Design Your Predictable Profit Plan – Part 1
During episode’s 2 and 3 of the radio show, I’m exploring how smedium biz owners can design a predictable profit plan and sharing resources!
Key factors to a successful plan?
- “Pricing is the linchpin of your business” and we used a simple formula to analyze your prices:
- What are your expenses – monthly, quarterly, yearly?
- What are your salary/payroll needs? (How much will you pay yourself??)
- Based on your current rates, how much of what you sell do you HAVE to sell to cover that money moving out of your business?
- Do you have the capacity to handle that much work? Really??
If you don’t, maybe now is the time to consider raising your prices.
2️⃣ Business model
We talked about 2 strategies to jumpstart your business model:
- Use the Business in a Box model such as MLM, business coaching, or industry benchmarking to move rapidly into production.
- Use the Minimum Viable Product (MVP) model to decide exactly what platforms, processes, and people you will use to market, sell, and deliver.
If you’ll recall from last week’s episode, ERM=systems thinking for your smedium business, your ecosystem is a unified, interconnected system of platforms and processes for your people. Your ecosystem decisions correlate directly to both your bottom-line budget as well as your end-over-end capacity.
Show notes summary
Check. Understand that creating predictable revenue informs key business decisions throughout the year.
Think. The key strategy for creating predictable profits is to KNOW [KNOW know] your numbers and measure what matters (to you). Likes and follows are vanity metrics. Things like contracts, recurring service offerings, and engaging those that are actually engaging with you SHOULD matter.
There’s a link to the worksheet below – here’s how to fill it out and make the most of things:
- Input your known income
- Make some informed speculation about your unknown income
- What future programs do you intend to launch?
- When are you going to be working on building these programs?
- What revenue do I want new productized services to generate?
- There are pre-built calculations to tell us what our projections mean for our annual and monthly profits next year, so fill in the 3 additional boxes
- Your desired withholding for taxes and fees. This is currently set to 30%. An accounting professional such as @Kasfia Rashid can best help you determine what this should be for yourself.
- Your monthly personal compensation. To my mind, this should include finite personal expenses, incidentals, and personal spending goals.
- Your monthly business expenses.
Act. Copy the worksheet and get to work. Mindset isn’t my thing, but knowing exactly how many clients I’m trying to convert on a regular basis, helps to de-stress and focus me SO much.