Do you have a vision for your business? Creating that vision doesn’t have to be overwhelming. In this post, I will take you through five simple steps you can follow to build your business vision each year. And a note before we start – this method is designed for those who offer mainly one-to-one services or group programs to their clients. If your business is based on offering info products or courses without a ‘live’ element, you’ll need to follow a slightly different technique.
The process of building your business vision is a chance to have fun and get creative. Imagine you are writing the script for a movie about your business success, where everything is possible. Because you’re the author, you have the freedom to let your imagination go wherever you’d like to. There are no limitations here – none!
Let’s look at the five steps you need to take to set your business vision in more detail.
Step 1 - What do you want your life as a whole to look like?
Find a quiet space, take a couple of minutes, and dream a little about that vision. Although this movie is mainly focused on your business, I firmly believe that everything starts with your private life. How would you like your life to look in one year? What would it take for you to feel completely happy and fulfilled? How much free time do you have, and what are you doing with it? Are you spending the afternoons with your family, or are you working full time? Do you have any support at home to free you up for other things? (This is something I highly recommend adding to your vision!)
Don’t forget to plan for your time off too. When will you take holidays and how long will you be off work for? At the start of each year, I always block out my birthday and those of my kids and husband in my calendar – as well as a couple of extra days to plan a surprise or take a trip. This is about getting very specific, so you can figure out exactly how much time you will have available to dedicate to your business.
This first step is yours to plan your life, with no limits, so you are completely clear on what you want.
Step 2 - What will it take financially to make that happen?
Step one in this process was about getting clarity on what you want from your life from a qualitative perspective. Now it’s time to quantify the income you need to make that happen.
For example, if you want to live in a nicer house, what does that mean for your financial goals? Will you need to make a down payment or service a bigger mortgage? If you’d like to buy a new car, how much will that cost? What about those holidays we mentioned above, how much will you need for those?
When you’re looking at your financial needs, it’s not just about your day-to-day living expenses, like groceries and household bills. Think about all the special moments you have planned and how that will affect the income you require.
One important element of these calculations that’s often overlooked are your personal taxes. Depending on where you’re based, these will vary, anything from around 30%, possibly up to 50%. Don’t forget to allow for these figures when calculating how much revenue you need to bring in from your business. The simplest way to demonstrate this is probably with an example.
Let’s suppose you want to generate a net income of 100,000 from your business each year. (To keep things simple, we’ll leave currency out of our calculations for now and just concentrate on the figures.)
For this example, we’ll take a personal tax rate of 40%. That means, after tax, you’ll be left with 60% of the income that you’ve generated. To bring in a net amount of 100,000 you’ll need to allow for that deduction as follows:
Desired Net Annual Income = 100,000
Personal Tax Rate = 40%
(100,000 / 60) x 100 = 166,667
To make things easier, we’ll round that up to 170,000 – which is the figure you’ll need to earn each year to give you 100,000 income after tax.
Step 3 - Get clear on the specifics of your business vision
After completing steps one and two, you’re now clear on the kind of life you want to have *and* the income you’ll need to facilitate that. Let me remind you again that in the movie of your business success, there are no limitations. With that in mind, it’s time to focus on the details of the type of success you want in your business and how that looks in practical terms.
Take a couple of minutes to really think about that. What is it specifically that you want to achieve in your business? Are you motivated by the number of clients that you’re serving? Or are you aiming to reach a specific milestone like having the flexibility to spend time with your children every afternoon or take the last Friday of each month off? Perhaps it’s a mixture of both? This is your business and your movie. You’re creating it from scratch, and everything is possible.
Think about how the day-to-day of your business will look. What will you spend most of your time on? When you are building this vision, it’s so important that you don’t plan to do everything in your business yourself. You may not yet feel ready to hire help in your business or outsource some of your tasks, but consider the future and the kind of support you would have in your ideal business.
Next, I want you to get clear on your marketing strategy. How will you reach and enroll your ideal clients? What marketing campaigns will you run during the year, and how will you execute that marketing plan? What needs to happen each day and week in your business to attract the clients you need to earn your desired income?
Step 4 - Calculate the cost of running your business
Similar to step two, now it’s time to quantify the amount of money you need to support the business element of your vision. Continuing our example of a net income of 100,000, let’s allow a sum of 30,000 for general business expenses and support and an annual investment of 20,000 in coaching and/or mentoring to develop your business. That makes a total of 50,000 in expenditure. You might also want to add a sum for a specific profit margin or reserves amount, but I’m not going to go into too much detail on that aspect for now. What’s important is that you have a number in mind for your total business expenses for the year.
