238 | Your Podcast Costs More Than You Think (Here's How Much)

Your podcast is a money pit and it may be worse than you think. If you're a business owner who has a podcast that isn't growing a ton, you might think that your show isn't costing you that much. But with what I'm about to show you, what you're going to see is that the amount of money your podcast is secretly costing you is shocking. And my hope for you is that after this, you're going to be able to see the truth. The real data behind what your podcast costs your business. And hopefully with that data, you'll be able to make better decisions for your podcast and your business. This is Grow the Show, the podcast that grows your podcast. My name is Kev Michael. I am your podcast growth coach. And I've spent the last six years helping more than 500 business owners grow and monetize their shows. And in this episode, I'm going to walk you through a simple exercise that's going to help you figure out exactly how much your podcast is really costing you. Once we know what the monthly bleed is, we're going to talk about how to fix it. And we'll talk about what to do if you want your podcast to actually be making you money instead. Let's dive in. So I was at a mastermind recently and I was speaking to this entrepreneur and this entrepreneur sounds like a lot of entrepreneurs that I speak with who don't have podcast growth. And so if you're an entrepreneur and your podcast isn't growing, you might sound like this. So this guy came onto me and he said, oh, what do you do? And I said, oh, I help entrepreneurs grow their podcast, turn it into a client generating machine and help them monetize. And he said, oh, cool. That's cool. I have a podcast. I said, oh, awesome. When did you launch it? And he said, oh, I've been doing it for about a year. And I said, cool, how's it doing? And he's like, well, you know, I don't know. We get like 50 to 100 downloads or views per episode. It's fine. And I'm like, really? That's a shame. Tongue and cheek. I was like, ah, you know what I call that? The friends and family zone. He was like, what do you mean? I'm like, when you're at those numbers, that usually means that it's just friends and family and people who know you personally who are listening to the show. Because people don't get stuck at 300, 400, 500. Once they get past 200, they start to grow. But the problem is they don't know how to get strangers to tune into their show and keep tuning in and stick around. And he said, oh, that's really interesting. He said, I'll have to figure that out sometime. And I'm like, why not figure it out now? I mean, you're spending all this time and money and energy on it. And I think he kind of detected I was about to pitch him, which I never do that at masterminds. It's actually a bit of a no-no to just hard-pitched people at masterminds. So I wasn't going to do that. But he started posturing. And he was like, yeah, I don't know. I don't think that investing in the podcast is really a priority right now. And I was like, well, you're already investing in the podcast. And he said, no, no, not really. And I said, let me ask you this. Rehuman me for a second. How much is your business doing per month? And he said, we're doing 100K. So he's doing 100K in revenue per month. I said, OK, now how much do you think your podcast is losing you? He's like, oh, my podcast isn't losing me anything. I said, OK, is your podcast making you money? He said, oh, definitely not. And he said, occasionally sometimes someone joins my program who says they listen to the show, but other than that, it's really not doing much. I'm like, OK, so your podcast is definitely not generating any revenue. But do you understand that your podcast is losing you potentially $20,000 a month? And he was like, whoa, what are you talking about? No, it's not. He's like, I only spent a couple thousand per month. I said, ah, not true. And I said, do I have permission to walk you through an exercise real quick that's going to show you how much your podcast is costing you? You don't have to buy for me afterwards, but I just want you to realize this so that you can make good decisions for your business, which is why you're here in the mastermind. Are you down? And he softened and he was like, ah, totally man. Yeah, all right, what do you got? I said, OK, most entrepreneurs think that growing their podcast is not a priority because the podcast is not making money. So they should focus their time on growing the things that are already making them money. But what they forget to consider is that they are already spending time, money, and energy on the podcast. And until you actually add all of that up and assign a dollar amount to it, you really don't realize how much you're losing by spending time on a podcast that's not growing. So this is how you step through this. This is how you understand how much your podcast is costing you. You need a couple of things. So first of all, the obvious one is you need to add up all of the software that you're paying for. So if you are like most entrepreneurs and podcasters, you pay for stuff like maybe Riverside. So Riverside's like 25 bucks a month. You might be paying for hosting. So