Is your revenue goal high enough to pay yourself properly and invest for your future?

If I asked you right now, “Is your revenue goal high enough to pay yourself properly and invest for your future?” could you give me a confident answer? If you can’t, don’t worry you aren’t alone. And if you could answer the question, but would be embarrassed to say it’s only enough to pay and you haven’t been investing, again you aren’t alone. Most business owners, especially those running a lifestyle business, are focused on what their business needs to make in order to pay themselves, but very often they forget about investing for the future. Keep on reading to find out how you can answer “Is your revenue goal high enough to pay yourself properly and invest for your future?” and what you should do if your revenue goal doesn’t take into consideration paying yourself properly and investing for your future.

 

 

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IS YOUR REVENUE GOAL HIGH ENOUGH TO PAY YOURSELF PROPERLY AND INVEST FOR YOUR FUTURE?

 

How most business owners set their revenue goal

 

There are a few ways business owners set their revenue goal.

 

Firstly, there are the business owners who choose a number at random. It is usually a nice round number that feels good. Secondly, there are the business owners who look at what revenue they made last year and then will just add a percentage. Thirdly, there are business owners who try to be more thoughtful in their approach. They’ll think about what they want to be able to pay themselves, consider the expenses they need to pay in order to run their business and then choose their revenue number based on that.

 

Business owners who take the third approach are doing the right thing in essence. The problem is that very often when they think about how much they want to be able to pay themselves they just consider their current living expenses, rather than thinking what they need to be paid in order to live the life they want now, and ensure they’re investing for their  future.

 

How you should be setting your revenue goal

If you want to set a revenue goal that will enable you to pay yourself properly and invest for your future, you’ll want to consider the following.

 

Number 1 – Your business expenses

How much does it cost to run your business? At this moment in time don’t include paying yourself). Understanding exactly how much it costs to run your business each year is key. Sometimes online service providers can feel as if it doesn’t cost much to run their business, and in comparison to having a building the costs are low, but they are low not non-existent. And they can quickly add up. So take the time to go through your expenses and understand exactly how much it costs you to run your business each year.

 

Number 2 – What you want to take home

How much would you like to pay yourself each year? This figure may be very different to what you’ve been paying yourself in recent years. But get really honest about what you should be paying yourself so you can live the lifestyle you want.

 

Number 3 – Your investment figure

This is the bit that most business owners aren’t considering and that is how much they should be investing each year. At this moment in time, you don’t need to think about how you are going to invest it, but how much should you be investing. This number will depend on how much you want to retire with, how much you’ve already got invested for later life, how old you are now and what age you’d like to be able to retire.

 

Once you’ve got all three numbers, you are in a much better position to be able to work out what your revenue goal needs to be to ensure you pay yourself properly and can invest for your future.

 

MAP OUT INCREASING REVENUE, GROWING YOUR BUSINESS AND ENSURING YOU ARE MAKING ENOUGH MONEY FOR A NICE LIFE NOW AND IN THE FUTURE.  My Strategy Day are designed specifically to help business owners achieve their most important goals over the next 12 months. Together we can work out EXACTLY what amount of revenue you need to make in your business and then map out what that mean in terms of offer suite, pricing, marketing, sales, operations and more. All you have to do is set aside a day, you’ll have me as your planning partner, and I’ll guide you through my signature annual planning framework that guarantees by the end of the end you’ll have a clear roadmap to achieve your goals and be excited for the year ahead. For all the information and to book a Strategy Day click here.

 

 

Setting your revenue goal depends on how you decide to invest for your future. 

 

Once you’ve got all three numbers, you’ll need to decide how you plan on investing for your future to be able to reverse-engineer what your financial goal should be.

 

Remember that this is not financial advice. I am not a financial advisor. The options available to you will depend on where your business is located and your business structure. 

 

Option A – Pay yourself enough to cover your current expenses and invest for your future. 

