Money! It’s such a taboo subject and no one wants to talk about. Luckily for you, I have no filter and don’t understand social norms, so I talk about money all the time, in really honest ways.
So let’s get honest here: how much money do you REALLY need to make?
And don’t answer, “Six-figures,” just because that’s what all the “cool” kids on the internet claim to be making. You need to think about what YOU legitimately need to make, not some random number someone else told you should be your goal.
It’s important to set your own, personal goal, based on real factors, instead of an arbitrary measure of “success.” When you have a goal that feels real, based on real numbers, you are far more likely to actually achieve it.
So let’s figure out how much money you really need to make.
What are your personal expenses?
Do you know how much you’re spending to live? Life is crazy expensive!
Personal expenses are the things you pay for every month in order to live your life. This includes bills and expenses you must pay to survive, as well as things that are nice to have. Don’t forget you also want to put aside some money for savings each month!
Your expenses now might be pretty low, but what if you want to make some changes that will raise your personal expenses? Maybe you’re planning on having kids, moving to a bigger house, or traveling the world. When figuring out your personal expenses, don’t forget to include expenses that you may not have yet–but plan to have. This will give you a more accurate picture of what you really need to make.
What are your business expenses?
Your business is probably online, so you likely don’t have as much overhead as you would have 20 years ago. Go us for being born at the right time to take advantage of technology!
But even the most boot-strapping online company has some expenses. Business expenses include things like web hosting, legal fees, taxes, and all those fonts you keep buying for no reason other than they’re amazing.
Something I’ve noticed over the past few years is that as your business grows, your expenses go up. Whether it’s getting a better web host, hiring a VA, or even expanding to a full team–all of that comes with additional expenses. While you can’t know ALL your future expenses, doing your best to calculate your expenses for the next year or two will help you see how much you’re going to be spending. Especially if you’re on the cusp of hiring someone or investing in a fancy training program, locking down a budget for that will ensure you have a clear picture of how much you need to be making.
What’s your yearly income target?
Add up your personal and business expenses, then multiply by 12 to determine your yearly income target.
How much money do you really need to make? Is it the six figures you thought you needed? More? Less? Whatever the number is, and no matter how scary it is, it’s a real number. Now we can break it down and figure out how you’re going to make it.
How will you make the money?
Here’s the magic: now that you know what you need to make, you need to break down how you’re going to make it.
At fun as writing a check to yourself for $100,000 and posting it above your desk might be, it’s really hard to get there unless you honestly break down what you’re selling and figure out how much you need to sell.
For example, if you’re currently selling websites for $1,500, but need to make $60,000 in a year, you’re going to have to sell (and create!) about 40 websites a year. That’s almost one per week, and the overlap of projects would be insane.
I don’t even think wonder woman could knock that out.
But don’t let that discourage you. Now that you know, you can start taking steps to figure out a model that works better.
Maybe you raise your rates to $3,000. That cuts the number of websites you need to make in half. You would still need to knock out 20 websites in a year, which is pretty ambitious, but not impossible. Is there a way you could make that work? Maybe switch to doing theme modifications instead of fully custom sites?
Or, could you both raise your rates and add another service?
Maybe you decide to add website maintenance packages at $100/month to your lineup. This option gives you recurring revenue, and you only have to make the sale to each person once. Score!
Now we’re selling websites for $3,000, and have website maintenance for a total of $1,200/year for each client.
To make $60,000 with those services, we could break it down like:
- 15 websites @ $3,000 = $45,000/year
- 13 maintenance clients @ $1,200 = $15,600/year
You can obviously break that down in whatever way makes the most sense for you, and for the life you want. But the point is, you have to break it down. You have to see where the money needs to come in, so you know what and how much you need to be selling.
Figure it out!
Sit down and add up all of your monthly personal expenses. Then add up your monthly business expenses. Add those together. How much do you need to make?
Write down your services, and what you’re charging for each. How many do you need to sell to hit your income goals?
What can you tweak as far as pricing, or adding services to help you arrive at the numbers you need?
This only works if you do. Make the time today to figure out how much money you really need to make.