You're listening to Cubicle to CEO episode 230. It's counterintuitive that letting go of your team and clients would increase your take home pay. But this case study on intentionally downsizing your business proves that can be true. Despite a high demand for her services, nonprofit fractional fundraiser consultant Cindy Wagman realized the business she was growing didn't actually align with the life she wanted to create. Cindy made a risky bet by letting go of all her employees and offboarding her existing clients, effectively slashing her annual revenue in half from $650,000 to $300,000. The result, she reduced her workload to only three and a half days a week while increasing her take home pay by $60,000 and growing yearly. In this case study we cover why the strategic downsize improved profitability how Cindy facilitated this transition of our team and clients and practical insights that will help any entrepreneurs seeking to better align their business finances with their personal goals.
Welcome to Cubicle to CEO the podcast where we ask successful founders and CEOs the business questions you can't google. I'm your host, Ellen Yin. Every Monday go behind the business and a case study style interview with a leading entrepreneur who shares one specific growth strategy they've tested in their own business exactly how they implemented it, and what the results and revenue were. You'll also hear financially transparent insights from my own journey bootstrapping our media company from a $300 freelance project into millions in revenue.
Hey friends, I am so excited to welcome Cindy to our show today. Cindy is a great I feel like add on episode to the one you all heard last week with Tania Bhattacharyya, we were just talking about how they're friends and this nonprofit sector is very much connected. But I think her story is one that we haven't really heard on the podcast before. And that is one of what do you do when you've hit all of your milestones of success? And you're continuing to grow? And you realize, wait a second, I don't know if continual growth from a revenue perspective is actually what I want. So you know, as entrepreneurs, we're always trying to move that goalposts like, Oh, when I hit my first six figure year when I hit half a million when I hit seven figures when I hit five 10 million, I mean, you could go on and on. But Cindy really took a radical approach in downsizing her business. So Cindy, welcome to our show.
Thanks so much for having me.
Cindy, you know that we always start out every interview with asking our guests what their Cubicle to CEO story. I don't know if you have a traditional one. But regardless, what was the catalyst that led you to entrepreneurship?
Hmm. So mine, I was working full time at a job at the University of Toronto, I was a fundraiser. And I had a pretty good job. I was Director of Development pretty senior. And I was on mat leave with my second child. And I had ambitions within the university. I wanted to move up, you know, I could see my future. But while I was on mat, leave an mentor of mine, we had coffee. And she said, I know this organization. They're looking for someone to run a capital campaign, which is the type of fundraising campaign, would you be interested? And I was like, no, but tell me about it. Anyways, they gave me this opportunity, but it didn't pay me enough. And I really was leaving behind a lot of benefits if I left.
So with my mentors coaching, I propositioned them. I said, Would you consider letting me do this as a consultant? And I asked for the money I wanted. I asked for the hours I wanted, I got to work from home all the things. And I asked for a two year contract. And they said yes. And that was like, wow, blew my mind. Because never, like I feel like we always kind of feel like we're begging for those jobs. And I was like, oh, no, I can create what I want. So that gave me a great runway and stability to leave my job to young kids at home and start consulting which I turned into this agency over a few years I had a small team. And we'll definitely talk about how I transitioned away from that.
Incredible Well, you know, that's the best realization is when you realize that you have a set of skills that can be monetized outside of a traditional job structure. That was kind of like a similar reckoning, if you will, that I had when I decided to fully pursue entrepreneurship. And it is interesting because I don't know if maybe you can relate to this end, but I feel like once you're on the other side as a business owner as an employer, you realize there actually is a lot of appeal for you to work with someone on a contract basis, because with employees, there's a lot of additional costs associated besides just their pay. Right?
Exactly. That's how I was able to negotiate more money than they had in budget, because they had about 25%, for benefits, taxes, all that kind of, you know, equipment, all the overhead, I said, save that does or don't say, Give it to me, to me directly. But now part of my business is actually connecting nonprofits with fractional fundraisers, because having a contractor for that type of position can be really beneficial. So I actually have built like a pretty profitable part of my business based on that premise.
I'm really excited to kind of understand what that structure looks like, because obviously, it's very different from the work that I do. But yes, to your point, I mean, considering all of the things that are involved with employee retention, and making sure that employees are well taken care of, not to even mention, like 401, K's or you know, retirement savings, all these vehicles, if you're listening to this, and maybe you're at more at the beginning of your entrepreneurship journey, and you see a really great job listing out there for a role that fits your skill sets perfectly. But you're trying to build a client base instead of getting another full time job. Don't be afraid to do what Cindy did. It never hurts to ask the company, would you be willing to consider hiring this as a contract role instead of a full time position.