it might be Libsyn, Buzzsprout, Megafone, something like that. And so you're paying for your host, which is usually going to be about $25 a month. Many of you are paying for one or more AI tools to help you with promo, whether it's Opus or Cap Show or even Chatchy PT. So a lot of people are spending around $50 a month or more on AI tools. And to save you time, I recently surveyed my audience and found that most podcasters are spending about $200 to $400 a month on just software alone. So that's the start and that's the obvious one. And he said, yeah, that's what I'm saying. A couple hundred bucks a month. So my next question was, do you pay any editors or VA's or agencies or contractors to work on the show? A lot of entrepreneurs do this. For many entrepreneurs, it is a $5 per hour VA overseas who they're expecting to just be able to do everything with their show and be a marketing pro and grow them an audience, which if that's you, that person does not know how to do that. If they did, they would not be doing your dirty work for five bucks an hour. But nonetheless, it's very, very common. So this entrepreneur was working with a production agency who's charging him $3,000 a month for audio editing, video editing, thumbnails, publishing, and a few other things. And by the way, if you're paying three grand a month or more, talk to us, we gotta link you up with podcast fatigue. They'll get you a way better stuff at a way better price. I digress. So he's paying an agency. And so now we're at, let's go with the lower end. Now we're at $3,200 a month. So that entrepreneur is like, yeah, okay. All right, yeah, you're right. I'm paying $3,200 a month for the podcast and it's not generating any revenue. I can see where you're coming from. I'm like, ah, not so much. I said, okay, you're at 100K a month that usually means that you've got other employees. So tell me, do you have any in-house full-time employees who are working on the show? And he said, yes, I actually have an executive assistant who helps me with booking and with some of the social media stuff. And I said, okay, how much do you pay your executive assistant? And he said, my executive assistant is $30 an hour, okay. And I said, all right, how much time does your EA spend per week on the podcast? And he said, yeah, probably like four hours. So we're talking $120 a week that you're paying your EA to work on the show, which translates to, do some quick math here on my trusty calculator, $480 additional dollars per month. Now this one is super hidden because you just pay your EA salary, you're not really tracking their time, but they are spending their limited attention on your podcast instead of doing other things that can grow your business. Now this gets even more expensive if you're one of those entrepreneurs who has like junior marketing employees helping you with the show, you know, that person that's a copywriter that you say, oh, podcasting is marketing. Here, junior marketing employee has no experience growing or monetizing a podcast, grow and monetize my podcast. And if that person makes 60 grand a year, they're making $30 an hour. So now the cost is up to 3680 a month, which I'll admit is a nominal increase, but this number's going up. And he said, okay, I see you, I'm losing four grand a month on the podcast, I understand, I get what you're saying. I'm like, we're not done, pal. Because now we get to the real big part and this is the part where the eyes get real big and you're like, holy crap, I need to either quit this podcast or get it growing right now. And that's my point and it is this. This entrepreneur was not counting the value of his time. Now, like I said before, this entrepreneur is doing 100K per month. If that is true and let's say that this entrepreneur is working 40 hours a week, which I know every entrepreneur says they're working 80 hours a week, but really if you tell you how much work they're actually doing and don't count the time they're scrolling and messing around and blabbing the chat GPT, it really comes out to like eight hours a day. It's actually kind of hard to truly work for more than that. So we're gonna say 40 hours of true work per week. That translates to about 160 hours of work per month. Now, if your business is doing 100K per month, that means that as the entrepreneur, your time is worth 100,000 divided by 160. Pretty simple, the amount of revenue that your business does divided by the number of hours that you work every single month. And that comes to a grand total and this is the number that gets everyone of $625 per hour. Crazy. Now, actually before I made this calculation, I said, all right, let me ask you this. How much of your time are you spending on the show? Interviewing, thinking about the show, preparing, researching, all in. And he said, yeah, I probably spend about five hours a week on the podcast. I said, okay, five hours a week, times four weeks in a month is 20 hours a month. Now, we just determined that your time is worth $625 an hour. Do you know how much of your time in terms of dollars you are spending on the podcast? 625 times 20 is $12,500. So now we're really getting up into the stratosphere. 