BACKING INTO THE MONEY

We’re still in the Career category of the Building Your Legacy Series, so today is going to be fun! Why? Because we are talking about money and how to make it! This, perhaps surprisingly, is one of the most neglected conversations we see with women entrepreneurs. But we’re going to be clear here: Just because you “love what you do” or you are “so passionate about it,” doesn’t mean you should do it for free! And it certainly doesn’t mean you should take a loss! We are all in business to make money. Period. Even the non-profits need to make money if they want to keep getting their message/cause out there in a big way. Money buys that ability to keep doing what you are doing.

With that, straight to step one in your homework:

First, set the dollar amount of money that you want to make per year. What NUMBER will it take for you to do all the things you want to do this year? (It can change year to year, and remember what you have been spelling out in your legacy work leading to this. Are there vacations in there? Are there other expenses you committed to before we got to the “how.”?) Put that number on paper. Go as Big as you can while still being realistic for now. And do NOT tie this number to your current salary, unless you are truly beyond thrilled to be at that salary (that’s none of you).

So lets take $250,000 as an example (pre-tax). We don’t want you scraping by, but you pick your own number at, below, or above this example and do not let anyone judge or sway you. Now back down into what you need to make each month, week, day….

Example: $250,000/year @ 47 weeks of work (yes, our example has built in vacation time as priority)= $5,319 per week. That means, we will need to net more than $5,300 on average, pre-tax dollars.

That also means, we will need to net almost $1,100 each working day (5d/w) to bring home the bacon and meet our goal.

If you are selling pink fuzzy slippers at $10 a pop, you’ll have to sell a whole lot of ‘em to get where you want to go.

But, if you are selling pink fuzzy slippers at $10 a pop and you throw in spa party services for groups of 15 or more at $199/head…. now you are starting to make sense. See how you have to evaluate your current offerings to get the clear picture? And if you have that clear picture, its easier to consider how you will leverage or tweak what you already have.

Clearly, COGS and other expenses will vary from company to company, so we’ll let you do your own math on that. Salaried employees generally don’t carry that expense burden, but commissioned employees or contractors might. Entrepreneurs certainly do. The point is: back into your numbers so you can have a clear picture of the revenue you need to generate in smaller chunks.

So what if you are not generating it? Yet. We could teach on this for months on end, but here is the most important thing to consider: Multiple streams of revenue.

Now more than ever, one product or one service option doesn’t cut it because markets are too volatile. Why jump with a little parachute when you can leap with a big parachute, a safety shoot, a wing suit, giant crash mat, and some padding around your butt? And yes, you can still niche down and have multiple and passive revenue streams under one umbrella. But there is a right way and a wrong way to do this. If you grow too wide or too deep too fast, you’ll grow under. Here’s a video on how to evaluate, so watch this and then write out your next steps to what comes next in your product/service offering. That’s the last part of your homework today….make sure it serves your natural gifts and talents, and above all, your overall legacy that you are creating.

Hugs all around,
Aly & Andrea