This is it! The final installment of our 4 part series all about MONEY! If you missed the first 3 parts I suggest that you go back and read them first. You can find part 3 here.
This is where we bring all of the past 3 weeks of learning together so that you can create really clearly defined revenue goals for your life and your business. Watch the video below as I walk you through how to work with free templates I’ve created for you (the links to download those are directly below the video).
If you’d like to read along with the video, we’ve included the transcript of the blog below.
Let’s get started!
So the very first thing you want to do is go to File, make a copy, and then save it to your own drive. Once you’ve done that, then you’ll be able to have full edit access to this. So this is a really simple calculator, basically any of the cells that are yellow, you can put figures in. You don’t want to touch anything that’s not yellow.
Step by Step Calculator
So the very first thing is the step by step calculator, so the first thing you want to put in here is the amount you want to pay yourself each month. This could either by all of your personal expenses, or it could be the amount of money that you want to provide your household towards business expenses. Whatever that is, you want to put it in here. I’m going to put $2500. The next thing you want to do is put all of your monthly business expenses in there. You want to sit down, make a list of all your monthly business expenses, add that up, and then put it in this cell here. Let’s say it’s $1500.
The next thing you want to do it put your tax percentage. If you don’t know this number, just keep it at 20%. You may want to ask your accountant. But typically 20% will be a good start for you. And then profit percentage, if you’re just starting out with profit first, keep it at 5%. If you see that your revenue goal is a bit on the high side for what you want to strive for in the beginning, you can change it to as low as 1% and that will bring your revenue goal down a little bit, but if you can, try to start at 5%.
Now you have a revenue goal. This is your average revenue goal to be able to hit your goals, so how can you check this? Well you’ll take this number, and you’ll put it down here. And that will show you exactly how your revenue is broken down. You’ll have $266 for profit, you’ll have that $2500 as you see up here for owners pay, you’ll have just $1500 for business expenses, and 20% of total revenue for taxes.
Every time you do this, you can just update it when you have a new scenario that you want to play with, and these are the percentages that you’ll use.
Working With Your Revenue Goal
Now you should have a revenue goal. This revenue goal is so powerful. Once you’ve put in your personal expenses that you want to pay for out of your business, you have your business investments, you have not accounted for tax and you’ve accounted for profit, you have a revenue goal that you can be confident that this is the amount of money that will allow you to pay for those things.
You have now just completed a beautiful self care regimen for yourself and for your money. Because you have gone from not knowing how much money you want to be making in your business, to have really good first step to making sure that you’re running a sustainable, profitable business. This process that you learned, you can do time and time again, and I encourage you to do it time and time again, because each time you do it you’re going to find new things that you either want to add in or take away, your priorities change, your values change, and also your business dynamics change. This is a really good practice to get into.
Take it Further
If you want to take this a step further and really dig deep and get this into a full framework using an envelope system called ‘You need a budget,” and you want to implement profit first fully and get into a routine and get accountability, I highly recommend that you check out my program Profit for Keeps. It’s an excellent foundation for you to be able to build a sustainable and profitable business.
Regardless, I want you to make sure that you take that revenue goal and paste it all over your house, in your car, in your wallet, I want it everywhere. I want it to be your password in the phone. This number will start to sink in subconsciously and different opportunities will come in and you will find all these new things that you can do to make that number.
So your next step now is to take that number and figure out what you need to change in your packages, what you need to change in your pricing, to start hitting that number so that you can start feeling confident with the prices that you’re offering your clients and the packages.
I look forward to seeing you in a future podcast or video, and I want to thank you so much for your time and for going through this. If you want to know more about me, you can reach out to Sweet Life, Purposeful Money on Facebook and we have an amazing supportive community in there.
ABOUT THE AUTHOR
Amber Dugger, founder of Profit for Keeps, helps health coaches and service-based online entrepreneurs sort their money headaches and increase their profit potential. She thrives on encouraging and empowering others in achieving clarity with their numbers and discovering the true purpose behind their money goals. She is a certified health coach from IIN and worked in corporate finance for 15 years before venturing out on her own in 2015. She is a mastery level Profit First Professional and loves reverse engineering the Profit First system and combine it with a powerful cash flow tool called YNAB (You Need a Budget) to make it easy to understand and implement for solopreneurs.
Amber is a featured speaker at The Wellness Business Summit being held in Toronto in June 2019. Be sure to grab your tickets for this life changing event here.