So anyways, let's get into the case study because it's a good one. So Cindy's backstory is that in 2021, she intentionally shrunk and downsized her business from five full time staff members, to just a virtual assistant and herself. And this move actually reduced your revenue from 650,000 to $300,000. So over a 50%, revenue cut, but it increased Cindy's take home pay from 125,000 to $185,000. A year and growing. Not only that, I think perhaps the most impressive part of all of these changes is that you also simultaneously reduced your working hours from working about five and a half days a week to only three and a half days. So more or less cutting two full days off of your work week, which I'm just blown away by given that you downsize your team by so much. So I'm gonna start with an early hot take from you. You have stated before that gross revenue is the wrong metric to measure business growth by so I'd like for you to expand on your point of view there. And also what other vanity metrics were you chasing at that time? And how would you even define, I guess what you would consider a vanity metric.
Okay, I so distinctly remember, I have a friend who also runs a business and we would go for morning runs or walks. And we would talk about our plans to get to six figure businesses sorry, not six figure seven figure, we were well past six years, to get to that million dollar mark, we were like, that is the goal. I have a million dollar business. And over time, I started to think Well, wait a second, yes, I might have a million dollars in revenue, but I'm working harder. I'm working longer. I have all this other responsibility. And at the end of the day, what do I care about? I care about my money, right? I mean, obviously, there's other things I care about, I care about the success of other people and having an impact. But it's not as important how much money the business makes, if I'm not seeing that.
So we often call it our profit margin. You know, that, to me is a much greater measure of how well my business is serving my personal goals. And so I started to reframe, okay, how much money do I want to take home? What does that mean for me and my family? So that was one vanity metric that I let go of. And I would say vanity metrics generally are things that we like to focus on because they feel like accomplishments, right? They feel like a big deal. But there's someone else's big deal. Right? Or they're a big deal from the outside. Yes, I was really proud that I had an office downtown, with my five team members. Like that was the picture of success, right? I was like, anyone looking at me would be like, you've made it you're so successful. But it wasn't what I needed to measure.
Especially as you know, I have two, you know not so young anymore. They're like nine and 12 now, but like, I have two kids. My husband works a lot, especially during the beginning of the pandemic, we were working like crazy and I was like, This is not what I need for me right now. So what is good going to serve me, my family. And I always try and balance that with what is going to serve my community. So I never make decisions in isolation of like me, me, me, I always try to find the win win. And in my experience, there always is a great win win out there, we just don't think of it right off the top of the bat.
Yeah, and you know, it's really interesting what you're sharing about the difference between even if you own the business 100% equity, right, there is still a difference between personal wealth and the business valuation like sure the the more the business grows, the more it's worth, but if you don't necessarily have an exit strategy for the business, like you're not planning to sell the business per se, the business's value similar to like, the value of your home isn't really tangible until the moment of sale. And so I love that you brought up this point, because I do think there is such a big disconnect for a lot of entrepreneurs between the success of their business and their personal wealth. And I think even for myself, it was more of a recent understanding or journey to how am I really strategically not even, I mean, going even beyond profit margins, how am I strategically using the profit from the business to help fund some of my personal goals, and also support the business? So excellent reminder.
And I just want to add, another thing that I've worked really hard to overcome is that I looked at my success as a business owner as my personal value to the right. Often, like, I would say, I'm an ambitious person, high achiever. And so I would keep working towards these things again, because I was like, well, then I have value. Like, I'm successful, this is a reflection on me. And, yeah, like my success as a business owner is a value. But it's not the only thing. And it took me a really long time to understand. And that's the time piece to like working less, so that I could do more things with my family, and also just have things for myself that are not work. Like I always felt like I could spend all the time in the world working on my business, because I'm good at it. I like it. And you know what, I need to have other hobbies.
It's hard, it's hard when it does feel like a gain sometimes, or, you know, it brings a lot of personal fulfillment. I'm sure anyone listening to this podcast can really relate to what you just said. But you're right, it is such an important reminder that we separate our intrinsic value as human beings from our economic output or capacity, because those are, to your point, two completely different measures. And I also feel like one more thought to add on here, it kind of reminds me of a conversation I love having like philosophical debates with my, with my friends. And I remember actually, oddly enough, it was at my wedding, we kind of randomly started talking about like, during, you know, just like the downtime.
I was talking with my friend Haley about this concept of, well, it was kind of like an offshoot of nature versus nurture. But she was talking about how some things that we do are to feed our ego rather than to like honor our truest selves. And it's kind of like understanding, you know, like, what you said, is the vanity metric to feed my ego and how I'm perceived by others, or is it a true honoring of like, who I am at my core, and like what I want out of life? So anyways, I'm sure we could spend an entire an entire conversation on just this, this philosophical topic, but I'll get into the actual details of the case study. So Cindy, was there like a specific moment that spurred your intentional shrinking of your business? Or was it kind of a build up over time where you, you just had the realization, I'm not really moving in the path that I want to go?