Option A is based on the fact that you are going to personally investing for your future. Therefore, you the amount you want to pay yourself will need to increase. You’ll want to think about how much you want to invest per year and how much you need to per year for living now. You can add those numbers together and that will represent the number you want to have after paying any taxes. This will mean you can then reverse engineer how much you actually need to be paid by your business. Then you can take that number and taking into consideration the expenses of the business, and any business taxes,  calculate up with a new minimum revenue goal for the business.

 

Option B – Invest for your future via your business

It may be that you have the option for your business to directly invest for your future. In this scenario your minimum revenue goal will then be based on ensuring it means you have enough for expenses, paying yourself anf investing for your future.

 

What to do with your new revenue goal, which is high enough to pay yourself properly and invest for your future?

At this point you should have a revenue goal that is high enough to pay yourself properly and invest for your future. You’ve properly thoughts about how much money you need per year for living, how much money you should be investing per year, and then worked out based on your business structures and taxes what your business needs to have as a minimum revneue goal.

 

That minimum revenue goal might be a lot higher than the revenue you have made in the past years. It might feel unrealistic for you to make that revenue goal in the next 12 months. If you find yourself in this situation it’s time for you to have a proper think about the future of your business. Does your business have the potential to get to that level of revenue based on your current offer suite and pricing, or do you need to think about a business growth strategy? Or does it feel as if your business could never reach that level (or you don’t want it to reach that level) and you think to think about investing for your future via a different means?

 

It’s not uncommon for there to be a gap between what your business has been making to date and what revenue it would need to make to enable you to be properly investing for your future. But the important thing is to be fully aware of what realistically your business needs to be making and then see if you map out how to increase revenue even if it takes a few years to get there. If you can’t see how to increase your revenue to meet that new minimum goal you’ll need to have a serious think about if the money isn’t coming from your business how are you going to ensure you are properly investing for your future.

 

GET ONE-TO-ONE MENTORSHIP TO SUCCESSFUL INCREASING REVENUE SO YOUR BUSINESS CAN PROPERLY SUPPORT YOU NOW AND IN THE FUTURE If you’ve got to considerable increase your revenue so you can properly invest for your future you might be thinking “How can I make this happen?”. Having the strategy might not be enough.   That’s why I also offer one-to-one mentoring where year I’ll help you create the business growth strategy for your higher revenue goal, but it goes beyond that. You’ll get ongoing support and accountability so your increase revenue goal becomes a reality. I’ll be by your side every step of the way to help ensure you are thinking strategically, taking intentional action, analysing your business’ performance and ensuring your revenue goals are achieved. Your business can only grow as much as you do. With my by your side, both you and your business will grow. For all the information and to apply (I only take on a limited number of 1:1 clients at any time) please click here.

 

 

 

That’s it. You now should be able to answer “Is your revenue goal high enough to pay yourself properly and invest for your future?” 

 

Your business should be supporting you to live the life you want now, but also ensure you are properly investing for your future. Even if you don’t think you’ll want to ever retire you don’t know what will happen in the future and ensuring you have sufficient investments (or an alternative financial plan) is key.

 

Hopefully by reading this blog post you now have a better understanding of exactly how much your business needs to be making as a minimum revenue-wise to ensure you can pay yourself properly and invest for your future.

 

If you are serious about hitting increasing revenue, paying yourself properly and investing for your future six-figures, I’d love to support you.

GET THE BUSINESS MENTORSHIP TO BUILD A BUSINESS THAT PROPERLY SUPPORTS YOU NOW AND IN THE FUTURE. My one-to-one mentoring will give you the strategy, support and accountability so your new revenue goal becomes a reality so you can enjoy life now and rest assured knowing you are looking after your financial future too. I’ll be by your side every step of the way to help ensure you are thinking strategically, taking intentional action and analysing your business’ performance so you can keep on optimising. Your business can only grow as much as you do. With my by your side, both you and your business will grow. For all the information and to apply (I only take on a limited number of 1:1 clients at any time) please click here.