I remember watching Oprah one day many years ago, and she had Maya Angelou on as a guest. As a former Women’s Studies major, I was all about watching that episode! One of the biggest take-aways was her calming reassurance that, “When you know better, you do better.”
As business owners, we make mistakes (and plenty of them!). We tend to lean on our own understanding, bootstrap our businesses from freebies and YouTube videos, and copy what we see others doing in their businesses. ‘Start before you’re ready’ and ‘fail forward’ are the mantras we hear repeated over and over, and so we do our best.
But what if you could do better in your business?
What is the Biggest Mistake Small Business Owners Make?
One of the biggest mistakes I tend to see small business owners make is getting trapped in the idea of trading hours for dollars. Sure, it’s the easiest way to start, and it’s what our society has us conditioned to think: you show up for work a set number of hours and receive a paycheck for those hours in the end. And repeat.
The problem becomes it’s challenging to grow and scale a profitable business this way. Sure, you can raise your hourly rate as you get experience, you can take on more clients, you can hire subcontractors and build a team or an agency. But at some point, there is only so much you can stretch.
Maybe you start selling your knowledge by creating courses and move into a one to many model, versus a one to one service. Here, again, you are taking your time to create the product, stay visible, promote the launch, and stay relevant to your audience.
How can you continue to grow and scale without always trading your time?
Aren’t you in business to work less and not more?
You need more avenues of cash flow into your business, without them being dependent on the number of hours you are putting in.
What Cash Flow Means
Cash flow is the money coming in and out of your business. Money can come into your business through different channels: services provided, products sold, investments made, assets, and commissions or other earnings that add positive value.
Money is paid out of your business through things such as operating expenses, taxes, and depreciation.
Why Cash Flow Matters
Cash flow matters because you are in business to make money. Otherwise, why are you doing it? Your income must exceed your expenses.
Each month as you are balancing your spreadsheet, be diligent about the money you are paying yourself, your operating expenses, taxes, and profit. In his book, Profit First, author Mike Michalowicz recommends an owner share of 50%, operating expenses of no more than 30%, 15% set aside for taxes, and then 5% for profit aka fun money!
Need more owner salary and profit? Then you need to look at ways to bring more money into your business.
3 Ways Affiliate Marketing Improves Cash Flow
We already talked about time being a finite resource. There is only so much of you to go around. Increasing the number of hours you work, whether that’s providing 1:1 services, promoting product launches, or staying relevant to your audience, is going to be limited.
In my blog post, The #1 Secret The Most Profitable Small Businesses Know That You Don’t, I shared how affiliate marketing is a way you can receive additional income from another business by referring to their product or service.
More Money Coming In
The commissions earned through affiliate marketing can come in the form of credits on future services (you might be familiar with how Trello does this when you refer a friend and get bumped up to Gold level for a month), gift cards (like Tailwind where you can receive a $25 Amazon gift card for referring five people to the Plus program), or in actual cash commissions. Whatever the form of compensation, these are all recorded on the asset side of your monthly balance sheet in your business.
You might not get rich with premium app features and gift cards this way. Still, the cash commissions could become significant when sharing the right products and services with the right audience over some time. And that can mean more owner’s share and profit for you.
Minimal Overhead Costs
Since you are a third party in affiliate marketing, you have minimal overhead costs. You are not providing the service or product directly; you are referring to someone else, kind of like a middle-man.
There will be some initial set-up time and cost in creating your affiliate map: deciding which programs best align with you and your audience, educating yourself on legal information, setting up links correctly, and in sharing the product or service with your audience.
Continue to Generate Income Whether You Work or Not
Affiliate marketing is considered passive income, and it’s money earned regularly with little or no effort on the part of the person receiving it.
You can receive income when your audience purchases from links you place within your posts, emails, or social media. You’ve already done the work on the front end. Once online, it lives forever (especially with Pinterest, and if you need support on a strategy, I do offer those services HERE).
Exactly What is Affiliate Marketing?
Affiliate marketing sounds overwhelming, but trust me, it’s easier than it seems. I shared in The #1 Secret The Most Profitable Small Businesses Know That You Don’t that affiliate marketing is just a form of passive income from another business as their way of saying thanks for referring their product or service.
When I first heard about it, I thought it was too good to be true. I share things I love all the time from recipes, sales at Target, vacation tips, productivity hacks in my business. They are all things I would do anyway simply because I am happy, and I want my friends to have the same great experiences I am.
How You Can Learn to Implement the BEST Affiliate Marketing Opportunity Quickly and Easily
While sharing what you love is super easy, there are some things to learn about the right and wrong way to do it. I enrolled in April Lewis’ program, Master Affiliate Group Marketing, and it was one of the best decisions I made.
I felt so supported like she was my Maya Angelou telling me how to know better and do better (okay, so that’s an exaggeration, but kind of). She did teach me the exact steps of how I can make passive income each month. And not a $25 gift card or a few cents commission on a product purchase.
But $2,000 every month. Consistently.
And while I don’t know about you and your family, I can say for my household, this is significant.
In her course, April lays out the steps to map out an entire affiliate marketing plan that works for me in my business. Not sure what products to recommend? Uncertain about legal disclaimers that need to be included? Overwhelmed about how to record income and taxes each month? Considering creating an affiliate program of your own to set up for other businesses to refer your services?
Because the course is established, she knows the questions students are going to ask, and she provides the answers before you know you need them.
You can learn more about April’s course, Master Affiliate Group Marketing, and hear from other profitable business owners like you who have learned a variety of ways to make money with affiliate marketing.
I can’t wait to see you in the private Facebook group.