Most product-based business owners think they need something new to grow. A new strategy, a shiny tool, a game-changing idea. But the truth, you don't need more exciting. You need what actually works. Because the businesses that win on profit and cash flow, yeah, they've mastered the fundamentals. And this is exactly what we do inside the Inventory Genius program. We clean up your financials so that you have a clear, accurate picture of your inventory and your real margins. We fix your product mix, making sure every single SKU is actually making you money, not just creating revenue. And we build a profit plan so that you can pay off debt, generate cash, and run your business with confidence. No fluff, no guesswork, no chasing trends, just a proven system that helps product-based businesses win again when it comes to profit and it comes to cash. Because long-term success isn't flashy, it's consistent. Join us in the Inventory Genius program. Let's make your business work for you. Hey friend, welcome to the Inventory Genius podcast, where we work together here to make you an inventory genius. We talk about profit, we talk about cash flow, and we definitely talk about your paycheck. Because at the end of the day, it's all related to your inventory. Let's go. Hey there, welcome to the Inventory Genius Podcast. I'm your host, Sierra. You've probably heard this phrase, you have to spend money to make money. It's actually a phrase I don't really love because people don't think about what's behind the phrase. Here's what nobody adds to that sentence. You also have to know if the money you're spending is actually doing anything.

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What if we said it that way? You have to spend money to make money. However, you also need to know if the money you're spending is actually working. Most product-based business owners track ROI or return on investment on ads, but nothing else. Today we're changing that because the truth is every single dollar that leaves your business is an investment. Take that to the bank. Every single dollar that you spend in your business, every single dollar is an investment. And every investment deserves a return. Let's dig in. Okay, I'm gonna give you a couple scenarios here to make you think. Scenario number one, you hire a part-time employee to help with packing and fulfillment. Six months later, are you further ahead? Or do you just have more overhead? Scenario number two. You invest $800, let's say, in a product for photography session. Did it move the needle on conversion rates? Or did you just end up with a lot of beautiful pictures? Here's another one for you. You join a $2,000 coaching program. What did you actually get from it? Or one more, you pay a 1099 copywriter to write product descriptions for you. Did they help the products convert to sales better? Or did it do the exact same thing you did when you wrote them yourself? If you can't answer these questions, you're flying blind. And today we're going to fix that. So the first thing we're going to talk about is reframing return on investment or ROI. It's every dollar. It's not just the ad spend. Okay. So we're going to talk a lot about ROI as it relates to ad spend today because that's where we mostly think about it. But then I'm going to relate it to how you can wrap the ROI conversation and way of thinking into everything and every dollar you spend. So most founders are taught or shown to track ROI in the one place that we just mentioned marketing. Run an ad, measure the sales. But in a product-based business, money flows out in a dozen different directions, and all of it needs to be accounted for. Okay, so let's talk about this for a minute. I'm going to give you an illustration. And this is something in the IOGS program. There is a specific tool that I created to help you track and measure your return on investment. And the way that I teach it in IGOS is first we look at digital ad spend because this is the easiest thing for people to understand because it's what we typically think of when we think of ROI. And we we think of it when we think of digital ad spend because when we hire a marketing agency to run Facebook ads or Instagram ads, YouTube ads, et cetera, they are talking about ROAS or ROI. So they're saying, Sierra, you spent $1,000, you made $3,000 this week. Oh my word, you put in a dollar, you make three, let's do it all day long. However, like I mentioned, cash is flowing out in multiple directions for that $1,000 to $3,000 ratio. So let's say we take that exact example. I spend $1,000 on ads and I make $3,000 in sales as a direct result of those ads. But stop for a hot second. That $3,000 in sales or top-lane revenue has a cost of goods attached to it. Now, in a best case scenario for most of you, that's going to be a 50% margin. If you're working with me, I'm going to push you to a 60, 65 plus margin. But most of you are still running at about a 50% margin if you're lucky. That means if I make $3,000 in sales, the cost of the inventory that sold, that left my warehouse to bring that sales into the business at a 50% margin is $1,500. So now let's add those things up. I spent $1,000 in ads plus $1,500 just in the product. That's $2,500 of cost, and I made $3,000. There's even more numbers attached and cash flowing out of that $3,000. You have your ad agency fee. You have the pay the people who pick and pack the inventory. You have shipping in and out. At the end of the day, you could be spending $1,000 in digital ads, making $3,000 in sales, and actually paying