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If you’re digging into goal-setting for your business, you’ve come to the right place! When it comes to setting financial goals, I see so many business owners setting random goals based on what they think they “should” be making. But ultimately, this is not a good practice for growing your business, because your financial goals are as unique as your business! Who’s to say if getting to $5k months or $10k months is actually going to help you pay yourself more? Who’s to say when you get there that you won’t just be working 60 hours a week or create a business you hate? That’s why I have each of my coaching clients get super clear on their financial goals. I coach my clients to create profit-first financial goals that are centered around paying themselves more while also working less. Press play to learn a simple 2-step process for doubling your profit next year without sacrificing more of your time and energy.
Before you dive into this episode, make sure you also grab my free masterclass, “Double your Profit While Working Less” which also includes the exact financial spreadsheet that I use with my coaching clients. In this masterclass, I’ll show you step-by-step how to create and break down your financial goals so you can give yourself a raise while working shorter days and weeks.
STEP ONE: SET YOUR PROFIT-FIRST FINANCIAL GOAL
It’s important to know exactly how much you need to pay yourself. Knowing your numbers gives you a strong ‘why’ for hitting your revenue goals.
Tune in to hear more about:
- my method of financial goal setting
- how to hop off the Hedonic treadmill
- the key to having enough profit to give yourself a raise
STEP TWO: BREAK DOWN HOW TO REACH YOUR FINANCIAL GOAL
After deciding exactly how much money you need to be bringing in to pay yourself, it’s time to break down your financial goals into a specific plan, so that you know exactly what to work on to move the needle in your business.
Tune in to hear more about:
- the questions you need to ask yourself about your current offers, pricing, and capacity
- what will happen in your business if you don’t take the time to break down your strategy now
- my strategy for making more while working less
Before you go, make sure you grab the free masterclass, Double your Profit While Working Less, which includes an easy-to-use financial spreadsheet to help you calculate your profit-first goals for the year. And if you know that scaling in on the horizon for next year, and you’re ready to stop trading time for money and make some changes in your business, check out the Business Edit™ Coaching program, submit your application, and join me on a discovery call to see if this is a good fit for you.
Links and Resources Mentioned in This Episode
- Free masterclass: Double your Profit While Working Less
- The Business Edit™ Coaching Program
- Episode 47: Overcoming Shiny Object Syndrome
Click here to read the full episode transcript!
Jade Boyd: If you don’t stop for a second to double check your strategy for reaching your revenue goal, you’re going to spend an entire year banging your head against the wall thinking that the problem is that your marketing is off or if I could just get a few more clients, then this would work.
As we’re moving towards the end of the year, the thing on every business owner’s mind is goals for the new year. And as business owners, most of us are pretty focused on financial goals on where we want our business to head and how much money we’re going to make in the new year. Where are we going to go from here?
Because everything in your business does boil down to finances, right? Whether you’re starting a podcast or launching a program or hiring a team. Ultimately, the goal in doing any of those tasks and projects is hopefully to contribute to your bottom line. And today we’re talking about how to double your profit while working less.
And here’s the reason why I think this is really important. When most business owners go to set financial goals. They throw out a random number based on what they made the previous year. That is kind of the default for financial goal setting, but it’s not helpful because it leads you into pitfalls of either setting unrealistic goals for no reason and not understanding what you actually need to make in your business. So you set your goals high, you don’t break them down. And so you don’t have a strategy to reach them and ultimately feel like you were unsuccessful when you don’t reach them or you set them too low without understanding what it’s actually going to take to be able to hit your profit goal because revenue is one thing, but you can make a lot of revenue without being able to pay yourself consistently or give yourself a raise.
So that’s why I focus with my coaching clients and in my coaching program on profit not revenue because profit is what is going to change your life as a business owner because profit is what is going to allow you to pay yourself more to give yourself a raise while also focusing on working less.
And before I dive into the meat and potatoes of this episode. I want to let you know that there is a free masterclass that goes along with this episode that also includes a spreadsheet that is going to help you break down your financial goals for the new year, or if you’re listening to this in the future, it is never too late to break down your financial goals and understand where you’re at in your finances.
So, before we even dive into the episode, make sure you head to the show notes, grab that link, and sign up for the free masterclass so that you can grab the exact spreadsheet that I use with my coaching clients to help them set their revenue goals and break them down for the entire year. As well as a free masterclass to quickly walk you through how to actually use that spreadsheet to get accurate goals and meaningful and intentional goals that are actually going to help you improve your profitability as a service provider.
