17 Dec Create Your Profit Plan and Money Map
One of the best ways to stay on track and meet your income goals is to have a yearly profit plan and Money Map. This is what separates the struggling business owners who use a random approach with no strategy from the ones that really plan, set goals and deadlines and that make a really great income.
First let’s review how to build your profit plan.
- The first step is to set your one year income goal. Make it a stretch but still realistic. Now if you tend to think small it may need to be a big stretch to get you outside your comfort zone. But on the other hand if you are currently making $30,000 a year in sales and less in income, saying you want to do 500K in a year might not be realistic. But bringing your personal income to six-figures could be.
- Add up your expenses from last year. Say you made $30,000 in sales and your expenses were $6,000. That’s 20% of your sales. Say you want to make a personal income next year of $100,000. Well if your expenses are 20% you need to make $100,000 plus 20%. You have to have $125,000 in sales to take out 100K as personal income. This seems basic, but many small and solo business owners ignore these steps!
- Now set your sales goal which in the example above is $125,000.
- Now let’s make a Money Map to figure out how you will make your sales goal. List each product you will offer, the price and how many you can realistically sell each month. This is where you will need to begin to think big and think strategically. You can do this using a chart or mind map or in Excel.Deciding on your products and pricing: It’s always easier to do less sales of a higher priced product than to sell a big quantity of a low priced product. So it’s easier to sell 5 programs at say, $5000 and make almost $25,000, than to sell 1250 e-books at $20 each to make the same money! In the last lesson we worked on your Product Strategy. Here is where it comes in handy.Now make a conservative estimate of how many of each product or program you think you could sell per month. Or, if it’s recurring income, how many people would be paying you and at what amount per month. Do this for each product and program.
- Finally, adjust your graph until you figure out how you can meet your sales goal. You may need to add a program or increase product sales by working with joint venture partners to send you more clients. Once you have what you think is a realistic plan, share it with me a trusted advisor to be sure it’s a slightly uncomfortable stretch, but possible.
I’ve found that this plan needs to be somewhat flexible. Sometimes you don’t meet your sales goals and sometimes you surpass them. You may come up with ideas during the year to improve your plan or the products in it. But having a plan for exactly how you’ll make the income you want will focus you like a laser beam on what needs to be done each and every week.
Remember the Product Strategy Chart I gave you in the last lesson? Well here it is completed as a Money Map.
This client had made only $57,600 the year before. Note how creating and implementing the money map increased her income by over $100,000!
It’s easy to skip over this type of detailed planning. Excuses I hear are “I’m too busy around the holidays”, “I don’t really have any products”, “I don’t feel comfortable with planning around money”, “I’m just starting out”. These are all excuses. Remember that you are 100% responsible for the business and life you create. Committing to this planning will help you step into your power and that will be a huge leap forward toward your most cherished goals.
If you’d like expert help creating an exciting Money Map for next year, grab one of the limited time slots I’ve made available this month for a 30 minute business strategy session with me. Let me help you get clarity about what will move your business forward fast and how I can help you get those income generating projects done.