to run yourself out of business, paying to push yourself into a deficit. This is why tracking an ROI at its most granular level on everything we do is so important. Okay, so I'm going to give you some different examples of places that we can track. Now that we know, okay, aha moment, there's more to an investment than just the raw investment itself. What else is attached to the sales outcome? Now that we understand that with the marketing example, I want to walk you through some different places that you could be tracking your ROI. And I want to give you some examples of how to do it. Okay, paid ads, we just talked about that one. Email marketing. What about the revenue per email spent in comparison to if your list is growing? What's the conversion rate? What are you paying to have somebody do those emails for you? Uh social media, don't just track followers and likes. What about link clicks or traffic to product pages or attributed revenue if possible? And then what are the costs associated with each of those things? The mistake that most people make is tracking vanity metrics instead of the actual profit metrics, right? And so that's what we're talking about here today, the return on investment. That's the profit at the end of the day, the profit or the loss. A viral post that brings 10,000 impressions and zero sales is not a win. A $500 ad that brings in $2,000 in revenue at a 60% margin is an absolute win. Let's talk about employees. Okay. This is one that makes a lot of people uncomfortable, but here's the thing: it's the one that costs product-based business owners usually the most money aside from inventory, and it's usually ignored. The cost of employees is usually ignored. Hiring feels like growth. It feels fancy. Trust me, I'm sitting behind the mic telling you I had a team of 12 people, but I did not track the return on their investment at all. I was investing in every single one of those 12 team members, and I wasn't tracking what my return was. Hiring without measuring output is like adding overhead, and that's it. It stops there. I'm just adding more expense. Employees now, they don't always generate direct revenue, but they should be generating something measurable. Okay. So time freed up for the owner. Maybe that's the ROI. That's what I measure and track with employee number one. It because I have them, it frees up time for me. And in turn, that extra free time allows me to know my numbers, measure and track ROI on things, improve processes in the system, be on the sales floor, make more money, right? Maybe it's faster production. Maybe I can sell more things or I have more available inventory to sell because I hire, which in turn, you know, ups the production rate. Maybe it allows for better quality. Maybe I can track capacity to scale. The question is whether or not it's actually happening, right? So we need to think about each and every one of our people and then attach some sort of way to measure and track the return on their investment. Okay, I want you to think about this real life example. A fulfillment employee costs me $1,500 a month. Okay. It frees the owner to focus on wholesale outreach. And so that wholesale outreach that I now have time for generates $4,000 a month in new accounts. That's a clear return on investment. Let me repeat that. So I hire someone who costs $1,500 a month. But because of the time they're putting in, it gives me back enough hours as an owner to generate $4,000 in revenue. So for the $1,500 spend on that person, I'm now generating $4,000 in new accounts. That's a clear and positive ROI. Here's another one. A $1,500 a month hire who isn't trained well makes frequent packing errors. They require the owner to double check things. That's a negative ROI on time and quality. So I could take that same $1,500 and I could invest it in a person. If I have a clear expectation of what I want to see as an ROI, I can either see that ROI happening or I can lose that money if I'm not measuring and tracking. Here's the hard truth of it. If you're not measuring employee output, you can't know if you're getting a return. If you don't have a way to measure and track, if you don't have clear KPIs around employees and what the expectation is, what their ROI expectation is, you're just hoping. Like you're not going to get a good return. So here would be a practical tool for you, kind of a side note here. You might say, that sounds interesting. I never thought of that. What do I do? How do I measure and track? I would create a simple weekly output log. What did each team member complete or contribute this week to the business? And then I would have you do a cost-benefit analysis. What is the cost of that person versus what the contribution of that person is? And it'll open your eyes. I think it's going to be very insightful. In fact, I think it's going to be so insightful that I would love for you to reach out to me and tell me what you see, what you've noticed, and the changes that you've made. Okay, let's talk about paid programs and coaching programs. Are you actually implementing them? What is your return on the investment? Product-based business owners a lot of times invest heavily in education. So coaching programs, masterminds, wholesale courses, you know, industry associations, right? You belong to an industry specific club. Here's the problem, though. Most people buy these things, invest in these things, sign up for these things, and then they implement like 20% of what they've learned. Then they buy another thing. It's not working. I buy another thing. And