3,680 plus 12,500 is 16,180. Now, this is conservative. You might be spending more on a production agency, if you are reach out to podcast fatigue. You might be spending more on internal employees who are helping you with the show. And you definitely might be spending more on software and tools and studios. I see that all the time. A entrepreneur rents out a studio every time they record for $500 or even $1,000. So the number in terms of, sure, hard cost, plus employee time, plus your time adds up to usually for an entrepreneur who's doing 100K a month, that adds up to usually 15K to 20K a month in cost. That also does not account for opportunity cost. So if you took those 20 hours that you're spending on your podcast that's not growing, and instead you spent 20 hours a month on Facebook ads or taking sales calls or something that generates tons of cash, whatever that cash amount is, who knows, do you think if you had 28 hours a month back, you could double your business? That means your opportunity cost might be $100,000 a month. But I don't want to get too crazy and too ridiculous here. So if you are doing 100K per month in revenue, you are losing 15 to $20,000 a month by spending all of your time, money, and energy on your podcast. All right, we'll get back to the show in one second, but real quick, what if instead of publishing into the void every week and seeing the same flat audience numbers with no growth and no ROI, you got expert feedback on every single episode that you published, feedback that broke down exactly what you did right, and exactly what you need to change in order to grow faster. And what if after just four weeks of getting that kind of feedback, your numbers actually started to go up? Well, that's exactly what happens inside the Grow the Show Accelerator. It's a 90-day program where you're going to get one-on-one guidance on the actual episodes you publish. You learn what it takes in order to grow a podcast in today's day and age, and along the way, you get feedback from an expert that guides you as you grow. All, of course, so that you can grow your audience, get more leads, and make more sales. So if you'd like to chat with us to see how this could work in your business, just click the link in the description and apply. All right, back to the show. And look, I know there's a chance you might not be yet at 100K per month, and you're like, yeah, Kev, that sounds great. I wish I was at 100K a month, and I wish I could have the opportunity to lose $20,000 a month. But even if you're at 10K a month, right? Even if you're at a 10th of that, which is way more common, and still really awesome, you just divide your hourly rate by 10, and that means that you make 62.50 an hour. So if you still spend 20 hours per month on your podcast, and you make around $10,000 a month, you are still looking at a cost in terms of your time of $1,250 a month, which could add up, if your software's 200, and you pay that VA who's helping you with the podcast, let's say their time is costing you an extra 100, and Lord knows, I know I meet a lot of solopreneurs who are paying thousands of dollars a month in podcast production agencies who are making no money from their show, we're still talking on the low end of $1,500 a month in cost. By you doing a podcast, that's not growing. Oh, and what I don't even mention is like a lot of these folks are solopreneurs who are doing five to 10K a month, and if they're not paying an agency $3,000 a month, then they are spending all of their time editing the show, which usually means they're spending 20 hours a week. I've seen that many times, I've been there myself, and if that's you, you're spending 80 hours a month on your podcast, you're still spending $5,000 a month of your time on this show. So the message here is that your podcast is costing you more than you think, mainly the big chunk is your time. If you are an entrepreneur, your time is literally the most valuable thing inside of your business. So once again, if we add up all the hard costs, all the labor costs, and the cost of your time, on the low end, you're spending about $2,000 to $5,000 a month on your show. If your business is doing, let's say, 5 to 25K in revenue, if you're on the higher end and you're doing 100K or more, once again, we're going to be closer to that $20,000 a month range, because at that point, not only is your time worth more, but usually you have more resources available to you to hire a bunch of people to also work on this podcast that is not growing or bringing you any clients or customers. So if you're still listening to me now, odds are you're in this boat. Your show is not growing the way that you want it to, maybe not at all, maybe you're stuck in the friends and family's own, and you've now realized, holy crap, I'm spending so much more in hard costs and time costs on my podcast than I realized. And my goal is for you to understand that this is urgent, like you need to see this truth and make a decision, because from here, you have three options. Option number one is you quit, and you save five to $10,000 a month in hard costs and time costs, and you get back all the opportunity costs that you're currently losing by spending all your