- Hey friends, welcome back to the channel.
Today, we are talking about money once again.
Now I've been pretty open about
how much money this YouTube channel
and my business overall makes
because I'm a fan of transparency
and showing that if you put in the work for something
and stack up on fair advantages
at a healthy dose of luck, you can get to a point
where you've got a reasonably
high revenue generating business.
But one thing I haven't talked about in the past
is how much it actually costs to run this business.
So now at this point,
we actually have a team of,
I think, 11 or 12 people
who work for the business
as mostly full-time team members,
full-time employees.
We spend a tonne of money every month
on all sorts of different things.
And this is actually the first time
in the last four years
that I've actually added up all these numbers
let's now talk about
all the different ways
that this business haemorrhages cash.
The first expense on the list is actually food.
Now in the last few months,
I've been working from a cool working space called WeWork
and I often get team members to come to the site,
or if we're having chats with coaches
or contractors or freelancers or whatever,
we often meet up in person.
Now, at those times when we meet up in person,
I feel it's just kind of fair
to treat everyone to lunch
and if you're working late
to treat everyone to dinner as well.
And so for the last few months,
our food bill for the business
has actually been around $700 per month
in treating people to lunches and dinners and stuff.
So there's that.
Second on the list of costs.
We've got office space.
Now, like I said, for the last few months,
we've been working out of WeWork,
which is a fantastic coworking space.
They've got branches all over the world,
we use the branch in Cambridge.
And because me and Angus,
one of my team members,
we've got dedicated desks
that ends up costing us around $1,400 a month.
It's a roundabout $700 a month
for the dedicated desk.
I think it's 100% completely worth it.
And the amount of value we get
from having a coworking space
and having this really nice office set up
is just incredible.
And honestly, I can't imagine myself
ever going back to just fully working from home
and not having a coworking space
to be able to meet people in.
Third on the list we have fees.
And these are fees associated with payment processing.
So we process a large number of payments
for the business through companies like Stripe and PayPal,
especially when we're taking payments for our course,
the Part-Time YouTuber Academy.
And anytime time we take a payment
from someone else,
we're hit with some kind of credit card fees.
PayPal in particular is really annoying
because generally companies
and people pay us in US dollars.
And for that to be converted into British pounds,
there was like an like really extortionate,
like foreign exchange, transaction fee kind of thing.
And so overall we spend around $2,000 a month,
on bank, PayPal and Stripe fees,
just to be able to process payments
and to receive them in our home currency.
Next on the list, we have accounting fees.
Now this is all the stuff related
to all the various tax returns that we have to fill in
and keeping the books to date.
Recently, we've hit the threshold,
but a while ago we hit the threshold
for VAT, value added tax in the UK,
which means every quarter
we have to create a new tax return.
It's also a bit of a nightmare
because we sell digital products inside Europe,
every different country in the European union,
other than the UK.
Well sort of the UK as well.
Every single country in Europe
has a different rate for VAT
and we have to report that.
And therefore our accounting bill ends up being
around $2,200 per month,
just to keep on top of all the tax related stuff.
Next on the list, we have
computer hardware and camera gear.
Now always kind of seasonal,
let's say apple releases some new products
and therefore me being tech-nerd
I have to upgrade my Mac mini
and my MacBook and my iPad
and my other iPad and my iPhone and all this stuff.
Let's say Sony releases new cameras
and new lenses and I think, oh,
let's upgrade our production value
by adding a new light
or a camera or a lens or a microphone or whatever.
I've added this up.
It kind of varies
it's quite seasonal,
but overall it ends up being
around about $40,000 per year
that we're spending on this sort of stuff,
which comes out to,
was it around $3,000 per month
spent on hardware, camera gear and tech overall.
Again, all of these expenses
are very much worth it
because even a slight increase
in production value in our videos,
that then kind of pays dividends for the long term.
If I get a new laptop,
I spend 18 hours a day on my MacBook or My iPad
and so if I can get a device
that helps me be a little bit more efficient
than that will just easily pay for itself.
Next on the list we have subscriptions to software.
It actually takes a tonne of software to run this business.
And what is it, how many things we have on the list?
We've got Adobe, Ahrefs, Airtable,
Alamy, Amazon Prime, Calendly, Canvas, Circle.
CloudFare, DigitalOcean, ecamm,
FastSpring, Figma, Frame.io
freepik, Geniuslink, Google, G Suite, Hypefury,
IFTTT, Intercom, Kindle, loom, Otter.ai,
puddle, Patreon, Podio, Riverside, Scribd
short.io, Simple Poll, Subly,
Typeform, vidIQ, Xero and Zoom.
Those are all of the different apps
that we pay for
that I could see in our accounts.
There's probably more than I just haven't realised,
or I haven't reconciled the transactions
and this comes out to be $3,600 a month on software.
The biggest defenders here
are number one convert kit,
which is our email provider,
they cost around like $1000 a month by themselves,
but it's a very good service
we'd recommend link in to the video description
if you wanna check it out.
But the annoying thing about
any kind of email provider service
is that the more people you have on your email list,
the more money it costs per month to run the email list.
So we pay $1000 a month each for convert kit.
We also pay around $200 per month for Ahrefs
which is an SEO search engine optimization tool
that we use to make cool stuff on our website.
And then everything else is just
like death by a thousand cuts.
And so 3,600 spent on software every single month.
Next on the list we have freelancers.
So we work with two people in particular, Laura and Joe,
who helped us with the social media side of the business,
helping repurpose content
for all the different social platforms
and the fees that we pay Laura and Joe each month
comes out to around $4,500 a month
for all of social media stuff.
And there's a few other like freelancers here and there
that I'm including in that overall number.