And if you haven’t up until this point dove into finances and taken the time and effort to really understand where your numbers are at, this might seem a little bit intimidating, but I promise you it is not complicated. This is very, very simple. And in this episode, we’re only going to talk about two steps.
Step one is to set your profit first financial goals. And in that master class, I break down exactly how to estimate and project how much you need to make and how to break down your financial goals in order to hit your profit goals. But I like focusing on profit first financial goals because again, revenue doesn’t really mean anything because you can make a lot of revenue in your business while not having a lot of profit leftover to actually pay yourself.
So it’s really important to know how much is actually enough for you to be able to pay yourself and cover your expenses and all the other things that you need to cover in your business. What is that actual number? It’s not just going to be like 10, 000 more than you made last year or double what you made last year in revenue.
It’s going to be a very specific number and it’s important to know exactly how much is enough so that that is a meaningful number for you. And it’s actually motivating for you because when you’re looking at that number, you know, everything that it’s going to allow you to actually do in your business and in your life.
I think the other pitfall that business owners fall into is just assuming that the next step in their business is whatever people on the internet are saying. Like, okay, I hit 5K months, now it’s time to hit 10K months. Or, okay, I hit six figures, now it’s time to hit seven figures. But I think it’s really important to actually look internally and ask yourself what you want for your life.
Like what type of business do you want to build and build your strategy around that. Not just what other people are telling you, you should do, or what logically based on what you’ve seen in your industry is the next step. But. Deciding for yourself, because those are going to be so much more meaningful and motivational goals that you’re actually going to stick to.
There’s this really famous story about John Rockefeller that comes up in a lot of different conversations on productivity and goal setting, but at the time of this quote, he was at the peak of his wealth. He owned 90 percent of the oil and gas industry of his time and was worth more than Bill Gates and Warren Buffett.
But he was asked. How much money is enough? And he answered, just a little bit more. And I think that we can also fall into that trap of just wanting more and more and more and never being content. And there’s nothing wrong with wanting to make more money. Don’t get me wrong. I don’t think anything bad happens when women make more money.
And I don’t want you to feel guilty if you have ambitious revenue goals. But I do think that it’s important to know why you want more money so that you’re not sacrificing things that really matter to you just for the sake of making more money because it does take effort to grow your business no matter what level you’re at.
And we can, especially in our culture, just fall into that trap of the hedonic treadmill, which if you’ve never heard of the hedonic treadmill, it’s basically this idea that we’re on this treadmill constantly pursuing success and pursuing more and more, but it never really stops because it’s never enough.
And we find that each new stage that we get to, or each thing that we achieve, whether in business or life, it doesn’t matter. As humans, we quickly return to our baseline level of happiness. So we look at these things thinking, once I get there, then I’ll be happier. Or once I get to point B, or once I get to 20k months, then I’ll feel successful.
Then I’ll feel legitimate. Then I’ll feel like I’ve made it. But in reality. When you’re operating in that mindset, you’ll quickly return to your baseline level of happiness. It becomes normal again, and you’ll just keep on that treadmill. So it’s important to actually look at your numbers and understand, based on the type of life you want to live and in the season of life that you’re in right now, how much is enough?
And I like to say that enough is not too little. When we think of enough, I think our basic assumption or what we jump to is that enough is enough is the bare minimum, but it’s not. Enough is exactly enough. By definition, it’s enough. It’s not too little. And at the end of the day, what really matters is not how much your business is making in revenue, but how much you’re paying yourself for the time and energy you’re putting into it, right?
And to increase how much you pay yourself, you need to focus on increasing your profit. So in my method of financial goal setting, we start with how much you want to pay yourself. Then we backwards plan how much revenue is enough to cover your expenses, your tax savings, your business savings, if you don’t already have an emergency fund and need to fund it, and if you have enough profit to pay yourself more every single month, pay yourself consistently.
So you backwards plan and whatever that number is, whatever that revenue number is, that does allow you to cover all of those things in your business. That is the revenue goal that you want to pursue because it actually takes into account everything that you need to cover in your business. And it’s also how you can double your profit and give yourself a raise, right?
Starting with what does it look like to pay yourself twice as much next year? And then building off of that to figure out what your revenue goal needs to be, because it’s not going to be doubling your revenue, right? You’re just doubling your profit.
