I help big dreamers like you develop the foundations needed for a thriving business, so you can use your business to follow your passion and live the life you want.
How much money does your business need to make every month?
Notice I said the word “need” and not “nice to have.” I’m talking about an achievable sales number that will allow you to cover your costs (including your taxes) and live a nice life without constantly stressing about money.
If you can’t answer this question, it may be because you’re not completely comfortable with the financial side of your business. You prefer to take an “I’ll just do my best and see what happens” approach to money.
The problem is, it’s risky and ultimately unsustainable to operate a business without clear and specific financial goals. If you don’t have goals, then one of two things will likely happen.
You need clear and specific financial goals that take into account your personal income needs, business expenses, taxes, and profit. Clear goals will transform not only your business performance, but your peace of mind, confidence, and work-life boundaries. Below are five ways that clear and specific financial goals can transform your business.
Having a clear sales goal means that you can base your pricing on the real, actual costs of running your business. If you know how much you need to make, and you know your capacity, you can determine how many clients you need to take on in a given month, quarter, or even a year.
Basing prices on your real costs is a huge confidence boost. No more guesswork or “how much would people be willing to pay for xyz.” No more pricing based on your competitor’s cost structure. No more discounting your pricing at the last minute out of panic and insecurity. When you know why you charge what you charge, you can present your pricing to clients confidently.
It is overwhelming to decide which marketing strategies are going to work for your business. To make things worse, for every strategy there are dozens of experts trying to tell you that their way is the best way. (Pinterest! Youtube! Networking! Instagram! Facebook Live!)
Thankfully, the first step to effective marketing isn’t picking the perfect strategy but defining what you want to accomplish from the strategy. Knowing how many clients you need takes the mystery out of marketing.
When your sales are general, your marketing strategies are general, too. But, when your sales goals are specific, your marketing goals become more specific and targeted. For example, instead of “how can I get more followers on Instagram” you can ask yourself “how can I get three discovery calls from Instagram this month.” There is so much power in being specific!
We all want to make wise decisions about investing in our businesses. Having a clear sales goal makes it easier to determine when you can invest in things that will take you to the next level. If you’ve ever wondered whether you can “really afford” that course, rebrand, or assistant, then you need to understand how these investments will affect your overall financial goals.
For example, if you want to hire a virtual assistant for $500 per month, the question shouldn’t be “can I really afford that?” but “can this assistant make it possible for me to make an extra $500 per month?” Connecting investments to your financial goals gives you the information you need to make smart decisions.
If you’re stuck in the scarcity mindset of “more is always better” you will be prone to overwork. You’ll take on more clients than you need (or than you can handle) out of fear of not having enough. No one wins when you try to do too much: your work suffers, your clients suffer, and you suffer.
Instead, having clear sales goals helps you turn down or delay work when your calendar is already full. For example, if you only need three clients per month, and you get another inquiry, financial goals give you the power to say, “I’m booked, can you start this project in November?”
The biggest benefit of specific sales goals is the ability to define success for your own business and stop comparing yourself to others. It gives you the power to define success on your own terms and the ability to truly celebrate your progress.
You may think you need to hit a certain number in your business to really “make it” as an entrepreneur. You don’t. You may think you need a certain level of sales to validate your skills as a creative. You don’t need that either.
If you can make enough money to pay yourself, your taxes, and your bills doing work you love, that’s worth celebrating.
Get my Monday morning email, The Pep Talk. I’ve been told it’s like a “love letter to your business brain,” and I have to agree.