Most people want more of me.
They think about me, but don’t often talk about me or want to hang out with me.
In fact, a lot of people avoid talking about me altogether.
Many people are even more comfortable talking about sex than talking about me.
What am I?
…
…
…
MONEY!
Did you know…
Small businesses with a revenue plan grow 3x faster than those that don’t.
3x faster.
Money can be a challenging subject to tackle, but I am all about your success and the success of your business so we are digging in and creating a plan.
It is a challenge and an investment of time that we must make if we are committed to the growth and success of our businesses.
Are you with me?
Let’s ease in with some basics:
Revenue, Expenses, and Profit.
REVENUE
Amount received by a business for goods or services sold.
Example: Coaching program costs $395 x 10 people purchased the program, revenue is $3,950. If you were to compare this number to what someone makes via a paycheck from an employer, this would be the equivalent to the salary (amount paid before taxes and other deductions are deducted).
EXPENSES
Money spent or cost incurring in support of generating revenue and running a business.
Example: Monthly expense for bookkeeping or accounting system (e.g., Freshbooks, Xero, Wave Accounting), business education/training (e.g., DailyWhip, B-School, Client Attraction).
PROFIT
Positive gain after costs/expenses are subtracted from the amount earned in the business (revenue).
Example: Revenue – Expenses = Profit
So, now that we have some of the terminology down, let’s create our plan and pump up our growth rate.
Sound good?
ACTION JACKSON
Let’s start with our revenue plan. To get started:
#1) Products + Services :: Make a list of all of the products and services you offer
Service A
Service B
Service C
#2) How much of each when? Identify how many of each product or you service you want to offer in a given time frame.
Service A 2x/month all year
Service B 3x/month all year
Service C 4x/month once a year
#3) Do the Math :: Multiple the number of times you will offer the service (2*12) times the price of the service.
In example of Service A, the calculation would look like this:
2 x 12 (offer 2x/month all year) x $100 (price of product) = $2,400
#4) Organize & Assess Results :: After you’ve done the math map out how much you will make on a monthly and annual basis based on your products or services, prices, and the number of times you will sell each item.
Now you are ready to assess, tweak, implement, and reset as needed.
As you look at your revenue plan, consider:
Is the amount of income you will generate in line with the targets you had in your head?
Are you undervaluing or low-balling your service offerings in your pricing strategy?
Does your revenue model align with your business model and your core values?
Is the amount of revenue you will bring in worth it based on the amount of energy you will have to expend to generate those services?
So, how’d it go? Let me know in the comments!
If you are struggling at all, pop me a message.
I am happy to help you tackle this important piece of your business planning process.
More tomorrow!
Amber
Hi Amber! I loved your riddle 🙂 This is such a timely post for me because I’ve been working on getting over my money blocks lately to generate more income. I know learning more about money and planning will definitely help me.
As an entrepreneur, I think a lot of us have a tough time charging what we’re worth and openly having an abundance mentality.
I’m going to use your advice and actually chart out a plan for how much I want to earn this year to help me feel more comfortable with money.
Thank you!
Hi Amber,
I loved your riddle. Such a clever idea. 🙂 You gave some great tips. Ironic that although most people want more of it, they seldom think through budgets, let alone do any revenue planning. Keep up the great work.
That was a great riddle. I asked my son to see if he could guess. 🙂 I was speaking with my accountability partner today about this because of the money going out for programs and things we need for the business. We saw how not really tracking everything going out was causing problems with money issues. Thank you for the breakdown today. As we gear up for tax time this is a great reminder.
Great post Amber! My business is one of those that’s going to grow 3x as fast. Revenue plan in place!
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This is so important Amber. So often small business owners just start doing what they are passionate about and fail to take the time to build a business from the foundations. Thanks for the reminder. Sarah
Okay, I admit it, I am a nerd and do this A LOT. I love the riddle too, because I was all, “I know what it is, I know what it is!!” :o) This is such a valuable post, because when I help start-ups and businesses with this, sometimes the revenue model has absolutely no relation to what they NEED to make. Thanks for making this so simple and straightforward!
Amber, loved the riddle (probably because I guessed the right answer 😉
Thanks for making this so clear cut and simple – I am on my way to 3x growth in 2013 – thanks for your encouragement!
You know this is one of my favorite things to do at the beginning of the year?
I know numbers and excel sheets are scary and boring to some people but to me it’s so exciting and creative to start with a blank sheet and work it all out. And then TRACK every month of course!
I can imagine that the awareness about the numbers makes a huge difference and let’s businesses grow 3x faster, as you say.
Thank you!
LOVE the riddle, Amber! I think the steps you’ve outlined are great as it can really help us see the big picture with our business, especially when it comes to asking ourselves if what we’ve planned truly aligns with our vision and if we are truly valuing our offerings with the pricing strategies we choose.
Amber, great post lady! While it is simplistic, it is SO helpful to see it laid out this way – thanks!! Also, your riddle and graphic are fantastic…and SO TRUE! I have been more aware of my money and my financial status in 2013 than EVER before. It is so empowering!
xo, Tina
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Hi Amber! Thanks for this post. I just worked on my revenue plan based on what you’ve outlined above, but when I came to the final step, I’m finding it hard to align with my minimum first year target annual revenue. I’m also not sure if I am pricing my programmes appropriately. Is it better to start out with lower prices and smaller offerings then raise prices later but add additional incentive for the offerings? Help! I’m finding getting this part of my offer right is proving to be the most difficult.
Hi Amber! I just found this post and I have to say, I think it’s going to be extremely helpful in planning for 2014. My partner usually handles the numbers, but I think it will be better if we both can get a handle on it and become more comfortable with where we are and where we’re going. I do have a couple of questions though, do you have time for a quick chat?
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