I would say it was like, a combination of things that came together. So it was during COVID. I live in Toronto, Canada, our schools were shut down for the longest period in North America. Brutal. And I got to a place in the business where we had demand for our work, right, I had people wanting to work for us, and we didn't have capacity. In order for me to build capacity. I would need simultaneously to hire about three staff people and have about five clients confirm based on the business model that we had at the time, right. And that felt like a really big step, right? Like we think of growth as linear. Obviously, it's a lot messier than that, but this was like these really big steps of like, okay, huge amount of risk for that next level. And I just didn't want that risk. I didn't want to carry it.
And so I started playing around with the idea So my business model before, we did what I now call fractional fundraising, but we called it at the time done free fundraising. So we would, small organizations would hire my team, we'd come in, and we'd run their fundraising program for 12 plus months. And I would hire Junior fundraisers and supervise them to do the work. So Junior because it was a lower cost for me, and I could train them how I wanted them to work. And that was great profit margins. Eventually, I had a manager who did some supervision, but it worked in a lot of ways. But it just it felt heavy. And we didn't have capacity. And so I started saying, Okay, well, what if, instead of me hiring someone, Junior, what if I trained someone really senior and experienced, who wanted to deliver that service, and they would pay me a fee, basically a referral, right? I would get them fully booked, I would train them how to run the business. And they would pay me and I just match them with the clients. So I started playing around with that.
So it's kind of like, like a finder's fee mixed with almost like a franchise model, but not from the perspective of they're paying you I'm assuming they're not an ongoing percentage of you know, revenue or profits, but you are training them on like your operating system, if you will, right. Okay,
Exactly, At the beginning. I thought of franchise model actually as my example. Yeah, I was like, okay, legally, we weren't a franchise. But that was the idea, right? And at the same time, one of my staff people gave notice, and I was like, I don't want to replace her. She's so good. I got a great team. Yeah, I was like, I don't want to replace her. So I started really leaning into this new model. And I started to let go of some control. So before, when I started this model, I was like, Okay, I'm going to really carefully handpick the people who would be like, I'm going to call them franchisees, even though legally they they were not that, right. I'm gonna like handpick them, like, I'm hiring staff. And then they're not, I'm not going to take any money from them until I get them their clients. And I was really holding a lot of the responsibility, right.
But as I started to do more of this work, and see more and more organizations come to us, I said, Okay, this is scalable. And I'm going to release myself from some of the responsibility and obligations. And now I have a training program. It's a defined nine month program. It's called the fractional fundraiser Academy. And I am not responsible for finding them clients, I teach them how to find their own clients. And they go off and they do the work. So now it's modeled kind of after the storebrand certified guides,
I see Yes. Okay. I know what you're talking about. Not all of our listeners may. So just just for those who don't, story brand is a incredible content marketing company, I think based out of Nashville, founded by Donald Miller, love the book, Love the framework. If you've never read it, you should. But to Cindy's point, they train people like certify them through their framework. And then the story brand experts can go out and get clients kind of also similar now that I'm thinking about another brand people probably familiar with whether you love or hate them, but Dave Ramsey right, has a lot of like financial certified people under the Ramsey brand that have learned his framework for for debt free and financial management. So that makes a lot of sense.
I would love to get to the part about the staff, because I think that's the part that I'm most curious about when it comes to how you pulled this off. You had five full time staff, I understand, like, you've just said that one of them, you know, came to you with notice. So I guess you would have been down to four anyways. But How the heck did you comb through all of the tasks that they were doing and reabsorb those tasks between you and the VA when you let them go? And did you let them go all at once was like a slow kind of, you know, rollout, to talk us through how that whole process happened.
Okay, two of the staff people were doing work that was more technology and systems based. And I actually worked out with an HR person, like a severance package that included them basically being able to take over those contracts. Oh, okay. Yeah. So I was like, I don't want this in my business. It's not what I want to be known for. I as part of their severance. One of them got basically all of the IP that she had developed working with me because I was like, I have no interest. So I it was really, really hard firing people. Probably one of the hardest things I've done worst part about being an entrepreneur. Yeah. Especially people who I cared about out who I loved working with, and who puts so much of their own blood, sweat and tears into my company. And then I was firing them, I felt terrible.
But I really went, I tried to go above and beyond in setting them up for their own success. And actually, both of them consult now they've been very successful since then. Then the other two, were doing the fractional fundraiser work. And one of them I said, Why don't you be part of this network? Why don't we transition you, you can keep the client so I actually let go of all the clients,
Oh, wow.