And again, knowing your numbers gives you a strong why for hitting your revenue goal because you’re really clear that if you hit that revenue goal, that’s how much you’re going to be paying yourself. And that’s really motivational to know exactly where your profit numbers and what your owner’s pay numbers are at every single month of the year.
And you may not need to hit 100, 000 or hit seven figures, whatever that goal is that you randomly threw out for next year or that you’re randomly thinking of or you randomly think that you need to achieve next. Maybe you only need to earn 90, 000 or maybe at the end of the day, you actually need to earn more based on how your business operates to be able to pay yourself more if you’re randomly guessing or just increasing your revenue goal every year or not taking the time to think about your business budget and what you want to invest in in your business in the next year, it’s literally impossible for you to know how much you need to make. So the first step really is setting intentional financial goals for your business and breaking them down so you know exactly where your numbers are at and where that money is going to go.
I also, in the template, and again, you can grab the free masterclass if you want the exact template I use, encourage business owners to set good, better, and best revenue goals. So when we’re talking about enough, that’s your good goal. Like, how much do you need to hit your baseline goal for next year to double your profit?
What does that look like so that you’re paying yourself a decent wage? That’s your good goal, but then it can go up from there. Just understanding what type of business you want to build and where you want it to go. You can set good, better, and best goals so that you can see like, yes, this is my good for this year, but ultimately, what would my best revenue goal look like?
What would my best profit goal look like? And start thinking even now. What is it going to take to get your business to the next level? Because it’s never too soon to start thinking about that. But start with what’s enough and start with clear financial goals for this year.
Okay, and then step two, once you have that magical number, you have to break down how are you actually going to reach that financial goal, right? Are you able to hit your profit first revenue goal based on your current offers, your current pricing, and your current capacity, or does something need to change?
And your capacity is based on how many hours a week you have to give to client work, not how many hours a week you have to give to work and your business total. And I think a lot of business owners misunderstand like, oh, my capacity is just 52 weeks a year times 40. That’s how many hours I have to give.
And that is definitely not the case. That doesn’t take into account vacations. That doesn’t take into account all of the other things that you have to do to keep your business running, marketing, special projects, all the admin work. So we’re really looking at your capacity based on how many hours per week and how many weeks per year do you have to give to client work. That is your annual capacity when we’re talking about breaking down your revenue goals because those are the hours that you’re getting paid for, right? Nobody pays you to do marketing. Nobody pays you to do admin work, doing more of that stuff only leads to more money if it leads to more clients, which leads to you serving clients with your time typically, right?
So in breaking down your financial goals, you’re really breaking down what is your capacity for client work? What are your current offers and your prices? And how much money can you make starting where you’re at? What is your max capacity? And your max revenue that you can make if you are fully booked at your top prices based on what your current offers are at this point.
And this is where many of my clients have realized that their revenue goals are physically impossible based on their current offers, pricing, or capacity. And if you don’t stop for a second to double check your strategy for reaching your revenue goal, you’re going to spend an entire year banging your head against the wall thinking that the problem is that your marketing is off or if I could just get a few more clients, then this would work.
And this is where shiny object syndrome can also come in, because when you’re not clear on what you need to do to reach your goal, it’s easy to start throwing spaghetti at the wall and just hope that something sticks and moves the needle. But you’re busy and hoping something will stick and just scrambling for more clients is not a good strategy.
So here’s what we’re going to do instead.
First, set your goal for how many hours a week you want to work and adjust your offers and pricing to allow you to hit your goals within your working capacity. So if your offers and your pricing and your capacity are not allowing you to hit your revenue goal, the first step is to tweak your strategy, your offers, your pricing, and figure out how you can package what you’re really, really good at so that you can hit your revenue goal within your current capacity.
And for many of you listening, you may have hit the point where you cannot increase your prices any further. You’re at your max. You’re also at your max capacity and you already know what you’re really good at. And so, in order to scale your business, you’re going to have to do something different.
You’re going to have to either come up with a scalable offer or a scalable model. And when I’m talking about scaling your business, it happens in different phases. And people come into my coaching program in many of these phases. But the first phase is to choose your niche. And by niche, I think people assume that that has to be super pointy and super specific. But what I mean by choose your niche is clarify what you want to do and the work that you’re doing in your business.
So oftentimes when business owners are just starting out, they’re trying a bunch of different things, right? Like when I started in photography, I was trying every different type of photography. I was doing families, weddings, products, brands, headshots. I did it all before I niched down into brand photography and within brand photography, I was still doing a few different things, but I was a brand photographer. I knew my niche.
