By Gail Doby, ASID
CVO & Co-Founder, Gail Doby Coaching & Consulting & Design Success University
What are your revenue goals for your business? Are you aiming for a gross revenue figure, a net revenue figure, or a salary figure? Are you looking to make more money this year than you did last year? How do you know if you are going to hit your target?
One way of calculating anticipated revenue is to compute the value of your clients. Letâ€™s say your average client does $30,000 of revenue with you, and the profit for that client is $6,000 after the cost of materials and overhead for your business, but before your salary. How many clients do you need to meet your goal?
The average designer earns between $40,000 and $50,000 per year. If you divide your desired earnings by $6,000 (the average net profit per client), you will need about seven or eight clients minimum to reach your target.Â To net that amount, your gross revenue for the year will need to be at least $210,000 to $240,000.
This is a simple approach to determine a basic metric for your business, but it helps you to create your business plan for the year.Â If your average closing rate is 10 percent of all prospects you meet, then you will need to meet with 10 prospects to get one client.Â If you need seven clients next year to achieve your revenue goal, then you need to meet with 70 prospects.Â Divide that by 12 and you need to meet with about 6 prospects per month. Add one more if you are aiming for the higher figure.
Do you want to make more money this year?Â Here are your choices:
- Â Sell more clients
- Close a higher percentage of prospects
- Do more business with current clients
- Sell more often
- Increase the profit on your transactions
If you do just a little better on each one of these areas, youâ€™ll increase your profits and income dramatically.
Stop wasting your time talking with unqualified prospects, andÂ make time for the clients who value your services and who willingly pay you what you’re worth. Our Value Based Fees System is a powerful program that teaches you exactly how to increase your income, attract better clients and finally stop fighting for what youâ€™re worth.