The Number One Lesson From Losing A Business Overnight with Kelsey Chapman

TRANSCRIPT AUTOMATICALLY GENERATED Diane: Hey, Hey, today I'm chatting to my friend Kelsey Chapman who lost her business overnight today. Kelsey is an author podcast, agency owner, and course creator. But back in the day, she ran an Instagram agency focused on growth strategies for her clients. This is her story of how one change that Instagram made that was completely out of her control cost to her business overnight. Hey Kelsey, why don't you walk us through what happened. Kelsey: Man. Well, I woke up on a Friday in April to a text from a client. And I knew it was all over. I, I had read the writing on the wall for a little while. You know, there was a press release here and there from Instagram and. They never issue, press releases. They never talked about algorithms. Since I was reading the writing on the wall, you know, we were using some automation to grow my client accounts and I was primarily specializing in growth, real growth, real followers, but we used apps to help. Streamline the process. And I tried to streamline this process manually, but there was no way I could serve my clients at an affordable cost. Um, if we did the, did the service of growth for them. Manually. And so at this point it was using the apps to streamline our process or nothing at all. Cause I was running accounts for 50 clients a month. I had $20,000 months for. It had probably been $20,000 months for at least six months. At that point, I had three people employed and we had this operation growing Instagram accounts. Again, real followers. I do not have never advocated for using bots. This was not a usage of bots, but it was using the app to streamline our process and have used it for years at that point. And for about the year leading up to it, Instagram was shutting. Account's down for bots. And we were trying to figure out if this app was getting categorized in that group. And we had not seen any shutdowns using this tool. And so I was never willing to put my client accounts at risk. And every time I onboarded a client, I would say, we're going to ride this wave until we can. But one day Instagram is going to shift to ads. I know it. We can. Look at Facebook as an example, Facebook, at one point you could grow manually or with elbow grease or with tools. And then at some point they shifted to paid advertising. You have to pay to play. And so when Facebook bought Instagram, I knew that would happen one day. And there was about this year long lead up to this specific Friday in April, where. There was a press release. Occasionally there were accounts getting shut down. I was trying to figure out what's the safest route. I was keeping my clients and formed. I would say let's ride this wave as long as we can. And one Wednesday, I guess it was two days before this Friday when I knew it was over. I had noticed that. The actions we could take and following and liking people were cut in half. So I'm like, okay, the results I can yield clients are probably going to be cut in half, but we can work with this. You know, this is really stressful, but at least I know what's going on. I spent half a day trying to figure out, like, why am I getting kicked off? Why can't we grow for clients? Why are our results down? And then I figured out, okay, Instagram has changed the actions to prevent anyone. From doing this manually. and then Friday morning it was cut into a fourth pretty much, and it was all over. And. Our app had a message up that was like, we're shutting down. And I had used that app for years. I was not willing to use any other software. I was not willing to put my client's account at risk because I was already using somewhat of a gray hat technique, but was not willing to go into like black hat techniques. I was trying to stay above the board , I remember getting a call at 6:00 AM, from Linda, my type a clients who could always figure out things before me. And I stopped all morning and I knew I should go to the gym and just like grind it out. I remember so vividly pushing a tire across the whole room, just sobbing, knowing like my husband's in college. I don't have a sugar daddy. I've funded our life to get him through college. I have a mortgage, I have three employees and I have clients that have leveraged Instagram to grow their platform, to get their message in front of more people. And I didn't know anyone who was doing it without ads that could serve them beyond this. I mean, I was trying to look for solutions for them because that's how they grew their businesses. And so. I, I, I think I was speechless. It was a very quiet day. It was probably the quietest. It got really silent. I didn't have people to manage. I was waiting about a day to contact everyone cause I was still trying to problem solve and it just got really quiet. Diane: And so in that up, when you were having the kind of 20 K months, and this felt like this could be a possibility, was there a part of you that was sliding money into the, what if Instagram kills my business jaw? Kelsey: Yeah, it was, um, Definitely not 20 K coming to me and the pockets and I was paying these employees and I honestly wish I would have saved more. I could have even Al after paying employees and paying myself, I could have saved more, but I. I always put money back into my business. I need that new website. I need this. And I'm forever running leaner after that experience, because you never know when you're going to need three to six months to just ride it out. Thank God. Within four days I had my book advance come in, but without that, we would've been screwed. I mean, I. I had a $10,000 check come in. That was part of my book advance. And I was like, okay, I've got a few months. And I let my employees go, who were my friends, like best friends and gave them cash out of my personal savings account to ride out a few weeks too. Find a new job because I couldn't bear to just leave them hanging at the drop of a dime. So I literally pulled out money from just our personal account and just went and told them in person and said, I'm sorry, you know? And that was humiliating. I felt horrible. These are my friends. I don't want to leave them without an income. That probably was one of the things that felt the worst. Diane: What do you think has changed for you from the experience? Kelsey: I think a few things, you know, today I run a lot leaner. I try to save more. I've really been diving into the profit first method for most of those years, I paid myself last and I need to pay myself first. So I can put that money in savings for a rainy day and I don't need to hire or make choices without being able to pay myself first. And so that shifted a lot for me, saving, running leaner. And then I, this makes sense for who I am. I was just too busy to do this at the time, and I hate that excuse in that word, but. Running an agency took over my life, managing 50 clients a month who are obsessed with their followers who messaged you at midnight, 6:00 AM you name it? It's also my own problem of not setting boundaries. Um, but I run my business with diverse offers that will not be affected. If something changes in that industry, I have a service-based business. I have eCourse bundles. I have my own courses and they are not dependent