When we’re first dreaming of a business, it can be pretty scary to imagine actually quitting our jobs and creating enough income - consistently - to replace our salaries.
One of the first exercises I ask of my business mentoring clients is to write out their ideal life. What do they want to achieve? How do they want to live? But this exercise can be quite confronting - they fear not being able to make all their desires come true - particularly if it would require them to make more money than they do currently in their 9-5 job.
However, anything is achievable with the right plan - we just need to understand what it takes and then believe we can do it. If we don’t work on the inner belief system, we’ll subconsciously self sabotage to keep our life in our current comfort zone.
One of the reasons I love online, information based businesses so much is their flexibility - you can structure your business in so many ways to create the life you want to have. Almost any desires are not only achievable - they’ve already been achieved by people through their online businesses!
Here are the pieces you need to take into consideration when planning out your business:
Firstly, get real on what you desire - and what it costs. Do you want to upgrade your home, or travel more? Maybe you want to hire a cleaner or buy a nicer car. Whatever your desires are, list them out and work out how much it would cost. You might be surprised how close you are to some of your big dreams!
Calculate how much you need to earn as an entrepreneur on a monthly basis to enable you to live your ideal life.
Next, consider how you want your ideal day to look. What do you do, and how much do you work? For example, if you want to be able to pick the kids up from school every day, or make your 3pm Yoga class and also cook a healthy dinner each evening, factor in how many hours you’d actually have free for work. Again, don’t send guess it - this is your dream - dreams don’t have limits!
Count up how many hours you want to work per week. At least half of these will be needed for running your business - creating your marketing content, conducting sales calls, or working on new projects. The other half can be used for client time. You might be surprised at how few hours you have in your schedule to work live with clients.
How much time per client does your intended programme, product or service take? This could range from nothing (for an e-book, say) to an hour a week or more for a coaching client, to a full day for a consulting client.
When you know what your total client time will be, and how much time each client takes, you can see how many clients per month you can handle.
Finally, consider how much it costs you to get each client. If you’re already in business, look at your average marketing spend. If you’re not yet in business, take the industry average of $2 per sign up, of which roughly 2% will buy. This means your cost per sale could be around $100. Add on your monthly business costs - when you’r starting out, this should be under $100 a month.
You’ll therefore need to make this money on top of your ideal income each month.
Calculate Your Ideal Business Model
Once you know how many clients you can work with per month, and how much you need to earn - you can then understand how much you’ll need to charge. Does your current pricing strategy make sense, or do you need to raise your prices? Does it make commercial sense to offer a cheaper product, like an ebook, or will you need to create a more premium offering in order to make it profitable once your marketing costs are taken into consideration?
I’d love to know how this exercise has changed your business plan - leave me a comment and let me know!