And I said, You take these clients, you're gonna pay me this monthly fee to continue be part of this network, but you can manage it. So the manager who is on my team, she did that she took over, I think, two clients, or one and a half clients. And she started building her own business. On top of that, doing some other work, super successful, she's still involved in my network. She's also one of my backup coaches when I'm not available. Nice. And then the other name Sarah, Sarah, she was kind of wanting to just reassess and take a break. So she saw through the existing contracts that we were working with together, and then ended her contract with me or ended her employment. So it was a very gradual piece. And part of like, I offered her to be part of the fractional fundraisers in my network. I was like, if you want this, you're amazing, I'll find clients, but she really wanted to take time off. So you know, I always try to balance what's right for me, how can I do something that's good for them, too. And that's good for the client. So I didn't also leave the clients high and dry, they still got to work with the people they were working with, or I matched them with someone new.
Yeah, sounds like a true Win Win Win, which I know is like your approach to everything in business. I very much admire that. Just to clarify, I didn't know this piece that you had let go of all of your client contracts, either by offloading them to you know, the team members that were leaving, or just ending them at their natural end. Did that then reduce your revenue effectively to zero, I guess, or was there other income coming into the business?
So at that point, I had already started to play around with this new model. So I had some of that coming in. And then I launched like a really quick and dirty coaching program. I was like, hey, anyone interested, I filled that up. So I did have this other revenue. So I didn't, at any point, pay myself less than what I was making, which is great. But my overall revenue for the business definitely declined. So yeah, I had these people who were already now paying me monthly to be part of this fractional fundraising program. And I launched I remember that first launch with it's called impact on profit. And I was like, listen, there are no business coaches, for consultants who work with nonprofits. And I more than qualified to do this. So I'm gonna do this. And so I started that, and really quickly, like there was clearly a void in in the sector, for that kind of work. And so that's also been growing for me.
And that is separate from your fractional fundraiser network or the same, I just want to make sure
It's separate, there's sort of now have kind of two banner products, the fractional fundraising, network and impact nonprofit.
Okay, awesome. And then one more clarification question on the fractional fundraising network. So these people are being trained under your system, your framework for how to essentially deliver fractional fundraising services, like you used to do when you have the agency model. They're paying you a monthly fee once they're certified, or maybe certified isn't the right word. If there's not an official certification, but you get the point. Once they're fully trained, I guess in your model, do they then, I guess, graduate from your program similar to like a coaching program? Or do they continue to pay you a recurring monthly fee to stay part of your network? And if the latter, what is the I guess, what is the incentive for them to continue to stay?
Okay, so I'm also going to give numbers because we, transparency, thank you. So now, the fractional fundraising programs, the Academy, the training piece is nine months, it's $9,000 or $1,000 a month. With that they get the full training, it's like step by step templates, all the things and weekly office hours monthly Lunch and Learn Slack channel, and free referrals. So if I connect them with potential clients, it's like a gift. Yeah. When they're done those nine months, they absolutely can can continue to be part of the network, that's $350 a month. And they continue to get access to all the trainings and templates. So they would lose access, if they didn't continue. Oh, we also have a listing on our website, and all the other benefits. So the office hours a Slack channel, the Lunch and Learn the referrals, all of that. So my goal is to build a really nice stable base of these monthly, I love monthly revenue, almost all my programs are monthly, and they both of them have the opportunity to kind of maintain membership or an alumni status with a smaller monthly fee. And so yes, I definitely have that.
So smart. I'm obsessed with subscription based business models I'm actually reading I don't know if you've read it before, if you haven't, I bet you'd like it. It's a book called subscription playbook. And it is just a deep dive into subscription based businesses of all kinds. And I don't know, I find it so fascinating. There's so many different ways to approach a subscription based business. But the way you have your structured, very smart, I love the alumni model, because like you said, there's continuing value to being part of a community of people who understand the work that you're doing and to be connected to potential referrals and whatnot. So that makes a lot of sense. What types of tasks then do you do versus what your VA does? I would just like to better understand your current team structure of just you and one other person. What does that work divvying up look like? And is your VA a part time contractor? Or is this person a full time employee?
Right now, I have office hours for the fractional fundraisers, it's an hour week. And I support them on Slack. That's probably another hour to week. And then for impact and profit. I have office hours every other week for an hour. And I have slack there. So my client facing time is that it's not a lot, right? I have a podcast. So I interview people with my friend Jess. It's called Confessions with Justin Cindy. It's all about nonprofit consulting. So a number of hours a week we spend recording some weeks more than others.
