that I work, which is just one or two days where they're actually talking to other people, they would probably feel really frustrated with their business. They feel so disconnected. You have to know yourself. Know that what works for me might not work for you. You might crave having more interaction with more people and that's less stressful for you than sitting down and recording training, recording content, doing interviews. For me, recording things, creating things is my zone. I love doing that. Just having a handful of one-on-one, then the CEO Collective, that's the magic mix for me.

What do you do when your stress-to-dollar ratio is too high? When you're going through the process of looking at each of these offers, you're figuring out how much time does it take for you to sell it and deliver it? How much energy does it take? How stressful is it for you to sell and deliver that offer? How profitable is it? What's the percentage of revenue that offer brings in? You want to be thinking about how you can simplify things. If your stress-to-dollar ratio is too high, if you're looking at these numbers in this workbook, again, go download the workbook from the show notes. If you are feeling like the stress-to-dollar ratio is too high, maybe you're in that launch burnout cycle, maybe you're one failed launch away from having to drastically pivot your business. If you are starting to see the pressure you're putting onto yourself, then you need to shift things. If it's taking a lot of time, energy, and money to launch or promote and sell your offer, you might need to make sure you're building in more recovery time. You might need to increase the prices so that you can have more teams, so it doesn't feel so stressful for you, or you might need to re-evaluate the way that you are selling and delivering that offer.

Take yourself through these questions. If the stress to the dollar ratio is too high—which it might be and you might have some things that are working, and some things that need to be pruned away as we're going into the New Year—but if they're feeling too high, if you're feeling a little too stressed out, and you're thinking, “This offer, I don't know if it's really worth it at this point,” ask yourself, is it highly profitable? You want to keep the things that are super profitable. If the stress-to-dollar ratio is showing you that you're getting a great return on your investment of time and energy compared to the stress that you are taking on for it, then you might say, “Okay, I can keep it.” But you might need to evolve it. Should you evolve the offering? Do you love aspects of this particular offer? If you started looking at it, are there things you need to change in order to make it work for you better? Then what do we need to do to offer it? This is where we ask ourselves, “What is working, what isn't working about this offer?” What are two to three changes you could do, either in the marketing and sales or the delivery of that product, program, or service that could improve the stress-to-dollar ratio that could make it less stressful and more profitable?

Once I started to shift these things internally, I started to lean in again to my sweet spot, I started to lean into my strengths, things became so much easier. It could be that I need to increase the revenue, so I have enough profit there to pay people in order to take some of the load off of me. It could be a price increase. It could be that I need to take out some things on offer. Maybe it's requiring too much of your time and you need to pull back. Maybe you need to hire coaches to come into your offer and help deliver it. Maybe you need to put some systems and structure in place, so you're not feeling like you have to recreate the wheel. Maybe the sales strategy you've been using hasn't really been aligned and you need to strip it back to something that feels better, and is more effective. I want you to think about two to three things that you can implement in the next few months that would reduce the stress of each offer and increase the profitability.

If you haven't asked yourself the five questions we went through, again, it's in the workbook, you want to know what is the revenue of each offer, how profitable is each offer, how much time is involved, how much energy does it take, and how stressful is it? Go grab the workbook that I created for today's episode. As you go through each offering for these questions, you will get a really clear idea of what is and isn't working in your business. I encourage you to be radically honest with yourself because you might have something there that may be super profitable but you don't love delivering it or it doesn't really fit your personality. Maybe you're an introvert and you're finding yourself stretched way too thin with calls, and obligations and you need to figure out, “How can I make it work for me better?” These are the questions we need to ask ourselves before we go into planning for next year.

I hope this was helpful for you. Go reduce your stress-to-dollar ratio. I want to hear from you if this was helpful. As you're going through this workbook, what has stood out, what are the changes you think you're going to make going into next year, so your business can come from a place of ease and abundance. I want to hear from you, so make sure you are chatting with me over Instagram. Talk soon.