time, money, and energy on this podcast, because by the way, remember this entrepreneur I mentioned earlier who's losing $16,180 per month? I don't know if you remember, but he told me that he has been podcasting for a year. So if we multiply that by 12, guess how much he has lost? $194,160, gone, completely lost, paid out in software fees, fees to contractors, VA's, agencies, employees, and yes, this entrepreneur's time. So once again, you have three options, and this is how I wrapped it up. I walked him through this, and he said, damn, I didn't think of it that way. And I said, yeah, man, think about how much you pay to be in this mastermind. You're spending that every single month on this podcast that's getting you nothing and has been getting you nothing for a year. So the way I see it, you have three options. Option number one is you quit the dang thing. Stop, decide, I don't wanna lose this money anymore. Option number two is you get help. Higher somebody who knows and can teach you and your team how to start to get those numbers up so that you can start to get ROI, and you can start to justify that 15 to 20K in lost time and money every single month. Here's the cool thing though, when you do get help and when you do get your show growing, a lot of times you make back all of the money that you invested in the beginning. Because once you build an organic audience, it's just so very profitable, that I've seen a lot of people lose money for a whole year and then the show finally starts working and they make it all back and more. But here's the key, here's what you need to understand. That is not going to just happen. You are never going to just wake up one day and oh, I get it now. If you don't know why your podcast isn't growing, you are not going to grow it. Because your podcast is only ever going to grow when you know exactly why it's going to grow. And if you don't know why it's not growing, that means you don't know how to grow it. But I promise you, it is never going to happen that you just make episodes and your show just grows. You're like, I don't really understand how this is growing. Now actually, there's a couple of people who I know personally who will reach out to me and say, that's how mine grew, but trust me, I have interacted with literally more than 7,000 podcasters over the past five years and I can probably name you maybe eight who just put out a show and it grew without them understanding why it's growing. And the thing is, everybody goes to them for advice and they're just like, I don't know, post on social media. So either quit your show, number one, number two, bring somebody in who can help you who actually knows how to grow a podcast. Whether or not it's me, yes, I know how to do this. I can help you with this. I would love to work with you, but it doesn't have to be me. Just please, for the love of all things good, if you're going to be investing all this time, money, and energy in your show, get someone to help you or your third option is do nothing. And now that you know how much this is costing you every single month, be cool with that. Go another year, lose another hundred grand on this thing where you look at it and you're kind of embarrassed at how few people are paying attention to it, huh? So those are your three options and I promise you they're the only three. So which one are you gonna take? Are you gonna keep going and not growing and plowing your life force into this thing and hoping that at some point something magic happens and it blows up and you're like, wow, I can't believe this happened. I don't know why it happened and I don't know how to make it happen again, but it happened, not gonna happen. Bring on some help, hire someone like me or any of my competitors and actually get moving on this thing or just stop and quit and there's nothing wrong with that. That actually could be a smart decision and there's a lot of podcasters I know where I do think it would be a smart decision for them to quit. So I'll leave that up to you. Now, my goal and the way that I do content, the way that I do this stuff, I try to be really encouraging and down to earth and I try not to be one of those bros that's just like, you gotta grind. However, I also strongly believe in having the courage to tell the truth and you need to hear the truth, which is if you're doing this thing, you need to take it seriously and it is not going to just happen, it is not going to just grow for free. If you wanted to grow, you have to get help. You have to learn how to do it, you have to spend all the time that it takes to figure these things out, which you can or you need to bring somebody in who can do this for you or show you how to do it or something, but just continuing to grind it out and lose money and lose time, it's not gonna magically fix itself. That is just a matter of how long are you willing to go in pain until you decide to give up. That's where you're at and that's where most people are. And that's where the vast majority of podcasts end up. So, I'll leave you with that. My name is Kev Michael. I am your podcast growth coach with a little bit of tough love today. I hope you enjoyed and I will see you in the next one.