My virtual assistant does all of the management of the podcast. So we just show up and record she manages with the editor, all the social media, I do actually now have a copywriter on contract, as well because I have a lot of writing that I do. So a lot of my time now is spent on content creation, launching. I am very much an iterative person. So last year I launched my fractional fundraiser Academy for the first time like really big this year I'm relaunching and so I'm looking at what can we do differently? How do I improve the program, impact and profit we're taking evergreen, so I'm doing a lot of content upgrading our delivery of materials and information. I do speaking I do webinars like all the things my my VA does a lot of the back end for that.
So I have a lot of videos that she's created over the last year of training videos, I'm re recording a bunch of them now. She will edit them she will take the raw video, make it look good have the animations and all this stuff like that. She schedules our emails, schedules, the podcast, and just sort of general stuff like that. And then as I said, I have a copywriter who does some of the more in depth copy that is really, I found it really hard to find someone who can get my tone. But I found someone who shoots amazing.
So wow, that's a unicorn. Gotta hang on.
Don't ever leave me don't get too busy. Like I was shocked. So as to finish answering the question. My VA She's based in the Philippines. So she's not an employee. I mean, I pay her full time. But I don't track her hours. And I've also referred other clients to her. Yeah, so I don't actually think she works full time but I don't care.
As long as the outcomes are there.
Exactly. She does the work. She does it on time but she does a great job and she's a pleasure to work with. And so very happy. And I also know and she knows that there are ebbs and flows. So there are times when things are busier. And there's a lot more work and then you know over the holidays I was like I'm offered two weeks take the two weeks like I don't change your pay or anything like that, in fact that you were a holiday bonus but it works out in the end.
I love that. I would love to know your take home pay, like we mentioned at the very beginning of this case study has increased year over year 185,000 and growing your revenue when you First made this downsizing decision decreased from 650,000 to 300,000. That was in 2021. We're now early 2024. So I don't know exactly when that change happened in 2021. But give or take almost three years have passed. Have you found that as your profit continues to grow, your take home pay continues to increase? Is your revenue changing at all? Or is it pretty much staying consistent at that $300,000 range.
So this past year, I think it's been consistent for about two years. And this year, I've spent quite a bit of money, a lot of investments, fame next year. And also, I've been learning to let go of a lot of things like I at first was looking at next year, and like, I have a list of, I think, five different new products I want to release. And then I was like, No, I'm going to do fractional fundraising. And I'm going to do impact and profit. So my goal for next year, hold on my overall revenue tool.
Real quick. Next year, when you're saying next year, you're referring to 2024
I mean, my fiscal year is April 1.
Oh, that that makes sense. Okay, thank you for that layer of contact continue.
So I'm still wrapping up this fiscal year. And next year, my fiscal year goal is about $375 to $400,000 in revenue, I want to pay myself at least $200. But realistically, $250. And then there's a bunch of other big investments in there so amazing.
To clarify, when you say you want to pay yourself $200 to $250,000. Take home, do you withdraw 100% of the profits? As in consider that as your take home pay? Or do you keep some of the money in the business, and you're looking at the 200 to 250k take home pay as it would technically need to be a little bit more, I guess, if the profit if some profit was kept in the business
Yes, this year, I'm keeping some profit in the business, mostly for cash flow, because I have this really big launch at the end of April, I just really am because all my revenue is monthly. So it's like a big injection spread out over time. So I do keep some profit in the business that's not included in the take home pay that I have, eventually, I will probably pay myself from that. But that is money that stays in business. Right? I will be paying myself that like to 250, which sounds ludicrous. You know, most people that's like a high tax bracket. They're like, you know, really do you need to pay yourself that money. Right now, I'm at a time in my life where yes, I'm gonna spend that money now, between the kids and their camps. And traveling, because traveling is one of the things that is really important to us. I mean, we have bathroom renovation that we need to do. So we will spend a good chunk of that now, which is crazy.
And I appreciate that honesty, I don't think it's crazy at all, actually, because I think so many of us have been trained by, I guess a typical career path that if we view retirement as an age instead of a work optional number that we set for ourselves, and that could be different for every single person, depending on your lifestyle, and your earnings and saving rate and all that. But I think because society, when you're thinking of traditional employees retire at a certain age in the US, typically 65 years old, so many people delay all living like the true living that they want to do until that age. But I think one of the most profound things I've learned over the last two years are really allowed to sink in is that when you're that age, your body physically can't experience life in the same way that it can maybe when you're in your 20s 30s 40s 50s and so delaying all gratification to the end of your life a It's not guarantee we all live to that age, sad as that may be and be, again, you don't know the circumstances of your life in that moment.
And as I mean, I'm not a mother, You are, your children are also in a different place in their lives, right. So you can't experience the same things with them that you could as they're growing up now. So anyways, all of this to say I really appreciate that you are honest, and not afraid to say I want to and I will pay myself this amount and I'm going to spend it and I'm going to spend it happily, and I'm not going to spend it with guilt. And these are the reasons why so I think that's really really refreshing to hear on on a podcast like this.
