Welcome back to the Path to Predictable Profits series! In this nine-part series, I’m sharing my best strategies to help you grow your business to consistent $5K, $10K, and even $15K months without overwhelm or burnout. If you’re just tuning in, then you might have missed the previous posts in this series. I recommend reviewing those first:
1: How to Start a Business (And Get Paying Clients ASAP)
2: What to Focus on FIRST with the Ultimate Business Growth Checklist
In this episode, we’re focusing on the #1 strategy to ensure that you get paid each and every month in your business… even when you need to take a break from your business.
Have you ever found yourself with a family emergency, something that needed your immediate attention, and suddenly, you had no choice but to completely rearrange your calendar?
Or maybe you just want to enjoy a fun vacation without worrying about your inbox or your clients.
You love the idea of being able to take a week or two off throughout the year in your business, but the same problem exists: If you’re not working, you’re not getting paid.
I know that this is something that’s incredibly common, especially for those of you who are heart-centered service providers.
Maybe you’re a teacher or a coach or a trainer and you’re probably running your business by working one on one with clients offering services.
While that is a fantastic first step to get your business going, it can also create a bottleneck in your business where, again, if you’re not working, you’re not getting paid.
Today, I want to break down a really simple strategy that can start to free you from this dollar for hour trap that is not allowing you to take sick days or vacations… and start thinking more strategically about your business.
This is one small strategy that will help you to begin to get paid every single month in your business.
Not too long ago, I went to get a massage.
Now, I’m the perfect ideal client for a massage therapist.
I know the benefits of massage. I like to get massages on a regular basis, I invest in my self-care on a regular basis. Literally – a dream client for any massage therapist who wants to build a client base with regular, committed clients!
But when I was finished with that massage… they made a major mistake that I see all the time in the one-on-one service world.
All they offered was for me to book the next session.
AKA — they are only focused on selling one hour of massage at a time.
They didn’t offer any sort of massage therapy membership or package that would really address the underlying needs that I have and helping me stay healthy and pain-free on a regular basis.
This is a huge missing opportunity, especially for those of you in the transformational space, in the health and wellness space, or in the relationship space.
The honest truth is, when you make this shift I’m about to share with you, not only is it beneficial for you as the entrepreneur so you can start getting paid each and every month, but it’s beneficial for your clients because they see results.
You might be realizing that when your clients are only booking an hour here and an hour there, they just don’t get the results that they are hoping they for.
But when you shift your approach to working with you through a signature offer, it’s a true win-win for you and your clients.
Your clients will start to see those results faster because they have committed to working with you on a more regular, consistent basis.
And you, my friend, stop selling your services by the hour because you have an offer in place that ensures you get paid every month.
Let’s dive in to the Baseline Revenue Plan to help you get paid every single month in your business.
The first thing I want you to think about when you are mapping out this strategy is we have to do a little bit of number crunching.
1: What Is Your Take-Home Salary Goal?
How much do you want to make in your business?
If you were to go off and take a job with somebody else, you would have a very clear salary goal in mind. This is what I’m willing to accept or what I’m aiming for with my salary with paid weekends and vacations and sick days, etc.
A big mistake that I see from a lot of entrepreneurs is they assume their salary goal is their revenue goal.
This is not the case.
If you are running a business, you have to crunch numbers based on total revenue, not just your take-home salary!
The good news is we can easily reverse engineer this. I love the formula from this book Profit First by Mike Michalowicz.
For businesses generating under $250K per year:
50% Owners Pay
30% Operations
15% Tax
5% Profit
Once you have this formula, you can actually see that in order for you to achieve your salary goals, your revenue needs to be roughly double your desired salary. This is very eye-opening for a lot of people.
I find this breakdown so incredibly helpful because not only does it account for paying yourself a healthy salary – but it also accounts for the true cost of running a business. Even a low overhead business (especially if you have no employees or rent) has expenses! And when you don’t have a budget to run and grow your business, it’s easy to wind up not able to pay yourself enough.
2: Plan for Sick & Vacation Days
If you were to hire yourself, what kind of sick and vacation package would you be giving yourself as part of your salary package?
This is important! You wouldn’t take a job where there was no sick leave or vacation days, right?
It’s essential to consider this as you are creating your Baseline Revenue Plan.
Why? Because if you crunch the next numbers based on 52 weeks a year, then you are setting yourself up to work 52 weeks a year. Any time off from work means you don’t get paid. We are planning for you to experience paid time off!
Now we have your revenue-generating weeks per year:
52 Weeks Per Year – 4 Weeks Paid Time Off = 48 Revenue Generating Weeks
52 Weeks Per Year – 8 Weeks Paid Time Off = 40 Revenue Generating Weeks
3: Design Your Baseline Revenue Plan
Ok friends… I know we are crunching a lot of numbers!
But it’s so important to make sure that your goals line up with your reality… but here’s where you can make a big-time mistake in creating a predictable profit plan.
Let’s say your goal is $100,000 total revenue this year (giving you a $50K take-home salary, plus $30K to run your business, $15K for taxes, and $5K for profits).
It’s easy to simply think something like…
“My goal is $100,000 in revenue this year. It cost $100 to work with me, so I just need to make 1,000 sales to achieve that $100K revenue goal.
Oh my gosh, does that make anybody else freak out just a tiny little bit? The idea of making 1,000 sales is so overwhelming to me!
