How to set (and reach) your microbusiness revenue goals

Posted on | August 21, 2008 | 1 Comment

Somebody asked me a question recently. They asked me, “What would it take for your business to reach $X in revenues within the next 12 months.”

No doubt you’ll think I’m as lame as I thought I was when I realized that I had never asked myself that question. Or at least, not in a way that forced me to get really specific with the answer.

Then, when I was doing some investigating into my own traffic, I came across this article I wrote a few years ago for the Online Journalism Review. And this caught my eye: ‘Many independent publishers have traffic that is worth considerably more than what they are current generating in revenue because they are focused on publishing information and don’t have the time to properly address the business aspects of what they are doing.’

When I saw that, I realized that I was reading about me (which, since I wrote the thing, was quite a surreal experience).

It really is fatally easy, especially when you’re a solo operation that doesn’t have to worry about things like payroll, to get so wrapped in producing what you’re producing that you don’t stop to ponder the notion that maybe you’re not making any money. Or at least, not as much money as you decided you wanted to be making when you first started doing this.

What is it they say about working in the business rather than working on the business?

Or, if you want to put it another way, the real difference between a hobby and a business is that, in a business, you really do have to spend at least some time and spare at least few a neurons to chase the money.

You should never be too busy for that. And it’s one of the more bizarre features of a microbusiness that many of us have to be reminded of it every now and then.

Even me. ::squirms with embarrassment::

Which brings me back to my first point. If you sit around with vague ideas about what kind of revenue goals you have, then your plans for reaching those revenue goals are going to be equally vague. So vague, in fact, that calling them plans is a bit of a misnomer.

No, this is the time for numbers. Numbers are good for business because they’re nice and concrete, and they sort of force you to be nice and concrete.

Not only that, when you use numbers to force yourself to get real, then you will often find that your goals are a lot more reachable than you might have thought before you stopped to think about it.

Think I’m nuts? Well, try this:

1. Set a revenue goal. Don’t be scared. You don’t have to settle for $25K if you don’t want to. It’s a goal; it should be realistic but it should also be a stretch.
2. Take a look at your various revenue streams and figure out what percentage of your total revenues comes from which source.
3. Now, use those percentages to figure out how much you’d need to make from each of them in order to reach your overall revenue goal. (no, you’re not done yet)
4. Once you have annual revenue goals for your various income streams, break that down further (divide by 12) to monthly revenue goals.
5. Okay, now that you have monthly revenue goals for each of your revenue streams, figure out what you would need to do in order to reach that goal — as in, “to make that much money, I need a minimum of 30 billable consulting hours per month” or something like that
6. Last step: figure out how to make that happen, how to get those billable hours or additional subscribers or traffic or advertisers or whatever.

And voila! You now have an Action Plan! It wasn’t even all that hard, was it?

Oh, one other thing: if you want the revenue to happen, you have to actually follow the plan. It does no good if it just collects virtual dust on your hard drive.

It’s nice if you love what you do. Just don’t forget that doing what you love isn’t necessary going to make you any money.

And, perhaps much more to the point, you have to do something about that if you want it to change.

And, still more to the point, the something you decide to do needs to be very specific and rooted in numbers. That’s what all the experts mean by concrete, measurable goals. When you give yourself that, you’ll be surprised at how much more possible it will seem than it did when it was a vague fuzzy idea in your head.

And all of that will probably make it a lot easier to get up in the morning.

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