The Simple Way to Set and Track Revenue Goals
I’m excited to share an approach to setting my revenue goals.
I’ve called it a bucket approach, a gap analysis, an “effective hourly rate” strategy…
…but in the end, it’s all the same simple concept.
Determine what your annual revenue goal is, break it into monthly “good, better and best” goals, and start playing tetris.
This works equally well if you’re a product-based creator or a service-based creator. The only difference is, product goals will be based on the price per unit TIMES units sold…and the service goals will be based on the rate per package, which should in turn be driven by your EHR, or effective hourly rate.
What do I mean when I say “play tetris”?
If you know what your goal is, and you have a set of products or services at different rates, you simply need to lay out all of the ways you can sell X to make Y.
There is one catch – in this approach, you have to be in touch with your numbers on a near-daily basis, because this data will drive your decisions.
Let me give you an example from my own business:
I have three distinct offers in my “done for you” service business:
–A high-ticket monthly package with a recurring subscription
–A medium-ticket monthly package with a recurring subscription
–A high-ticket one-time service with no recurring subscription
PLUS, I have a very low-ticket digital product that requires none of my done-for-you time.
My 1:1 services do NOT scale well. That’s just baked in. The digital product DOES.
So, at the start of each month, I know my goal. Just for discussion sake, let’s say my goal is $20,000. And let’s say my packages are set at the following rates: $5,000 / $3,000 / $2000 with a $20 digital product. These aren’t actually my rates – for those, you’d need to reach out to me, and I encourage you to do so! – but they’re nice round numbers that make the following math a bit more digestible.
If I have three already-booked clients at $5,000 each, I am already booked for $15,000. My gap is $5,000.
Playing Tetris, I could make by selling:
1 more $5,000 package
1 $3,000 package and 1 $2,000 package
3 $2,000 packages
250 $20 digital products.
Or…some other combo. As long as the sales add up to $5,000, I have a number of options. And from there, I can decide what the market is looking like, what my sales energy is feeling like and what I have the bandwidth for.
If I know my gap is $5,000 – I sell $5,000 in services or products. I just do. I don’t miss my goal very often, because I always know exactly what I can do to meet it.
When I don’t know the gap – when I haven’t played Tetris – I end the month short of my goal wishing I’d taken a day or two to actually sell.
By the way – there is one more layer to this.
I also set good/better/best goals.
Good typically means that I am hitting my lowest goal – the number that I have set as my bare minimum revenue to make the business sustainable and successful. I’m not excited about my good goal…but if I hit it, I’m also not disappointed. Good is fine. Good lets me keep going for another month.
Better is usually where I actually aim – it’s the goal I feel I should hit and that I can hit, if I use this approach. My better goals often change once a quarter. If I’m hitting “better” for three months straight, it’s time to aim higher and move my now-better goal to my future-good goal, and then raise better and best.
Best is a stretch goal – and when I have these months, I typically consider the extra revenue as “gravy.” Great to have – it’s extra spending money to sweep into my owner’s account, or it’s money I can put toward a new business investment – but not sustainable for every month.
This analysis is one I have used for nearly every client, and it’s one I use in my own business now.
It is simple, I promise…but if it doesn’t seem that way, I have put this into a special tool, which allows you to plug in your good, better and best goals, along with your products and services, and play tetris right in the calculator. Plus, you can track your ACTUAL revenue, right in the same dashboard, and see how you’re tracking toward that annual goal in real time.
I’d love for you to check it out.
Until next time…happy money making!