before you know it, your investment is so heavy into education, but you aren't seeing an ROI. And the ROI question for programs isn't did I learn something? It's did anything change in my business because of this? Learning is not a return. Okay. Can I just say that and scream it from the rooftops? Learning is not a return on your investment. Implementation is a return on your investment. Okay. Wholesale programs, retail courses. Did you take that information and actually pitch more accounts and increase revenue? How many of those accounts that you pitched converted? What was the average order value? These are ways you can measure and track your ROI. Coaching and masterminds. What decisions did you finally make that were different? What revenue did those decisions generate or protect? That is the ROI that you can track and measure. Hard example. Let's say you spend $997 for the IGOS program. It's an operating system. If you take it and implement it in your business and you make save or find $970 the first month because of new decisions you made and numbers you're focusing on and changes in the business, you're starting to see a return on that investment. All right. Think of that with every coaching program that you've been in or education platform that you invest in. What are you expecting for the return? Lifestyle and ultimate change and measurable and trackable results and positive outcomes in our business don't happen by chance. When you look around you and you see other product-based business owners who have the lifestyle that you desire, they have an efficient team, they have revenue and profit. That didn't just happen because they hit the jackpot and their return on investment just happens to be better than yours. No, that ROI that you're seeing in their business came because of intentional choices and in the fact that they have been tracking and measuring and expecting a return on investment of every single dollar when it's placed into something in their business. Okay, I want you to do this quick audit this month and for every month going forward, if you think of it. This is the three-question ROI audit. Okay, so whenever you think of something, an employee, a class, a mastermind, a new product, a subscription, a new piece of equipment in your business, a new brand of inventory, anything you take a business dollar and invest in, I want you to do an ROI audit on it frequently. And here's the three things I want you to ask. Number one, what did it cost me? Including time, not just money. Number two, what am I expecting or was I expecting from it? I want you to name a specific outcome. And number three, did I get that outcome? Yes, partially or not at all. And what will I do differently? And then act on it. Double down on what's working, fix or regenerate what's underperforming, and cut what's not producing. The most profitable product-based businesses are not the ones with the highest revenue. Sometimes, but not always and not usually. They're the ones with the fewest dollars going out the door that don't do a job that serve them. ROI tracking is how you make every single dollar work. And that's why I want you as a product-based business owner to start to expect a return on investment for every dollar you invest in any part of your business. Stop thinking about ROI just in the realm of marketing. Start thinking about it with the people that you have around you, with the products that you're selling, with the equipment and the tools that you're bringing into your business, with the education you're signing up for. And you can reverse engineer this as well. So you can not only look at what you've already got going on, you can say, what kind of return am I looking for over here? Maybe I want to get smarter with my finances. I want to produce profitability. When I produce a dollar, I want it to be a profitable one. What could I invest in that would give me that return? Right? I want to have Fridays and Saturdays off. What type of person could I invest in that would give that opportunity to me as a business owner? I want a 60% margin in my business. What kind of inventory could I invest in that would give me that return? I want you guys to reverse engineer it. I want you to think about what you want. What is the return you're looking for in every part of your business? Your time return, money return, um, implementation return. And then look for something that you can invest in that will give you that return. That is how smart operators operate. All right, thank you so much for joining me today. I will see you all next week. Bye for now. Hey there, friend. It's time for you to start winning at business again. I want you creating more profit and keeping more cash every single week in your business. Head on over to Sierrastockland.com, click on the programs tab, and you're going to see multiple ways that we can work together. Whether you're doing $50,000 a year or $50 million a year in top line revenue, there is a place for you. The Inventory Genius Framework has helped hundreds and thousands of product-based business owners just like you create more profit and keep more cash in their business. I want you to win. I want you to start taking a consistent paycheck, paying off that debt, and just feeling confident and comfortable when it comes to your numbers. You can do this. I believe in you and I'm here to help. Head on over to CRStockland.com or click on the link in the bio. Figure out where you might best fit. We are here to help you. Let's create more profit and keep more cash starting today.