Using Revenue Goals to Guide Your Business Model
I’m not a huge fan of revenue goals. If you are new(ish) in business they can feel like something that you’ve pulled out of the air. It’s hard to plan projects and activities in support of that goal when it’s not grounded in anything.
They can also drive decision making that isn’t in alignment with your values. Think sleazy marketing techniques that are so out of alignment they make you feel ill.
Having said that, there are two areas where revenue goals have a place in your business are
- Making decisions about your business model
- Pricing your services
I’m not going to talk about pricing your services in this post. Except to say, knowing what you need to make to pay yourself helps you set prices to achieve that. Without working yourself into the ground.
A revenue goal also gives you clarity about what you need to sell to achieve that goal of paying yourself. You can start putting real numbers towards sales goals. You can look at whether your business model makes sense for you.
For example if you want to make $100,000 this year there are a number of ways you could achieve that.
You could sell:
10 x $10,000 one on one high touch done for you packages
25 x $4,000 one on one coaching packages
50 x $2,000 group programs
100 x $1,000 cohort courses
1000 x $100 self-directed courses
Or some mix of the above.
There is no right or wrong answer but there are some things to think about when you look at the numbers:
Marketing Required:
The kind of marketing you would do for 25 x $4,000 one on one coaching packages is going to be different to finding 1,000 people for a $100 course. To find 25 people, you can (at least initially) focus on referrals, building networks and leveraging other people’s audiences. Need to find 1,000 people? Then you are going to need to be a lot more visible or perhaps look at affiliate programs.
Are the costs the same?
Want to add that affiliate program in to sell your courses? Then you’ll need to increase revenue to cover the extra cost of paying affiliates. One on one coaching packages can be delivered at a very low cost. All you need is a way to communicating with the person (zoom, teams or skype etc), a good contract and a way to take payment. This could be as simple as a Paypal button on your website. Add in a scheduling software (to make appointment scheduling easier. Calendly and Acuity are two of many options that do this.
System and team requirements:
With so many software options out there, it’s not too difficult to deliver a professional $100 course to people. Offer a high end course and people may expect things like a community or more direct access to you on top of the course material. Which requires more complex systems and sometimes team members to manage.
Personal Preferences:
Love talking to people one on one? Then one on one services could be the one for you. Need to have a lot of flexibility in your work hours? A self-directed course could be ideal for you.
Client preferences and outcomes:
Can you deliver the outcomes your clients are looking for in a course? Or do they require some element of one to one support? Are your clients strongly self-directed or do they want accountability? Can they afford a high cost offer or are they looking for something more affordable? Being clear about what your clients want and need is an important part of process. Having said that it’s easy to assume your clients won’t pay much for your services. When in reality for the right offer they will be willing to pay much higher prices. Often our own imposter syndrome sneaks in here and tells us lies.
Stage of business:
To make good money off a low cost offer you need a large audience. If you are early in your business then you probably won’t have enough people to earn enough from sales of low cost offers to pay yourself a living wage.
Other sources of income:
Low cost offers can take longer to generate enough income you can live off than one to one offers. Which is a problem if you are relying on your business to pay the bills. But if you have a job that covers these costs, then you can take your time to build that audience, test out course ideas, messaging and all the other pieces that need to work well to make the kind of money you want from low cost offers.
I’ve set out above, specific topics to consider when looking at your business model. However, once you’ve done the numbers then often your intuition will be telling you what would work for you. It’s one of the ways I see the numbers working with intuition to help you build a business you love.
I love journaling as a tool for getting in touch with that intuition. To quiet all the noise about how you should do business. If you are feeling unsure about how you what to work then find a quiet space and journal how you would like your business to look in one year’s time. How would you be working with clients? How would you be earning your money?
Combining intuition and numbers is the way I like to run my business. And it’s how I help others get clarity in their businesses. If you are looking to do a reset on your business because you feel you’ve gotten off track or are doing too much then book in for a Thoughtful Business Pause .
Originally published at https://quietlyextraordinary.com on April 8, 2023.