We talked about your personal taxes above, but don’t forget to consider any additional business taxes you may have to pay, depending on your location. Let’s take a figure of 55,000 for those in our example.
Now we can calculate the total figure you need to earn in your business to reach your desired net revenue target of 100,000 per year:
Pre-tax revenue (as above) – 170,000
Plus business expenditure – 50,000
Plus business taxes – 55,000
Total annual revenue required: 275,000
Step 5 - Break down your required monthly revenue
The final step is to take the figure of 275,000 as calculated above and work out how much you need to generate per month. You might be thinking, “Ok, Rosa, that’s really easy! I’ll just divide by 12.” But wait just a minute. Do you really earn revenue from your business for all 12 months of the year? If we consider holidays, time off and any other unexpected events, it’s far more likely you’re only generating income in your business for ten, nine, or even eight months each year.
A quick reminder – as I mentioned at the top of the post, this thought process doesn’t apply if your business is based on selling info or digital products, which bring in passive income and don’t require you to be available to generate revenue from them.
As a coach, consultant, or service provider, I hope that you are not simply trading your time for money and that you are charging correctly for the value you’re providing for your clients rather than just for your time. But the reality is, if you’re not available to serve your clients, you won’t be bringing in money. This is why I suggest creating your business vision and plan around the idea that you’ll only bring in income for ten months of the year at most.
Maybe your vision includes taking the summer off to spend with your children. In that case, I suggest that you consider eight months of the year as revenue-generating. If you don’t have many other commitments and know you’d like to work more than this, then maybe take ten months into account… but no more than ten.
That would give you enough room to have a really nice three-week holiday in summer, perhaps one or two weeks at Christmas, then another week around Easter. This gives you flexibility in your life and allows you to create a safety net for yourself in case something unexpected comes up. (2020, the pandemic and homeschooling being the perfect example of this for so many people!) If you’ve allowed for a “worst-case scenario” of earning income for a maximum of ten months per year, anything over that is a bonus.
This final step will lead you to your monthly revenue goal. So for an annual turnover of 275,000, generating that in eight months means earning 34,375 per month – let’s round that up to 35,000.
What if the numbers don’t add up?
Now for the most important part. Once you’ve completed all five steps, it’s time to double-check those figures. Divide your monthly income goal (in this case,35,000) by your pricing to see how many clients you need each month.
Let’s imagine that you currently offer a program for 7,000. That means you need to enroll five clients every month to meet that 35,000 income goal. Is that realistic for you? Do you have the time available not only to attract and enroll those five clients but to provide top-quality services to them as well?
Remember that you won’t be doing this alone – in your vision, you have planned for the support you need. But this is the time to ask yourself, “with that support, can I do this comfortably, or will it be too much of a stretch?” If the answer is that you can’t, and you think that your client goals are not sustainable or realistic, you have two options:
1. Increase your prices
In my experience, there are lots of experts out there who are massively under-charging for the level of work and value they deliver, and you might be one of them. So a simple solution, in this case, could be to put your prices up.
2. Modify your offer
The other option is to adapt your offer to deliver more value without investing so much of your time with your clients.
Of course, you could also combine both these approaches. Restructure your offering in such a way that you’re providing a premium offer delivering more value, which means you can also increase your pricing.
I hope this post has been useful to you. If you try out the process and create your own business vision, tell me, did it make things clearer for you? How did it move your business forward? Did you uncover anything that surprised you?
I’d love to hear about your experience and if you’ve any questions, just drop them into the comments below.
Next steps - if you need further support
Once you’ve created your business vision, if you decide that you need to increase your prices to make that vision a reality, but you’re lacking the confidence to do that or don’t know where to start, I’m here to help.
I’ve created my D.I.A.M.O.N.D. Pricing Assessment to help you move forward in exactly this situation. It’s a 30-minute, one-to-one session with me where we’ll consider your current offers and pricing. We’ll discuss your pricing potential and look at any blocks that might be preventing you from increasing your prices.
This is a powerful process; I have clients who have gone on to double their prices after just this assessment alone.To learn more, or to book your D.I.A.M.O.N.D. session, visit this page for all the details.