And I will say some of that money does so in Canada we have RRSPs there Take your 401 K's, some of that money goes into our RRSPs. Obviously, that's retirement, a good chunk of money goes into my kids education fund. So my goal is for them to do their undergrad degree, if that's what they want, free of debt, and a little. So one of the things my mom taught me is like, yeah, enjoy the things, but save, so that you can enjoy it. So for example, my mom, and my husband and I co contribute to trust accounts for the kids. And when I say trust account, we're not like millionaires, okay, she contributes 75 bucks a month, we contribute 75 bucks a month, per kid. And that month, I think she put a seed a couple $1,000 seed in there as well. But that money is for like, when they want to buy their first house, which is basically impossible in Toronto, for younger generations, they're gonna have that downpayment, or if they want an elaborate wedding, or honeymoon, or, you know, those kinds of bigger investments, we can put a little bit now and, you know, we know it grows and compounds.
And so my goal is for them to not sweat the important things, I'll never buy them a car, because I think that's a waste of money. If they want a car, they can work and save up for a car. But education, housing, those are things that we can contribute to end are prohibitively expensive for a lot of people. So that is also part of that take home pay, and there's savings vehicles we have for those things. And like, I want the nice things last summer, we did a three week trip, two weeks in Greece, and we visited family in Iceland and London on the way but we've rented like a private catamaran for a week. So cool with this give her like, I want the nice things too. So we're treating ourselves and one really quick story, a relative of my husband's was a really hard worker spent all her years like really amazing person. And shortly after retired, she got terminally ill and could not enjoy all the retirement plans she had it was sad. So yeah, I want to I want to live.
Yeah. And what a gift to be able to invest in the people you love your children in your case and provide for their futures. I think there's absolutely nothing wrong with elevating the, I guess the the basement floor, if you will, for your children and for the people that you care about. So I couldn't agree more. And also realizing everyone's priorities look quite different. And so if you're listening to this podcast, and you can't necessarily relate to Cindy's aspirations, or or the season of life that she's in, that's totally fine. But thinking through, like, what are the things that are important to you, whether it is trying to accelerate your financial independence to younger years, or whether you're totally fine working until a normal retirement age, and then kind of getting to have more freedom with how you spend your money and not having to so aggressively invest in retirement vehicles and whatnot. So there's so many different ways, I think, to approach finances. And that's why I could nerd out about personal finances all day, even though this is not a personal finances podcast. So, you know, we'll keep that kind of there. But I just I do think these types of conversations are important to have. So I appreciate you, you know, again, sharing your own perspective on this.
And speaking of numbers, and getting back to that the profit piece is another element that I'm curious about how you're managing this. So your take home pay increased by almost $60,000. And as you said, it's growing. So I want to know, what impacted your profit margin the most was it simply the reduction in labor costs of no longer having to employ five staff members that contributed the most to this increase in profit margin? Or was there another factor at play that really contributed to this increase in take home pay?
That is a great question. I think it was the sort of combination of reducing those significant costs. But really, it was scaling, right? So looking at how do I create, like really scalable programs, where again, I can show up for an hour a week, an hour and a half a week and serve 25 people, 50 people, hopefully, more than that in the future. That is, I think the biggest piece and really refining those so that they're exceptional. I'm such a huge believer in word of mouth, and referrals. And in my sector, I'm very aware as well of kind of owning a space And so getting out ahead of other people, like I have, like the fractional fundraising network, I fractional fundraising.co. I have like all the girls like, I want my network to be the Kleenex of facial tissues, if anyone's like, oh, we need a fractional fundraiser, I want them to think of my network. I want that to be synonymous. And so I'm very committed to making sure it's as amazing as possible. And people have the best experience and just want more and more of their peers to join.
Yeah, I think it's so funny. These points you're bringing up they keep like harkening back to that book that I'm reading that I just mentioned, a subscription playbook, because in that book, they also mentioned, what does it mean to become, like you said, synonymous with a category, like, people think of copy machines as zero, they just say, Oh, can you Xerox this, it's like, become a verb, even though that's just one brand. Or another one they mentioned was post it notes like, No, you say, oh, write it on a post it note, even if it's like a generic brand sticky note, that's not necessarily a post it note. So I think that's really, really smart. Do you aim for a certain percentage increase in your profit margins? And or a certain increase in the increment? Like an incremental increase of your profit amount, I guess, in total dollars year over year? Is that an important success metric for you? Or are you not necessarily hyper focused on seeing that linear growth and profit?