When I moved to coaching, same thing. I had to start out trying a lot of different things. I was doing Dubsado setups, I was doing ClickUp setups, I was doing one off coaching sessions, I was doing strategy sessions and branding sessions. I was trying every type of coaching and helping people with any problem that I could help them with. And ultimately, that led into me packaging my expertise into the coaching program, which is the one thing that I do now, it’s not done for you services, it’s business coaching. And so in phase one, you do have to get to that point where you know what you’re doing, who you’re serving, and what your niche is, what you’re the expert at.
Once you’re done with that, then it’s a lot easier to scale because you’ve already decided what type of business you’re going to scale. So phase two, you’re productizing your services because custom services where you’re doing something different and have a different workflow for every single person and every single client who comes into your business, that is very time consuming and it’s not very profitable. So phase two is to really perfect and productize and systemize your service. And part of phase two is also increasing your prices because as you’re putting those systems in place, as you’re getting more experience doing that same service over and over again, you’re getting really good at it.
You are becoming the go to expert and your client experience is seamless. And people definitely come into my coaching program at this phase where they know what they’re good at and then the next step is to productize and systemize their service and build upon that reputation and become the expert in their industry.
That is phase two.
But again, That’s only going to get you so far because you’re still serving clients where it’s taking you more time for every single client, right? And there’s going to be some point in your business where you’re going to hit your max capacity. And that’s where most people come into my program when they’re ready to fully scale their business.
And that’s phase three. So in phase three, you either need to create a scalable offer or move your business to a scalable model, there’s only two choices there. If you want to uncap your earning potential and in my program, I help them figure out what that’s going to look like so that it feels good to them.
A lot of people think about scaling and are just like, I don’t want to hire employees. I don’t want a complicated business. I don’t want to have this huge overwhelming beast of a business that takes up even more of my time. And that is not what scaling is about. Scaling is about backwards planning, what your goals are and what your vision is and what type of role you want to have in your business and creating a custom plan for you to either scale with your offer or scale through your business model.
So again, we’re in step two, where we’re figuring out how to break down our financial goals, our profit first goals, and what to do to actually reach them. So going through those phases of scaling your business is definitely part of this, but ultimately, that leads you to create your strategic plan.
Actually breaking down step by step. This is my revenue goal. It’s going to cover all of my expenses for the year because I know exactly what I want to invest in every area of my business. It takes into account how much I need to save for tax savings. It takes into account how much I need to save in my business. It takes into account how much I need to pay myself every single month. This is my goal. I’ve already broken that down into my offers and how I’m going to do that. Now I need a step by step plan. And a strategic plan is basically breaking down your revenue goal on an annual basis and figuring out what you need to do in terms of special projects that you’ll need to do because especially if you’re at that scaling point, creating a new offer or switching to another business model, that takes time and that takes a lot of small actions that are going to add up to big changes in your business.
And it can be really overwhelming if you don’t break it down, but once you do break it down and have that step by step plan, I promise you, it’s easier than you might think it is. It just takes consistent action. And then the second thing is a marketing plan. So especially if you’re making major change in your business or the structure of your business.
Having a clear strategy for how you’re going to roll out those changes and how you’re going to bring in clients on autopilot and systemize that area of your business too so that you are able to work less while increasing your profit and paying yourself more.
So to give you a quick recap, we were talking about I’m going to be talking about doubling your profit while working less, and that’s only two steps. Step one is to get clear on your finances and set your profit first financial goals. And step two is to figure out how to break down your financial goals into a specific plan so that you know exactly what to work on day by day, week by week, month by month to really move the needle in your business. So before you go, make sure you grab the free masterclass linked in the show notes on doubling your profit while working less. So you can grab that exact template. It’s easy to use. It’s not complicated. Like I said, it’s the exact financial spreadsheet that I use to help my clients calculate their profit first goals. First thing in the program so that we can break those down into a really strategic plan.
And if you know that scaling is on your horizon next year and you’re ready to stop trading time for money, you know that in order to hit your profit goals this year, you’re going to have to do something different in your business. Check out the business edit coaching program.
I’ll also link the landing page in the show notes where you can learn more and submit your application. And I’m happy to. meet with you on a discovery call and talk through whether or not this is the right fit for you. So until next time business minimalists, take what you learned today and get 1 percent better this week.
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