Welcome back to the fourth article in our six-part series on the journey from First Sale to Full Freedom.
(We covered this model extensively back in the first installment of this series, so if you need a refresher, click here.)
In our last article, we:
- Talked about the Phase 2 of the journey in detail
- Examined exactly what you need to know to identify if you’re currently in this phase
- Showed you how you can successfully navigate to the next level (while avoiding the common pitfalls + obstacles that could prevent you from doing so)
As a reminder, here’s a graphic to show you what the journey looks like from start to finish:
In this article, we’re going to go deep on Phase 3 – Taking it Full-Time.
We’ll start off by examining the typical business profile of a brand in this phase of their evolution.
We’ll then move on to talk about:
- What your Core Focus should be at this point
- The Key Levers you should dial in on and the critical Mindset Principles you can focus on to achieve success as quickly as possible
- The Biggest Pitfalls you need to avoid and Powerful Success Strategies you can use to navigate around the obstacles you’ll encounter during this part of your journey
By the time you finish reading this article, you’ll have a clear understanding of how your brand can move from the start of this phase (generating “side hustle” levels of income) to the end (generating enough money to focus on it full-time).
Let’s get started!
Is This You?
If you’re in this phase of your journey, you probably:
- Generate steady income from your business (typically anywhere up to $10,000/month in topline revenue)
- Have a decent customer base + growing number of repeat buyers
- Prioritize one main growth channel/social media platform and pay less attention to others
- Struggle to balance running your business with the demands of your full-time occupation
This phase is characterized by growing pains…
But if you can make it through this part of the process successfully, the sky’s the limit.
Aspect #1 – Core Focus
At this stage of your journey, there’s only one thing you need to worry about:
Getting the business to full-time income levels as quickly as possible.
For our purposes, “full-time income” is whatever amount of money you need to make from your brand so you can focus completely on it.
To achieve your goal, you’ll have to start paying attention to stuff that didn’t matter too much in earlier phases (factors like profit margins, reorder rates, and more)…
But if you can navigate this phase successfully, your brand will soon be receiving rave reviews from your customers – just like Loox users Piper Lou:
Aspect #2 – Key Levers & Critical Mindset Principles
It’s not enough to just be clear on what you should prioritize. To ensure that you stay on track, you need actionable tools and reliable metrics you can use to keep making progress.
With that in mind, there are three Key Levers you should use to ensure you make progress – and three Critical Mindset Principles to help you get the most out of each.
Now, let’s focus on each in more detail.
Lever #1 – Net Margins
During the early stages of launching your brand, you didn’t have to think too much about profit.
Acquiring customers, increasing brand awareness and building trust with potential brand partners: these things were more important than making a few more dollars on each transaction.
But to go full-time, you need to start paying attention to how much money each sale makes you.
Critical Mindset Principle – Margins Matter
A solid ecommerce net margin is 5-15% for more established brands.
You could be over this in your early days, but don’t count on maintaining much above 15% profit in the long run unless you have a very dominant position in your space.
Focus on identifying and improving your margin without impacting the value you deliver to your buyers. You can do this through strategies like the following:
- Reduce operating costs (like unnecessary software licenses, warehouse space, or shipping + handling fees)
- Negotiate with suppliers to reduce product costs
- Increase AOV through smart upsells
- Increase prices to make more profit per sale
- Introduce referral programs to increase CLTV
Lever #2 – Target Income Percentage
If you plan to go full-time on your business, this is the single most important number you need to consider.
Once your brand becomes your main priority, you may not have time to pursue other sources of income as much as you did before.
With this in mind, it’s crucial that you figure out how much income you need from the business to be able to confidently commit to it.
Critical Mindset Principle – Balance Risk and Reward
Everyone’s personal income needs are different.
Run the numbers and figure out how much personal income you need to sustain a lifestyle you’re happy with. Then, look at your business. How close are you to generating that amount?
