3 hidden costs keeping you from achieving your goals

Hey there 👋

I spent Saturday at the Eudemonia Summit.

Thousands of people gathered in West Palm Beach to listen to Andrew Huberman, Bryan Johnson, Gabriell Lyons, and other experts provide insight into what it means to live and build a healthy life.

Also in attendance were nearly a hundred health and wellness brands exhibiting products and technologies that were said to help empower individuals to become the architects of their health and well-being.

Wandering through the Expo, I realized two things:

1. Preventative Health & Wellness is still very much an emerging market

2. Like in business, there’s a singular definition of “health” but there are many ways to achieve it

A business framework of “health”

You may not realize it, but you and your favorite brand probably have a lot in common: you both want to live long and prosper.

For brands, cash is the name of the game. To be healthy, brands need to build reserve cash and positive cash flow. But it’s more complicated than “sell more stuff”. Topline revenue is a vanity metric. While it looks good it doesn’t reflect the true health of the business.

That’s because selling products or services requires upfront work and cost.

Some of those costs include:

1. Discounts & Returns

2. Cost of Goods Sold and Delivery

3. Advertising

4. Operating expenses

All of these eat into a brand’s revenue. Here is an example:

Despite bringing in $100 in revenue, this brand is only left with $10 in profit. As a growth strategist, I would most likely make some recommendations on how they operate to improve overall profit, but 10% isn’t horrible.

Many companies, especially early on, put themselves into much worse situations by trying to drive topline revenue.

Here’s another example where a company optimizes towards topline revenue:

Despite bringing in more revenue, they spent more to attain. Leaving them with cash loss or what we call “burn”.

What does this have to do with your health?

More thank you think.

40% of Americans feel “spent” at the end of their day and 65% feel like they get “burnt out” each year. Over 50% of Americans are obese and the average person gains 2 pounds per year. Additionally, 1 in 6 people now struggle with depression and anxiety.

These aren’t “health” problems. They’re “profit” problems.

We are doing more (spending) in hopes of achieving more (revenue), but in reality, it’s eating away at their overall health (profit).

Many of us feel the need to do it all. We want to wake up early, journal, meditate or read scripture, walk and get morning sunlight, and delay coffee for 90 minutes after waking and that's just before we start work!

We over-exert ourselves to achieve “better health” but ultimately our extra efforts are doing more harm than good.

Sound familiar?

Maximizing your health “profit”

At the end of the day, we just want to feel better and stay healthy.

But this requires us to look at what we are doing to achieve better health and identify if those things are costing us more than they’re contributing. To help you identify what expenses might be robbing you of health, I want to talk about three cost creeps I see brands struggle with that eat into their profit.

1. Over-investing in paid advertising

Spending money on advertising creates more customers, but as you spend more, it gets more costly to acquire customers. As that cost rises you eat into more revenue per sale.

Brands that optimize towards topline revenue get trapped and spend more and more money on ads only to end up with less cash at the end of the month.

The recommendation: pull back spend levels.

The same recommendation applies to our health.

You don’t need to workout three times a day and take 25 different supplements. Find fitness activities you love and do them often. If you want to take supplements, stick with the basics or get blood work to find what you might actually be deficient in.

2. Reducing Operating Costs (OPEX)

As operating expenses grow, you shrink the possible profit you could achieve.

For example, if a brand receives $100 in revenue and the product costs $35 to make and ship but has a $50 operating cost, before advertising and discounts they only have the potential to make $15. This can significantly limit a business looking to grow.

The recommendation: reduce operating expenses.

But again, the same recommendation applies to our health.

When it comes to health, operating expenses are “life admin” - the things we need to do and the things we think we should do. One of the main reasons people say they don’t work out or eat healthy is because they’re busy and don’t have time.

Find ways to reduce your life admin and personal commitments. Don’t over-commit yourself and fill your schedule. Leave time to enjoy life and invest in your health.

3. Discounting their revenue too much.

Many businesses will wipe out 20-50% of their revenue by offering discounts on their product to incentivize sales.

The problem is that it’s almost impossible to run a healthy profitable business when you continually discount your products.

The recommendation: limit discounts to peak seasons or sales periods

Regarding our personal health, don’t diminish your efforts by cheating all the time.

We work so hard in the gym and on our diet, but then we don’t prioritize good sleep, eat junk over the weekend, and go out for drinks too often. Though seemingly small, these activities discount your efforts and might be the reason you can’t improve your health.

Don’t let your efforts return 60-80% because you're sabotaging value with poor habits and nutritional inputs.

One goal, different strategies

While they share similarities, brands and people are each uniquely different.

Strategies that work for one might not work for another. The goal is to think about maximizing the value of your efforts by reducing expenses or getting value from your positive health interventions or “revenue”.

For some, that might be reducing time commitments and “life admin” costs. For others, you might be in a busy season raising multiple kids or focused on paying off debt and you can’t reduce the stress or time commitment on life admin.

At the end of the day, it’s about finding the highest leverage opportunities, and reminding yourself you don’t need to do everything.