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Managing Cash Flows For Your Print-On-Demand Business




I want to talk a little bit about managing cash flow here, because you don't think about this. But I promise you, you'll think about it when you start to scale, because you'll be forced to think about it when you start to scale.

So I'm gonna see if I can draw some of this. So you have your bank account, right? That's a bank, know what banks look like, when they're represented on money and stuff like that. Anyways, that's a bank. Then you have your credit card, pretty good credit card. But you can also have somewhere in here, PayPal. So here's where things get really weird. You can scale, you can do what I did with very little money in the bank. I didn't have a huge bankroll to fund all of this. So you spend money on Facebook and you get sales from ShineOn, and then ShineOn pays you money back. This is basically how this works.

So what's going to happen is, you're gonna have $1,000 go out. And let's say you make $3000. But it's gonna take time, this doesn't matter. If you're selling on your Shopify store, or something else. This $3,000 you make does not come all the way back around instantly. It takes time before it shows up here again. So there's this period here, where you've got to be able to keep funding your scaling. Now, this gets particularly difficult if you're raising your budgets every day is if it's $1000 one day, and then $2000, and then $4000, $5000. Unless you have, you know, $30,000 sitting in the bank, it's going to be very hard to do this. This is a problem you're gonna be forced to figure out, I've been forced to figure out multiple times. So typically, what I do is, I get a credit card. Now, the benefits of having a credit card are more than one. First of all, you can get points, if you get a good credit card, you can get a credit card with points. Some of the credit cards will actually give you three x points for your spend on Facebook. Make sure you try to get one of those. Another reason that's good is because this can be converted to money. So it's more money in your pocket, the more you're spending on Facebook, it can help minimize losses, especially if you're testing, they're going to increase profits, as well.

So what I'll do is all get a credit card, we'll kind of insert it right here. Now, what I'm doing is I'm actually funding this whole endeavor with my credit card. The credit card will give me something like a 30 day float. That buys me time. As long as I don't hit the balance on my credit card, it buys me time or the credit limit, it buys me time and allows me to keep feeding the machine here. Eventually, as long as it can go, you know, something like two to five days, this money will start to find its way back to my bank account. Then I can start to pay off this credit card. Now, look, all of this probably seems manageable if you're still in this stage here. But I promise you the next few steps of my scaling method will screw up your cash flow.

The next two simple steps: $10,000 and $20,000. So, let's just do some quick math here. I'm going to need a calculator to figure out how much we just spent. So let's pretend each of these represent one day. You spent $1000 one day, $2000 the next day, you spend $4000 the next day, spend $5000 the next day. So, in the first four days, you spent $12,000 bucks. The next day you spend $10k. The next day you spend $20k. So in six days, you've now spent $42,000. So $42,000 is left that credit card and is somewhere in your machine. And if it's not finding its way back here fast enough, there's a good chance, unless you have a high credit card limit, that you're going to be tapping out your credit card. More money, more problems.

Now, the question is, how do you keep this machine running when all this is going on? Because if your credit limit taps out, you're screwed, right? Can't run ads, Facebook's wants some money.

So I've learned a few things. They don't totally solve the problem. Especially if you're starting out, and you just don't have the money in your bank account, but they help. So the first thing is try to stay on top of this. Recall your credit card company, ask for a limit increase. Be proactive about this. Don't wait to your limit to do it. The other thing is you can ask for a what they call it. It's like an emergency limit increase.

By the way guys, manage your finances, be responsible here. Don't put your family in jeopardy. You know, I'm sharing this information with you. I trust, you're going to do the right thing with it here. Don't gamble with this, okay? Only spend your money if you're making a profit. All right, that's very important only spend your money, if you're making profit. I never would have done this if I was not being profitable. I mean, you can screw up your life if you're not careful with this. So you want to try to make sure your limit is large on the credit card so that you can fund your scaling when you do find a profitable product. If you have money in your bank account, you don't have to worry about this so much. I still recommend funding these ads spends through the credit card, because you get these points here, and those points are more money in your pocket. So like even today, I have the money, I still fund my spend through the credit card, because then I get points.

The other thing you can do is set up PayPal. So inside a Facebook, you can have two payment methods, you have a primary and a backup. What I do is set my primary to a credit card, and then I'll send my backup to paypal. Now, inside of PayPal, you have a primary and a backup. And my primary is my paypal balance. My backup is my bank. So my whole goal in doing it this way is I'm just trying to keep the machine running,  because if you can just limp along for a day, it can make all the difference on whether or not you can continue to scale or not. Also, if for some reason my credit card maxes out, Facebook will go to paypal to get paid. And usually like if you're on a Shopify store, and people are buying through PayPal, you're gonna have a balance sitting in there that hasn't moved anywhere yet, unless you're like really on top of things, and Facebook and start to draw from that balance. Once that balance is empty, it'll go to your bank account. Now if all those wells are dry, then you're at the whole machine grinds to a halt, which kind of sucks, you're trying to avoid that, but that can happen. The other thing I would say is you probably want to reach out proactively to PayPal, once you start scaling, and just let them know "hey, just let me spend a ton of money, it's me, blah, blah, blah." Let them know in advance, because you definitely don't want them to shut this down. Because then you have more problems, you're gonna have to be dealing with PayPal shut downs. I'll also tell you, I've never scaled the big big numbers without having to be on the phone with my credit card company, it just happens. They see a ton of spend, it freaks them out. It's just something you're going to have to deal with no matter what. But these are some things I've kind of learned as best practice to help keep you out of hot water.

The other thing is at least the first time you scale. Facebook has limits. They put ceilings on your spend. Now, if I remember correctly, the first ceiling is at 50 bucks. The next ceiling is at 500. The next ceiling is at 5000. And I think the next one is 15,000. So basically, you're going to be able to spend two here and then they're gonna shut you off, or they're gonna let your ads set spin anymore. This is something you're just gonna have to deal with when you're new. My best advice is be proactively reaching out to them to try to increase this. I do know that they put quite a bit of AI in place here. So that if you're like a regular spender with them, they'll automatically increase your spending limits. I will tell you after my last conversation with Facebook at this level, they raised my spending limit to I have no clue how much I've never hit it since. But this is reality guys. You don't think about it. This is a whole other thing you've got to get figured out if you're going to scale to big numbers. And here's one of the interesting things about this is look, you will figure this out. Because the second you have a winning product and you're making money and one of your accounts gets shut down. Trust me, you can get really creative to figure out how to continue to fund your scaling.