Everyone has been to an ATM. We all know how it works: you walk or drive up, you give it your information. You don’t just tell the machine you want “some” money, you tell the ATM exactly what to give you.
That same precise request-making is what allows your business to give you what you want.
The clearer your goals, the greater your chances of achieving them.
Before we get to your personal goals, let’s see how much cash it takes to keep you in business. Root around in your banking statements from the last three months to find every expense that doesn’t go away from month to month: monthly services and subscriptions, paying your virtual assistant, business insurance, liability insurance, accounting, rent, supply costs, and anything related to keeping your online presence running.
Divide three months’ total by three to determine your average cost, and voila! You now know exactly how much it costs to stay in business. This is the bare minimum you have to earn, and it’s deducted from your business bank account before you bring home a paycheck. (Your iPhone has a calculator. Your statements are online. You can do this!)
For the sake of our example, let’s say this is $800. Let’s round it up to $1,000 so there’s a little cushion.
If you’re aiming to get all of your bills paid by your business, you’ll need to know exactly how much money you need to make. Add up all your personal expenses – rent or mortgage, electric, water, sewer, heating, internet, TV, phone, car insurance, gas, life insurance, health insurance, any other insurance, groceries, subscriptions, childcare, toiletries and necessities, and Netflix – from the last three months.
Now, divide the total of those personal expenses over the course of three months by three.
You now know exactly how much you need to earn to keep your personal life afloat.
To get your business making you that much, you’ll have to multiply your needed monthly total by 1.3 to account for setting aside tax money.
For example. If you need to spend $3,500 a month, you’ll need to bring home $4,550 and set aside $1,050 for the tax man. You’ve also got to earn $1,000 to keep your business running each month. That means you’ll need to be making $5,550 to bring home the bacon.
Psst! Want me to break this down in even greater detail for you? Go find your Enough Number.
Knowing how much you need your business to make each month allows you to work backward for your marketing calendar.
Let’s keep going with this example. If you’re currently booking $600 gigs, you’ll need to book 10 of them to meet your needs in the coming month. That could be good news (yay, you’ve already booked 9!) or bad news (2 booked, ramen noodles imminent.)
With the numbers clearly laid out, you can see exactly how much hustling you’ll need to do in the coming weeks.
Because you now know precisely how many spots you need to book, you can use your marketing calendar to proactively plan incentives, cross-promotions, sales, specials, or word-of-mouth referral promotions. By thinking ahead and marketing consistently, you’ll keep your calendar brimming with business.
You’re now armed with numbers. You can see exactly how much you have to make. You can work backwards to see how much work you need. And you can fill your marketing calendar accordingly. (Boom goes the dynamite!)
I know it’s tempting to hide behind hope, but facing the numbers is your first step toward making your business into an ATM. (And a damn nifty one, at that.)