How To Set Revenue Targets To Reach Your Business Goals
HOW TO SET REVENUE TARGETS TO REACH YOUR BUSINESS GOALS
Want to REALLY move the needle in your business?
Not "Yes but finances are soooo boring" kind of commitment but "Hell yes I'll do anything!"
Well watch this series of videos so you can be the bad ass CEO that your business needs and you can SET and HIT your business revenue targets every month!
And THAT means living your best life!
RESOURCES & LINKS MENTIONED IN THIS VIDEO:
Growth Rate and Revenue Target Calculator (shown on video) > https://shanphelps.com/lm-revenue-target-calculator/
DIY - Calculate your own growth rate > https://smallbusiness.chron.com/calculate-compound-annual-growth-rate-39629.html
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This is not something they teach you in how to turn your passion into profit school, but being able to set monthly revenue targets to achieve your business goals will be the difference between actually achieving your goals and just rehashing the same goal year after year.
And I’m going to show you a really cool tool which will do all of this in less than a minute. Stay tuned as I show you how to set your online business revenue targets so that you can reach your business goals.I’m Shannon Phelps and I help high achieving entrepreneurs scale their revenue and create a time leveraged business. We turn vision into a scalable action plan.
Now, before we get started in this video, why do we even need to set revenue targets?
Well, if you watch this video, then you will understand the importance of having a roadmap and a roadmap is a measurable and tangible target that we can use to create a plan so that we can reach these targets. And once we’ve created the plan and we’re taking action on it, then we’re able to measure the results of the plan and compare them to the roadmap to see whether we are actually hitting our monthly goals. So revenue targets become part of the roadmap. They guide how many sales we need to make, what sort of metrics we need. And it all starts with our revenue.As I mentioned, I have a really cool tool that will do all of these for you in less than a minute. But as with any tool or system, the more you understand it, the better the results will be. So I’m going to go through the four steps to setting and achieving your revenue targets.
Step 1 – Set Goals That Are Monthly
So the first step is to actually set targets that are monthly. So instead of setting that big 12 month goal of you want to make a $100,000 or $1 million a year, whatever that figure is for you, instead of having it as a yearly figure, you want to get to the point where you’re creating a monthly goal. So you might say that you want to be making $100,000 a month in 12 months. If you go and watch this video, it will help you understand why setting monthly targets are so important. And I guess with anything that we do in business, everything that we measure, everything that we forecast, usually when it comes to the financial aspect, everything is done monthly.So we need to make sure that we setting our goals as well. And you will understand that more as you go through the next steps.
Step 2 – Define Your Start and End Points
Step two is to figure out where you are now and where you want to get to. So how much are you making monthly now in revenue and what is your monthly goal revenue target. And then you need a start date when you’re actually starting to put this plan in place to achieve your goal. And then when do you want to achieve this goal by, so there’s four things there where you are now. So what is your average monthly revenue now and what is the start date? And then where you want to get to is what is the monthly revenue target that you want to be making and when do you want to be making this by? What is the end date?
Step 3 – What Is The Growth Rate You Need?
Step three is the secret sauce and it’s how to set monthly revenue targets using a growth rate.
So normally when we are trying to figure out how to achieve a goal, and if we take the yearly example, and that’s why this yearly example doesn’t work. If we wanted to make $120,000 a year and we decided that we’ve got 12 months to do it, then we most people would divide that by 12 and then they would have to make $10,000 every single month to achieve their goal. But as we know, how do you go from zero or 1000 or 2000 to 10,000 in less than 30 days so that you can keep on top of that goal every single month. If you could do it, you would have already done it. So what we need to do is make incremental progression in our revenue targets so that they are number one achievable.And then number two, also making sure that they’re heading towards our end goal. I’m going to jump over to my screen and give you an example so you really understand what our growth rate is. The best way for me to show you the growth rate is to give you an example. So let’s say that we wanted to grow our revenue by 10% every single month, and our starting monthly revenue is $1,000 so if we wanted to grow our revenue by 10% in the first month, then 10% of a thousand is $100 so by the end of the month, we would have made $1,100 in revenue because we’ve grown by 10% let’s look at month two. So month two we’re not looking at where we started, we’re looking at the month prior to that. And this is where we get compounding results. So in month one we made 1,100 so then we take 10% of that and that’s $110 and then we add that to our 1,100 and in the second month we get $1,210. So as you can see in the third month, we would take 10% of the amount that we made in month two and that would be 200 oh sorry, $121 and then our total revenue for that month is $1,331 as you can see, when we use a growth rate, we are incrementally building on our revenue and we’re making small progress every single month. Now, the reason that we’re doing this is because it is actually achievable. It’s much easier to grow 10% of your revenue than it is to grow 400% or 600% whatever that massive jump is from where you are to where you want to get to. If you were just to pick uh, an annual amount divided by 12, and then figure out how to jump that massive mountain to get there. This is where it gets a little bit tricky because when we’re just picking a growth rate, it’s really easy for us to calculate but we want to reverse engineer it. We want to say, I’m at this point here and I need to get to this point. What growth rate do I need to make sure that I grow every single month at this particular percentage to get to my end target? Now, I would love to be able to give you this answer in this video, but I’m going to point you to a link below because it is super confusing. I’m a maths head and it blew my mind, which is why I created this calculator so you don’t have to do it and this is a good bit because I am going to show you this calculator in action now and you will see how simple it is to work out not only your growth rate but then which would be step four.
Step 4 – Create Monthly Targets
Turning those in terms of monthly revenue targets who we are on my website, shanphelps.com and below this video you will see a link to sign up to use this calculator.But I just want to show you how it works and then you will understand the growth rate as well. So we’re just going to make it super simple and start on the first of the month in first of the first 19 and then our target date will be the 31st of the 12th 19 so as you can see, duration in months is 12 months. So you don’t only have to use this for a 12 month period, you can use this for shorter periods as well. So our current revenue, let’s just say we are at $1,000 and then our target revenue, we want to get to $10,000 a month by the end of the year. So, as you can see there, it has calculated that to go from $1,000 a month to $10,000 a month, we would need a monthly growth rate of 23.28% and then if you go down here, you can see that January it’s $1,000 because that’s where we’re starting. And then February we would, it would be 23.28% of a thousand and then we would add it to the thousand. And then it just keeps calculating and compounding. And as you can stay, see, it starts off with small incremental, um, revenue targets that you can achieve. It’s quite, it’s so much easier to go from 1000 to 1,233 then 1000 to 10,000 and even though this isn’t as glamorous and an end as exciting as that big windfall that we’re all hoping for, and just because we set this doesn’t mean that that won’t happen, but this is more achievable than just saying, I’m going to hit $10,000 a month this month. And coming up with these crazy plans. And just hoping and just putting it out to the universe and just wanting that to happen. This sort of growth is sustainable and it is achievable. Now that you’ve calculated your monthly revenue targets, copy and paste these into your own spreadsheet so that you’ve got them and then you can create a plan to actually achieve them them. That is how you set monthly revenue targets to achieve your business goals. They are measurable and they are trackable and they are achievable.