So $4,500 a month on freelancers.
The next big expense we have is actually coaching.
Now I'm a big fan of improving,
like lifelong learning
and improving my skills and improving the team skills
and all the different things that we work on.
And so we have a pretty large number of coaches.
I think at the moment we've got around six coaches,
I've got like five, Angus has got one,
and we're also looking to hire more coaches
for other team members
who are doing important things within the business.
But overall, a monthly coaching belt at the moment
is around $6,000 a month.
And that is probably gonna increase
over the next few months
as we train more people up.
Again, totally worth it
like hiring a coach
for even if they charge
something like $500- 2000 an hour
is actually ROI positive return on investment positive
because if we can improve our own skills,
then that benefits the business as a whole.
Next, we have our penultimate expense,
which is all of the various fees
and contractor costs and affiliate costs
that we pay to run the Part-Time YouTuber Academy,
which is my six week live online course.
This year we've run three cohorts
and we're aiming to run four core cohorts a bit next year.
But every time we run one of these live cohorts,
it costs us around $80,000 in, you know,
paying like hiring people to help with the course,
hiring people to help with the data,
hiring our housemasters,
who are pro YouTubers
to run like coaching sessions for the students,
paying our affiliates,
we're helping to promote the course
and all the various software products
that help the Part-Time YouTuber Academy run.
So $80,000 a pop we've done three cohorts this year
which is 240K that it cost
to run the Part-Time YouTuber Academy
for three cohorts divided by 12
and that brings us to a monthly cost of $20,000 a month
to keep the Part-Time YouTuber Academy
ticking along for the whole year.
So now we have an overall cost of $43,400 a month,
and let's move on to the final nail in the coffin,
the biggest expense by far.
And that is the money that we pay our team members.
And so currently excluding me,
we've got 11 people who are part of the team
in various capacities.
Seven of those are full-time.
And so they work five days a week
or 40 hours a week or whatever,
but it's all fairly remote and flexibility
and so they can really work whenever they want.
And then we've got two people working
around four days a week.
We've got one guy working three days a week,
and we've got one guy working two days a week.
So that is like the spread of our team so far.
And if you guys are interested,
I'll certainly do a video,
explaining, you know, every time I mentioned this to people
that, oh, yeah, we've got 12 people in the team.
My last question is,
what the hell do these people do?
I was like, that's a good question,
like you could think that like, you know,
someone making YouTube videos
needs to have a team that big,
but you like,
you know, this team of 12 people including me,
this is still like nowhere near enough
to do the things that we actually want to do.
And so we're looking to hire around five more people
in the next few months.
And so this number is gonna swell up
and the salary number is gonna increase
hardly I'm not gonna share with you
the salaries of the individual team members,
'cause they would probably feel a bit weird about that,
even though I don't mind personally,
but I can tell you that overall
we're paying around $483,000 a year
in team members' salaries, excluding me,
which comes out to a monthly total of $41,000 a month
ish, that's spent on team members' salaries.
And so it costs an absolutely staggering
$84,400 a month
to keep this business ticking along
and hopefully growing.
That is absolutely insane.
I had no idea the number was gonna be that big.
And if you multiply that by 12,
what's that?
Damn, just over $1 million a year to run this business.
But yeah, I need to take a good hard look
at our finances and see
how we are haemorrhaging so much cash.
There's probably a few software subscriptions
that we need to cancel, but like, honestly,
if I think about that number
and I think about all the things
that we're doing in the business,
that actually doesn't seem so bad.
And so I'm hoping that our overall revenue this year
will be maybe in the region of around $3 million.
And if it costs a million dollars a year
to run the business,
that's like a pretty solid profit margin.
That's like 66% margins,
and then we have to take tax into account
and all that kind of stuff.
That's actually not too bad.
Apparently a lot of businesses
have like five, 10, 15% margins
and in this business we've got around 60 to 70% margin,
which is still pretty good.
But if my mom watches this video,
I bet she's gonna have a stroke
at thinking about that number.
Now this video has gone on long enough,
but it's actually supposed to be longer than this.
And the extended version of this video
is available over at Nebula.
If you haven't heard of Nebula
is an independent streaming platform
that's built by me and a bunch of other creators
in my agency called standard
who are absolutely wonderful.
And on Nebula, you get early ad free access
to all of our videos,
but you also get extended additions of the videos.
And so in the extended edition of this video,
this shpeel gets replaced
and I'm actually talking about
the four different steps for getting started.
And I talk through my journey
for being a YouTuber and building this business
and like the four actionable concrete steps
that it took to spend different money
at different levels of the business.
The reason stuff like that goes on Nebula
is because when we put stuff on YouTube,
we do have to be mindful of the algorithm
and a video can't be too long,
otherwise people are not gonna watch it
and all that kind of fun stuff.
But if you're interested in the topic,
you should definitely check this out over at Nebula.
Now, the easiest way to get access to Nebula
is to sign up to CuriosityStream.
We're very kindly sponsoring this video.
If you haven't heard of CuriosityStream
is the world's leading documentary streaming
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And so we've got a bundle deal with CuriosityStream
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So for less than $15 a year,
you get these incredible high quality documentaries
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where I take you behind the scenes
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If any of that sounds up your street,
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And then once you sign up for an account,
you'll have your Nebula details emailed to you.
If you liked this video
and you're intrigued about how we can possibly sustain
running a business that costs
a million dollars a year to run,
you might have to check out this video over here,
which is a breakdown
of how much money the business made in 2020,
which will give you some ideas
about how you could maybe do the same for yourself.
So thanks so much for watching.
Please do hit the subscribe button
and I'll see you in the next video, bye-bye.