Set Your Business Goals By Working Backwards

Day 4 of the Mini Business Challenge

If you are having a difficult time defining your financial business goals, I would suggest you work backwards. Once you have that BIG, ultimate goal its easier to break it into smaller, on point tasks. 

Begin with a money goal. It helps if that goal has a meaning beyond the dollar figure. For example, lets say that I want to buy a new car. The payment is around $400. Taking into account for things like taxes, insurance and perhaps a warranty, it could be more.  So lets say we  bump the goal up to $600. In other words, I need to add an extra $600 (or more, because more is always better) to my monthly bottom line. Once that is done and I am seeing that level of income on a regular, consistent basis, I’m ready to order my new car, yeah?

The next step is pretty simple, once I know how much money I have to make, I can start to think about different ways to bring it in. I could find more customers, or add to my existing products. Also I could create more products to sell. But I need to figure in price points and gross profits as well.

For example, if I have a $10 eBook, I would have to make an extra 60 sales per month. From there I can work backwards. If I know that on average one out of 10 email subscribers buy the book within the first month of signing up. (We learned this from the data, remember? Click here to read about what data your business should be collecting.)

 I need to add 600 new subscribers to my list, which in turn takes 4,000 new visitors to my site. If that is my plan, I know that my daily to-do list needs to include plenty of action steps to ramp up my traffic by an extra 4,000 people per month. (Which is do-able, by the way.)

But that is not my only option. I could also create another information product or eBook each month and sell it to both my existing and new subscribers. I could also create a higher priced item. If so, I would need to make a lot fewer monthly sales to reach my $600 goal. For example, if I create a nice $100 product, it would only take 6 sales per month to pay for the car. 

Since the car payment will be an ongoing thing, it also makes sense to look into recurring payments. This could be my own membership site, or I could look into affiliate offers with recurring commissions. I could also raise my prices on existing services and products to bring in extra cash each month.

After I know my goal (extra $600 a month for a new car) and pick my approach; (adding products) it becomes a lot clearer.  Now I have a concrete goal to work towards. 

Because I really want that new car, I’m going to be motivated to get it done and grow my business by that extra $600 per month. In fact, chances are great that I’ll overshoot the goal by several hundred dollars! #Win!

Now, take this formula and apply it to your business. What financial goal are you shooting for? Once you understand how much extra you need, consult the data you are collecting to find the best approach to raise the money.  It can honestly be that simple, once you understand this approach!

See you tomorrow when we discuss the next step in making your business dreams for 2019 reality.


Speak soon!
Sarah

Read: Day One (Video)
           Day Two
           Day Three
          This is Day Four