When I hear people who attempting to build their business based on dollars for hours, it makes me feel stressed out for them because they are always hustling for that next client to pay for that next hour.
Every single month, if your goal is to make a thousand sales a year, that means every single month, you have to be selling nonstop to sell 80+ service hours per month.
You have to become a sales machine!
You’re constantly hustling to fill your calendar each and every week. And when your business is based on this dollars for hours model…
… if clients cancel… you don’t get paid.
… if clients go on vacation… you don’t get paid.
… if clients stop showing up consistently… you don’t get paid.
This model does not work for most entrepreneurs.
It’s not getting your clients results because a one time session with you is likely not going to make a massive impact for them long-term.
One session with a personal trainer isn’t going to get me in the best shape of my life.
One session with a nutritionist isn’t going to help me improve my eating habits long term.
One session with a relationship coach isn’t going to dramatically improve my marriage.
This is not in the best interest of your clients and it’s setting you up for nonstop hustle! So how can we redesign the way that you’re approaching your business?
Instead of thinking about how much does it cost to hire you for an hour, I want to shift your thinking to how can you truly get the best results for your clients.
What does that look like? How much time will it take? What kind of commitment do they really need to make?
When you shift this from just being available for hire by the hour to now focusing 100% on the results that you deliver, you’re making a huge step towards delivering real results for your clients and making a shift towards more predictable profits in your business.
This shift will not only serve your clients because they’re going to see you more consistently and get those results, but you’re helping yourself because now you’re setting up a profit plan that gets you paid every single month.
Let’s look at some examples:
Goal: $100,000 Annual Revenue
Signature Offering: $2,500 6-Month Coaching Program
Number of Clients: 40
I love crunching the numbers on this because it’s so much easier to book 40 clients than to stress about filling 1,000 spots on your calendar! Instead of hustling non-stop, you’re focused on just making 40 sales and then spending the rest of your time getting those 40 clients to real results.
Now… maybe you’re thinking $2,500 is a LOT to charge! What does a program like this really look like? Let’s dive in:
This program is literally the exact one I created over 10 years ago when I was leaving corporate consulting and I was starting my business as a coach and business strategist for entrepreneurs.
I worked with entrepreneurs for 6 months, every other week, for 12 total client sessions. They could pay me $500 a month for those 6 months or pay in full for $2500.
I only needed 20 clients at a time (40 for the entire year), so I could easily see 10 clients on the first and third weeks of the month and the other 10 clients on the second and fourth weeks of the month.
It was a huge benefit for my clients because every other week, they had that touch-point with me that was going to hold them accountable and make sure they were taking the exact actions they needed to take in order to see their desired results.
It was a huge plus for me because I had 20 people at a time paying me at least $500 a month, generating $10K per month for my business.
And because I was able to manage my calendar effectively, it was easy to plan client sessions around vacation weeks and still get paid because my clients were paying me for a 6-month program instead of by the hour.
Ask Yourself: Do you have an offer for your clients to pay at least $500 a month and work with you for 6 months? What kind of results would they get if they committed to working with you for that level of service?
Goal: $100,000 Annual Revenue
Signature Offering: $5,000 Service
Number of Clients: 20
$5,000 means you only need 20 clients this entire year in order to achieve your revenue goals.
Some of you might be thinking, “Whoa, Rach, there’s no way I can charge $5,000 for anything. That’s way too expensive.”
I really want to push back on you with this because if you sit down and think about the value you’re providing, you might have a $5,000 offer that you could easily create that becomes the baseline for your business.
Maybe 6 months just isn’t long enough to get someone the results they are looking for and 12 months is the time frame they need to commit to for real results.
Maybe your clients need you on retainer to do work for them on an ongoing basis, so these 20 clients are each paying you $500 a month.
Maybe you offer a high-end bespoke service.
If you are a creative entrepreneur – a wedding photographer or website designer – or start thinking about this price point and how you can elevate your offering so that you only need 20 clients to achieve your revenue goal.
When you have people paying you for several months on end, they have committed to you the way that you have committed to them. You are setting your business and your clients up for long-term success.
I hope this gets you thinking about a few things. If you have been really struggling to get paid consistently, designing a product, program, or service like this is going to be a complete game-changer for you.
If you’ve been struggling to get your clients to commit to the work, then restructuring your offerings by being focused on the results and the accountability and the support they’re going to get will be a game-changer for them.
If you know that there is a new stage of your business that you want to grow, putting this piece in place actually starts to build a recurring revenue runway for you. It builds a monthly recurring revenue where you can rest easy knowing that your needs are met and your clients needs are met.
This has been part 3 of the 6-part series: The Path to a Predictably Profitable Business.
If you’re ready for that consistency, you’re ready to know that your business can support you and your lifestyle with ease, while also helping you do the work that you love – here’s a title summary of what this series has to offer:
1: How to Start a Business (And Get Paying Clients ASAP)
2: What to Focus on FIRST with the Ultimate Business Growth Checklist
3: How Designing a Baseline Revenue Gets You Paid Every Single Month
4: The #1 Mistake Keeping Women Entrepreneurs From A Predictably Profitable Business
5: Do You Have a LEAK In Your Predictable Profit Strategy
If you loved this series – you’ll love The CEO Collective! The CEO Collective is an online mastermind and mentorship experience designed to help you create more sustainable success. Get on the waitlist now!