Use simple math to make your big goals attainable

Every business owner wants to earn big money. We want to be self-sufficient through our business and achieve far-reaching goals. I regularly have conversations with my clients about what they want to achieve in the next twelve months. Typically we go through this process toward the end of the year in preparation for setting goals for the new year. 

We hit on the revenue growth desired or the team member retention or even the vacation days desired. Goals can be anything if they are going to motivate you to move forward each day.

The challenge with some of the goals business owners set for themselves is they are big and lofty and can become demoralizing when seen as large and hard to achieve.

However, when you break down the goal with data, suddenly what seemed super challenging is a weekly or monthly number that is realistic. 

Here are a couple of examples to help you think about different ways you can break down your goals into achievable data points.  

Goal 1: You want to take three weeks of vacation

Your concern with this big goal is the lost billable time (read revenue) from you being out of the office three weeks of the year.

You deserve three weeks of vacation. You have been working hard. This is a good goal. Now you need to figure out what needs to happen over the other 49 weeks of the year so you can financially compensate for the billable time missed during the three weeks of vacation.

If you generate 20 billable hours a week on average, over 52 weeks of the year, that is 1,040 billable hours per year. There are two approaches you can take to this.

1. If you decide that 1,040 billable hours is the right number of hours for you to personally bill for the year, divide that by 49 weeks. That’s 21.22 billable hours per week. Simply add 1.25 billable hours to your weekly average and you will generate the same revenue. As the year progresses, look at how many billable hours you are generating each week. Are you trending at 21.25? If so, you are on track to take your three-weeks vacation! If not, determine what you need to do to increase that number.

2. Another option is to increase your rate to cover the lost revenue over those three weeks. If you average 20 billable hours per week, that equates to 60 hours of lost revenue while you vacation. If you currently charge $100/hour for 1,040 hours, you are targeting $104,000 in revenue. Reduce the hours by 60, and you have 980 hours to make $104,000. Raise your rates to $106/hour and you will be closer to hitting your revenue target with your three weeks vacation included.

Goal 2: You want to achieve $600,000 in revenue

Your concern over the big goal is that it is a big number and a huge leap from where you are today.

If you are confident you can generate the business to grow your revenue significantly, this is a good goal. Now you need to figure out what that looks like monthly or weekly, or in the number of clients you need, so you can know you are on track to hit that large number.

With $600,000 as the annual goal, you need to average $50,000 in monthly revenue. There are multiple ways you can look at how to achieve that.

1. You can use billable time as a data point to help you monitor and work towards $50,000 in revenue each month.  If your average bill rate is $200/hour, that amounts to 250 billable hours per month. Divide those hours among your five billable team members and you get 50 billable hours per month for each team member. Do you have enough business for the team to hit those numbers? Do you have enough team members that can put in 50 billable hours per month? Monitor the team’s billable hours each week or month and you will be able to see how you are trending your efforts to grow revenue.

2. Knowing how many clients you need to serve each month can help make your large growth goal feel attainable. If your average client generates $2,500 per month in revenue, you need to be servicing 20 clients per month. If you have 2 clients that generate 20% of your revenue, then you need 16 clients at the $2,500 level, while the two large clients cover $10,000 each month. Now you can evaluate your current client load and your pipeline to see how many additional clients you need to close each month to maintain 20 clients monthly. 

Every business has different numbers to monitor. Every business owner has different goals they want to achieve. The key is to apply some easy math to your goals to break them into attainable data points. When you have the data points that you can monitor and control week to week, you can track your progress as you go and be better positioned to achieve amazing things.