Finance expert Pamela Capalad gives some small business tips for reaching those revenue goals!
When people think of personal financial planning, it’s all about spending less and saving more. Although we feel like we have most control over money that’s already in our hands, worrying about the money we already possess has its limits. There’s only so much less you can spend and so much more you can save.
The act of increasing your income often feels controlled by someone else, whether it’s a boss, client, or customer. However, the potential to earn more income is as important as managing the dollars you already have – growing your income will have the biggest impact on your financial success.
With that in mind, below are some steps you can take to start focusing on systematically increasing your income in 2016:
1. Create a 12-month cash flow projection
As entrepreneurs, we have to get out of the mindset of imagining our income as month-to-month. Income ebbs and flows each month depending on marketing, holidays, the weather, almost anything really. A true way to gauge how well your business can perform is to project your potential income for the next year.
This is where a 12-month cash flow projection comes in. You can download a sample template here, but the basic premise is this: you record the income you expect to receive on gigs you already have, products you expect to sell based on past sales, and other income sources you can probably count on.
Then you do some goal setting and stretch your sales projections to what you believe you can grow to. Yes, this exercise can feel like guessing and yes, your wishes may or may not come true, but by putting numbers down to paper, you give yourself a concrete amount to strive for. Your resourceful brain will find ways to get to that number.
2. Break down big goals into smaller ones
Putting together a cash flow projection also allows you to break down big numbers and big-picture goals into measurable steps. Your decisions will be based on manageable and tangible goals that you can carry with you each month.
If you want to sell 1,000 units of something in the next year, that’s only 83 units a month. Also, it’s not a big deal if you only sell 75 units one month because you know you can make up for it by hitting an extra 13 the following month (and you can plan for that). This adjustment may involve running a sale, increasing your marketing, changing your marketing plan, or adding an extra salesperson.
3. Ask for a raise, or raise your prices
Whether you still work a day job or you work for yourself full-time, don’t be afraid to ask for more money. If you’ve never asked for a raise before, it’s terrifying and thrilling at the same time. Just keep in mind the worst that can happen is you are told “no,” and really that just means “no, not right now.” If you need some tips and strategies for how to ask, you can listen to this podcast episode on the steps you can take to prepare for the raise conversation.
Raising your prices can feel a little trickier. The best way to gauge customer reaction is to experiment – if customers are willing to pay more, you might have room to raise you prices. You want customers to place value on the amount they are paying you. Otherwise, you might find yourself competing with similar products on price alone. Differentiate yourself through quality or loyalty to your brand, and you’ll find it easier to charge more.
4. Supplement your income with side hustles
We’ve talked about this before, but diversifying your income is one of the best ways to truly be financially secure and independent. Part of this equation involves building or creating side hustles, especially as you’re trying to grow your main business and barely breaking even in some months.
Make sure the side hustle you choose doesn’t take too much of your time away from building your business. Focus on the side hustles that relate as closely as possible to what you are already doing. By pursuing income streams that relate to your business, even indirectly, you might find that your side hustles are just as viable as your initial business idea and that it might make sense to merge them.
5. Put yourself out there (in small ways)
This can be the hardest part for most of us. You’ve made your plans, you’ve put together your projections, and you’ve decided what you can do on the side. Now it’s time to actually tell people about what you’re doing. Gulp.
Yes, you will need to step out of your comfort zone as an entrepreneur, especially if you’ve never considered yourself a salesperson, but approach this daunting task one step at a time. Here are some simple ways to start putting yourself out there:
- » Reach out to friends and family by sending them an excited email
- » Post one or two things about your new venture on social media a few times a week
- » Leave comments on blogs or websites with audiences that would enjoy your product
- » Reach out to influential bloggers to offer product samples or contribute guest posts
- » Find local networking events in your city and commit to attending a few per month
6. Tie your goals to actions
Results-oriented goals are good for tracking purposes, but often detrimental for motivation purposes. If you are focusing only on producing numbers, you might be imposing a lot of pressure on yourself to hit far-fetched targets each month. You might also feel loss of control. One of the best pieces of advice I got from my business coach was to tie my goals to actions.
For example, instead of focusing on the result of how many bloggers respond back to you, instead make your goal to reach out to 10 bloggers a week. The responses are out of your control, but you can work your own actions in your favor. If you decide to attend a networking event, commit to speaking to at least 3 to 5 new people. Five solid conversations could translate to one promising lead. I met someone at an event who introduced me to someone else that landed me on a panel of financial experts. By turning your goals into actions, results will naturally follow.
Pamela Capalad is a Certified Financial Planner™ and founder of Brunch & Budget, a financial planning service that makes talking about your money less scary and more delicious. She loves helping entrepreneurs and freelancers streamline their financial lives so they can focus on growing their businesses.
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