Say you’re a newly minted entrepreneur who is shooting for her first six-figure year. First, figure out how many days in a year are available to make money. Most people will assume that number is 365, but, realistically, there are only about 250 business days that most of us make money: five-day work weeks multiplied by 50 weeks in a year (that is only accounting for two weeks off, which is pretty much the major holidays, a couple of sick days and not including a vacation). If we take a $100,000 revenue goal and divide it by 50 weeks, you must make $400 a day in order to hit your goal. (Even if you have big projects in the thousands mixed in with smaller projects that earn you hundreds, you can — must — still use this model.)
I have learned to break down — and achieve — other goals in the same way: I am currently launching a new consulting business designed to help entrepreneurs get things done (versus training them to do it themselves). There are a lot of pieces to put together: e-commerce, copy, hiring a web designer, brand consulting, new professional photos, a social media campaign, sourcing team members. I have a list of each major milestone that needs to be completed in order to reach the goal, and those milestones each have an individual to-do list of tasks that I either need to delegate or do myself. Working in this way is meticulous, clear and measurable.
Another piece of determining revenue goals is to make sure you’re incorporating “running your business” into those numbers. If you are a solopreneur, only a portion of your day is billable time. The rest, you spend marketing yourself, blogging, networking, handling administrative work and pitching and closing sales. If you need to generate $400 a day to hit your $100,000 revenue mark, but only half of your eight-hour day is billable, you need to charge at least $100 an hour for your services.
Prior to this year, I worked mostly on a retainer model that, frankly, wasn’t working. After logging my hours (and my team’s) in a professional time-tracking software, I realized many projects were taking far longer than I had anticipated in my original sales pitches. I either renegotiated with my clients to work on an hourly basis, getting paid for all the minutes worked, or ended (sometimes painfully) client relationships that were costing me money versus being profitable.
So this year, instead of making a New Year’s resolution, create a New Year’s revenue goal. Break it down. Know your numbers. They aren’t scary if you make friends and get to know them. In fact, they just might help you blow through your revenue goal by 19 percent.