Yeah, I was gonna not hyper focus on that. The way I look at my numbers, I have a spreadsheet month by month for the whole year, revenue, all the expenses. I always I'm a huge fan of profit first by Mike Michalowicz. So I always have the profit that, you know, money goes there every month. But what I look at is, you know, in terms of pricing, what is like I look at all the factors. So what are people willing to pay? What's the value? How does that sit within the market? And what do I think the market compare? My niche is super, super small. So my goals, I think, this coming year are modest, but ambitious. And so I, and I'm sure there's a lot of flaws in this, like, I'm sure if I really wanted to, I could probably double on my pricing or double my goals of number of people.
But I also like to be very conservative when it comes to money. So I have all those factors in play, I also look at the investments that I want to make. So this coming year, I want to be more present in some conferences. So I'm really excited. We have a fractional fundraising booth at this really big fundraising conference, though. It's gonna be amazing. Yeah, it's gonna be really fun. And honestly, most of the booths at these conferences are so boring and dry. Yes.
Stand out with any amount of design or creativity. Yeah.
I will tell you because I'm really excited. So it was inspired by the movie Marie Antoinette by Sofia Coppola, okay, of that, like opulence. Yeah. And the marketing idea behind the network is you can have your cake and eat it too. So you can be a small organization and hire a really skilled fundraiser, or you can be an experienced fundraiser. And you can get out of your nine to five and have a really profitable easeful consultancy. And so we are creating this like French looking booth with like a loveseat. And French furniture and like ostrich feathers. And we are serving a ton of cupcakes, like a ton cupcakes and macarons. And like beautiful ones is going to be beautiful and luscious. And so, so great. And a lot of the members of my current network are going to staff it so they can talk about their experience. And how amazing has been for them is that was a total tangent. But those are the kinds of investments I'm making this year.
I love that tangent. I can't wait to see this booth. I'm so into booth design. I've been to dozens and dozens and dozens of trade shows over my years of entrepreneurship. And it is one of my favorite things to scope out like creative displays. And we have a really great actually past episode on the podcast with the founders of mustard made. They're these like gorgeous locker designs and they talk about how they really leveraged trade shows to basically kickstart their business and get you know hundreds 1000s of dollars in orders, and also the creative ways that they would set up their booth. So you might be interested in that.
I think I listened to that.
Did you Okay, yeah. Okay. Well, if you're listening to the pod and you haven't listened to that one, we'll make sure to link it in the show notes. But yeah, in person events are so underrated, I think in terms of how you can show up to them, at least for many people in the online business space, because there is that kind of just like, oh, you know, we're to spread our, our tablecloth and like hand out cards or whatnot. But you can be so much more creative than that. And that is super, super unique. I've never heard of anyone doing something like that, like a Marie Antoinette inspired event. So I can't wait to see the photos when they come out.
I do want to answer another hot take here asking you Do you feel that profit can also become a vanity metric? And let me give a little context that question, what I mean by that is, to me, I'm I've always been the stance that profit margins, in many ways are a direct reflection of priorities and what people value investing in, in that moment in time in their business, right. They can also be, in some ways artificially manipulated. So if you, not you directly, but the royal you, if you are sacrificing certain opportunities, like tax savings, like I'm just thinking at the end of last year, in 2023, we prepaid a ton of our expenses for 2024, which effectively decreased our profit margin by you know, 10s of 1000s of dollars, could we waited to pay that money and artificially had a higher profit margin to report for 2023?
Yes, but then we would have missed out on the opportunity to reduce our tax liability, which financially wouldn't really make sense. In the same vein, taking risks or investing heavily, whether it's in a trade show, like what you're doing, or in hiring, like a full time team member are also risks that will effectively reduce profit margin. And so I'm just curious, do you find yourself ever wondering, oh, could I fall into that same trap of looking at profit margin as a vanity metric that I want to just expand, even if it means sacrificing opportunities?
Yes, maybe? I mean, I, I do the same thing in terms of at my year end, I prepay all the things or like, spend a little extra on things that I was thinking about to reduce my overall profit on the books. And I think that this also kind of a weird thing, which is like, money and cash flow is not the same as what's on our books. Yes. And so it's kind of this weird, which is why I often look at what I take home, is this money I'm going to spend, like, that is money for me and my priorities. And so, yes, I mean, at the end of the day, could I probably even just work a little bit more hours and make more money for the business and invest in other things, and again, increase the overall revenue? Yes. And that's why I'm sort of constantly weighing, like, well, what's important to me right now, what is the thing?
It might not be profit margin for me in the future. And I say this to my coaching clients all the time. Like we people are really afraid to make decisions because they don't want to get trapped in that same decision in the future, right. And so they think if I subcontract now, like, if I have subcontractors, I'm only going to have subcontractors and I have to build a business that will sustain subcontractors. No, you can play you I am the case of like, you can change your mind. And things can change. And the cost of that change. For me.