on each other to run. So it, any given. And then, I mean, I can pull in a couple extra grand by just putting a little energy into that offer if I need to focus on it. And that makes me feel really safe. I think like really, really diversifying my streams of income has been. A way to run my business. That makes me feel a lot safer because I've very much lived on the other side of having all my eggs in one basket, paying people out of that one basket, it disappearing truly overnight and going from $20,000 months to zero in a day and paying back those clients. I had clients who had paid me a year in advance. Cause they'd been with me for years. They knew the system worked. They're like, if you'll give me a price break at three, six, Or 12 months, tell me what you'll charge me and I'll pay it. So I had those people that I was, prorating a refund to because I wasn't going to just screw them out of money for no services. And so I live a lot differently. Now I have a lot more boundaries with my clients too, because I really drove my body into the ground, running that agency in that model. Diane: So. With the clients where you have to pay them back. Are you more conscious now of when you give somebody a year-long contract because you have a podcast agency now as well. If somebody is paying you in advance for that, are you conscious about where that money goes? Is there a refund fund? Kelsey: Yes, there is a general savings account at this point where we can refund them, but we don't refund for services with podcast pitching because we can continue. No algorithm will ever change that. Whereas I was really playing Russian roulette with the Instagram algorithm and it was fun ride, I mean, some wild month, so profit, but it was way too. I don't operate that risk Scully anymore. Diane: Any pushback from the clients, like when it happened, was there anyone there who was surprised or outraged. Was there anybody else who their whole business crumbled because they were expecting their Instagram to grow X amount. Kelsey: Well, about a third of my clients were beach body coaches. So anywhere from 15 to 20th, those clients were building their teams through Instagram first and foremost, because 10 years ago they were building their team on Facebook five years ago, they were building their team on Instagram, who knows where they're building it now, probably still through Instagram, but they were very reliant on gaining new leads. And so I think it probably affected them the most. I ran a lot of accounts for pure Barre studios as well. And I think. That affected them, reaching out to people in their community digitally. , but I would say, This is just pretty true across the board, but the people who paid the least are the most demanding and the people who pay the most were the least demanding. So literally one of my clients who have paid me for six months was like, don't refund me and you shouldn't refund anyone. And I was like, no, ethically. Like I, she was like, we knew we were playing with buyer. We knew this would change. You were very clear that we will re that was my signature phrase. Let's ride the wave as long as we can. She was like, do not refund me. And I just was like, Blown away by her kindness and generosity. I still refunded everyone. She wouldn't let me, but then like one person who had been with me for two weeks and it changed was sent me the escaping email. But at two weeks she just hadn't built that relational equity with me yet. You sound so calm talking about it now, but of course, this was a few years ago I can remember being on chat with you and talking to you I just remember thinking, I don't know how to make this better. Like that's her whole business. I remember sobbing and just thinking, am I a 29 year old peak? Or like, whatever, make this kind of money again. I ran so riskily I'm stupid. I didn't save more. Like all of those feelings came up of like, I PLU it. Like, even though this was not something I did. I still feel like I hadn't stewarded that cash coming in my systems, a backup plan, diversifying my income. I hadn't done any of that. And I haven't even had to come before that teach on a crisis plan and I still hadn't implemented it yet. And thankfully that's not where the story ended, but. It was a really humbling, very quiet. Like I just will never forget how quiet it felt in that season. Just like what's next. Diane: So if you could take one lesson, if you could distill it into the one thing you would tell people to do first based off of what happened to you, what would that be? Kelsey: You have a backup plan and have a plan of like, What platform are you shifting to? How are you going to communicate with people? What if, what if that platform changes? I mean, we're seeing Instagram accounts get hacked left and right, right now, also not even getting hacked, just shut down by Instagram. And it's for no apparent reason. I've had two friends in the last movie get their account shut down, and one of them was in the middle of a summit. And so she was like, thank God I had an email, I put just as much intentionality into my email list as I do my Instagram platform, if not more, because no matter what happens, I can take those people with me and. The more you deposit into the e-mail list. The more you're able to withdraw, not that I'm depositing in order to withdraw, but like that can still provide me an income stream. Should it all go away overnight? Should my whole online presence go away overnight? Should my ability to grow, go away overnight. Like it has, I haven't grown much since that season and that's okay with me because my business is still thriving. It took me a few months to pivot, but it is thriving today. And so. I think not putting your eggs in just one basket, whether that's offers or platform. Diane: It's such an interesting story because I think so many people are still so reliant on social media. Maybe not to the extent that you were reliant on Instagram, but I think it's good for people to see that kind of stuff can really derail things. thank you very much for walking us through that. Kelsey: Thank you for having me on to talk about this. Totally change your life and it did, and you can recover, but it's really painful. So if you can avoid it, I highly recommend it. Diane: You may not agree with Kelsey's business model. Back in the day, you may not have all your eggs in one basket, but we're all incredibly reliant on software and other companies in running our businesses every single day. You heard Kelsey say she knew better. She knew she needed a contingency plan and still chose not to make one. I want to invite you to my you're one crisis away from losing your business workshop. We're going to talk about what a crisis is and why it's probably not what you think. I'm going to introduce you to seven real-world entrepreneurs, just like you and me who have had crises happen in my businesses. And I'm going to teach you a simple step-by-step process to build a plan, even when you don't know what you're planning for, and then we're going to build a contingency plan for your business on that work. To walk away from those 60 minutes with more peace of mind. And you had, when you walked in. So if you head to Diane mayer.com forward slash plan, you can grab your seat and that peace of mind.