At an average net profit margin of 5-15%, here’s how much topline revenue you need to hit different income thresholds:
While you may be able to generate enough income from other sources to meet your needs, remember that business is volatile.
Whenever possible, it’s better to build a margin of safety into your targets than to stay too close to the edge.
Lever #3 – Repeat Buyers
The more people you can get your products into the hands of, the stronger the base you have to build your brand on.
This is still true. But now we want to go further.
The more you can sell to customers you’ve already acquired, the higher their CLTV will be – and the better your margins will be on each and every sale.
Critical Mindset Principle #3 – Go Deeper
The secret to turning once-off customers into repeat visitors to your store?
Make choices that show you value your relationship with them. Cultivate your connection. Reach out to them for feedback – and listen to what they say. Take the time to make your product as good as it can be.
“Our philosophy has been that most of the money we might ordinarily have spent on advertising should be invested in customer service, so that our customers will do the marketing for us through word of mouth.”
Tony Hsieh, CEO @ Zappos
Show that you care about them and they’ll do the same for you.
Aspect #3 – Biggest Pitfalls + Powerful Success Strategies
No two entrepreneurial journeys are exactly the same.
But as different as your story may be, there are a few pitfalls that you – just like most other ecommerce brands – will encounter along the way.
To help you navigate these obstacles, we’ll now:
- Profile them in detail (so you know what to watch out for), and
- Give you some high-value strategies you follow to stay on track for success
Here’s what’s up next:
☠️ Pitfall #1 – Leaping Too Soon
As you switch from side hustle to full-time focus, one of the biggest mistakes you can make is to move too soon.
Check out Shopify’s Success Stories and you’ll see plenty of entrepreneurs that went all in on their business right away and turned it into a huge success.
But for every brand with a heroic origin story like this, there are a hundred more you’ll never hear about because they flamed out before ever getting traction.
There’s never a “perfect” time to make a leap. But with a sufficient safety net, it’s a whole lot safer.
🚀 Powerful Success Strategy – Margin of Safety
Before you switch to focusing on your business full-time, we recommend you have a margin of safety to fall back on.
Depending on your risk tolerance and the specifics of your situation, generating 25% – 100% more than you need should provide enough buffer to commit.
Here’s what that looks like at various different income levels:
☠️ Pitfall #2 – Ignoring Important Channels
As a solo operator, you don’t have the bandwidth to do everything, so you need to pick your battles.
That said, there comes a point in every brand’s evolution where they need to diversify their growth channels.
If you’re getting ready to go full-time, that time is now.
🚀 Powerful Success Strategy – Syndicated Content
Don’t spread yourself too thin.
Take the content you’ve generated for your core platform (whatever that is) and consider how you can repurpose it for other channels.
IG Reels can become TikTok videos and Youtube Shorts. Facebook Ad creative can become Pinterest visuals or Google Ads copy. Articles can become email series.
And if you’re looking to create awesome visual content that you can easily repurpose across multiple platforms, check out Loox customer Replica Surfaces. Your photos will be in good hands with their top-quality product range:
☠️ Pitfall #3 – Attracting Competitors
As your business grows, there’s a good chance that you’ll attract competitive interest.
If you’re not prepared, these rival brands can take your market share and limit your potential.
Luckily, there’s a simple way to prevent competitive pressures from derailing your business. And there’s no time like the present to start doing it!
🚀 Powerful Success Strategy – Build Brand Equity
Generic products and generic providers are commodities.
The opposite is also true:
Unique products and unique businesses resist commoditization.
Unless you’re in a space with massive barriers to entry, you’re going to face competition at some point in your journey. So, start as you mean to continue.
Cultivate credibility in your market. Pick a unique brand position – and stick with it.
Don’t be afraid to march to the beat of your own drum.
If you can begin accumulating brand equity even at this early stage, you’ll be in a great position to weather any storms that come your way in the future.
John is passionate about helping brands build better relationships with the people they serve. He's also a content marketer with Loox.