Really the hardest part, as I said before, was firing people. Everything else is just been like, amazing. So it's okay to shift focus over time. And I think continuing to ask yourself, like, what are my ambitions right now? What's important to me right now? Is that the same as what's important to the company? Obviously, if what's important to me is building a team. Then those priorities shift. I when I did have a team, I would spend a lot of time and energy and money on treating my team really well. You know, benefits, bonuses, gifts to your treats, like all that kind of stuff. So I definitely think profit margin is not the only metric. Yeah, and I think your metrics and what's important can change over time.
Great, take love that take along those same lines. I'm just curious personally. Do you see yourself scaling beyond you and your VA and your writing contractor in the I say near future, but I can't Have mean, like in the next five to 10 years? Or do you feel kind of at peace with the fact that if you don't that, theoretically, there could be a potential ceiling at some point of a revenue or a, I guess profit margin that you can scale to without having to increase capacity? What camp Do you find yourself falling in at this moment in time?
So right now, I'm pretty happy with the team size we are, I think we can probably get to, I think we could make significantly more money. So that's how I see it. But things change, yes. If this is one of my like, I reserve the right to change my mind. And part of why I change things over time, is because when I do things I learn, and then I have more information, more data, different information to make new decisions. So to me, I actually don't typically plan 5-10 years ahead, because I know and I like change, a lot of people don't like change, but I know I'm not going to be the same person then. And so why stress about future means decisions, when I know that I will be in a very different position, making those decisions
Such wisdom to wrap up our case study together. Cindy, I wanted to touch on what you mentioned, when you were submitting your case study for consideration, you said a key factor to your success and being able to downsize your business and increase your profit margin and also reduce your working hours, was saying no to things. And that strategically, then allowed you to have the time and space to grow the business that you have today. I would really love to hear some tangible examples of things that you have said no to either things you say no to consistently or things that you feel like a particular No, really had, like widespread ripple effects, you know, potentially years down the line. What are your thoughts?
Yeah. So the first one that I think was the most significant, maybe isn't a hard No, but it was a letting go. So to me say no is very much a process of leaving things behind. And the biggest thing I left behind was the feeling of responsibility for everyone's success, and owning it. And so that's when the big shift went for me like, you don't pay me until I find your clients to be like, No, I have a valuable product and training program, and you're gonna pay me. And at the end of the day, I can't be responsible for your success. I've done what I can, and you're in control of the rest. That was the biggest letting go for me, by far.
And then the other thing, and this is hard, because I do like change. And I like building things. And you know, all that is like, this year right now, I am saying no to like four products I want to create, to like all these different ideas that I have. And I'm going all in in optimizing what I currently have, because I know there's so much more potential. So I literally have names for the products and price points. And I'm saying no to them. They're going in parking lot, maybe forever. And that's the other big NO is like, optimize what I have really benefit from being known for those things.
Isn't that the hardest? I feel like that like as an idea machine. I feel like tabling ideas is so so painful, but essential, like you said to actually create meaningful momentum towards any important priority. And I feel like the timing of our conversation really resonates with me because I actually just recorded a bonus episode for our private podcast that is only accessible to our C-Suite members. And it's all about how instead of resolutions or word of the year or a goal for 2024, I instead decided to create a set of five guidelines that kind of helped me filter decisions for business. And most of the guidelines are about defining when it's a clear No. And even in recording that episode, and trying to process through that I've realized, Oh, I see now where there were so many, I guess potential opportunities to slip up in the past like why it was so easy for me to override my own no and go for the Yes, because I can I can start to see those patterns emerge as I was, you know, creating these guidelines and then sharing these guidelines with our members. So, all I'm saying is I can really relate to what you are saying.
And I also commend you for sticking to your, to your focus on on improving the two products that you already have. I'm sure many of our listeners can benefit from getting that reminder today as well. Cindy, thank you so much for sharing honestly. And for being so transparent with your numbers. You know how much we value that here on our show? Where can our listeners continue to connect with you? Or utilize your amazing programs if they're in the space that you serve?
Mm hmm. Well, first of all, it's been my pleasure. As you know, I'm a huge fan of the podcast and avid listener and member of the C-Suite. So I will be able to listen to that episode. So the best place to find me online is Cindywagman.com. And I have a free webinar. The three mistakes I see nonprofit consultants make the most in their first three years of business and how to avoid them to access that go to Cindywagman.com/Ellen.
Amazing. We'll make sure to drop that link for you below in the show notes. So click over send Cindy a message. Hello if you learn something new today if you were inspired by her story of downsizing and Cindy, thank you again for joining us.
Thanks for having me.
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