Great reminder, though, that this all needs to ultimately link back to real numbers. Thanks!

mark

The time you spend producing whatever is generating the income stream. For instance, writing an e-book may take a while but once it’s done, it’s done. You continue to sell the same e-book with little or no effort, over and over. Consulting, on the other hand requires constant investment of time while you’re earning the income, as do classes. You need to consider how many e-books you could write during the time you spend consulting or how many additional web site subscriptions could you sell if you spent the same amount of time promoting your site and keeping it fresh as you spend teaching.

Keeping your investment of time in mind would help maximize the profit while minimizing the effort. Expending minimum effort for a given profit allows you to investigate even more profit streams and have the time to exploit them. It also lets you maximize your free time for doing other things you enjoy (you remember, your life outside of work) … while making the acceptable income that allows you to enjoy those “other things”.

Seriously, how or why would I think that I could sell, say, 20 monthly teleclasses? Or 37 copies of an ebook? Or whatever.

The strategy is a great strategy – if the numbers make sense.

But how do you know when the numbers make sense, and when the numbers are merely wishful thinking?

—

Great questions Stephen (and follow up with Deb)

Obviously, the missing info in this quick summary of revenue projections is:

1) how carefully you have researched your market
2) how specifically you have developed your niche so that you are sure you are providing useful services and products to those who have a need for them and can afford to pay for them
3) what is your robust marketing machine to drive these revenue numbers. These are things like speaking engagements, ezine list, blog, mailings, PR, teleclasses, etc.

If you have these things in place, you are much more likely to reach your targets. But the whole thing is a process of experimentation. So you may set out to get 3 new coaching clients a month and find that that number is too aggressive. Or you try to sell your e-book and find that the price point is too high, so you change it and amp up your marketing efforts by creating a joint venture with a partner with a lot of clients in your target market. Marketing is the key to driving sales.

To Deb’s point, I would just say that if you don’t take a stab at defining your revenue numbers, what are you basing your cash flow projections on? Without any specific numbers, it makes it hard for me to know how to focus my sales and marketing efforts. I have never been a button-down business plan kind of gal, but I do like to know that I can cover my expenses, and reach my revenue goals each year.

This could be a case of “whatever works.” Different systems and strategies jive with different people. If this one doesn’t work for you, toss it out and try something else. Whatever you do, try to get concrete about how much money you want to make each month or year. Otherwise, you will be blowing around in the wind.

Thanks,
-Pam

I am pondering blog posts on these topics … stay tuned for more info.

The “what to charge without feeling like a greedy arse” is a tough one for many people!

-Pam

I’m having trouble raising my prices on the services in my art business that are selling — such as children’s piano lessons. I need to do this, since some other goods/services (like my massive oil paintings) aren’t selling. Everyone I talk to says $15/lesson (my current rate) is far too cheap. The market standard in my town, supposedly, is $30/lesson. But I love my students, I love how much they’re learning, and I believe this service is foundational in children’s educational development and should be accessible to everyone. Moreover, I would be heart-broken if I lost a single student over a rate change.

I am a horrible businesswoman when it comes to collecting the money. How do you raise your rates when you don’t want to lose a single customer? Isn’t there always an element of risk or potential loss in such a move? How do you minimize it?

Thanks,
Katelyn

This little method perfectly embodies the great Jay Abraham’s dictum: There are only three ways for you to increase revenenue:
1) increase your number of customers
2) increase the averages size per sale (including raising your price)
3) increase the number of times clients return and buy again. (From Chapter One of his book Getting Everything You Can Out of All You’ve got – you can read it online at Abraham.com)

If you get creative in thinking about how to do those three things (in particular the last two), you’ll be surprised by what opportunities you find.

Mike