How To Set A Revenue Goal That’s Realistic And Achievable

Many women set their revenue goals too low; not because they want to, but because they don’t have all the information they need to make the best decision for themselves and their business.

Let’s face it…nobody wakes up and thinks “how can I under earn today?”

So why are so many women caught in a burnout cycle of overdelivering and under earning?

This is a topic that we can dedicate an entire blog series to (and we probably will in the near future).

 

For now, I’m just going to brain dump a few reasons that I come across when working with women small business owners and money:

• We weren’t taught the language of money.

• Money is taboo but even more so for women.

• It’s highly emotional and activates a physiological response within our bodies.

• As a business owner, you have to deal with it almost every day — avoidance is catastrophic.

• Women small business owners are the quickest growing demographic in entrepreneurship and the marketers KNOW this. 

• Conning people out of their money is a favorite pastime for many and is as old as time. This makes it incredibly difficult to know who to trust so we often shut down and choose to trust no one.

• Even among entrepreneurship, there is STILL a wage gap.

• Research shows that women just aren’t putting the money they do work to good use for them through simple investment strategies.

Let’s start to unpack what really happens when we earn revenue that our businesses generate. 

This is opposed to someone receiving a paycheck from an employer or the common belief that your revenue goes right into your piggy bank.

That’s not how business finances work.

Based on Profit First methodology, when your business generates $100K in revenue it means you are actually only taking home 50% of that revenue.

This means you’re taking home around $50k after you account for profit, operating expenses, and taxes (and that’s only if you have a plan!).

 

In many cases, women small business owners don’t have a plan or the mindset that allows them to financially prosper from the effort and labor they put into their businesses.

This is why we need to know how to set a revenue goal and to understand your business finances.

 

How does Profit First help you set a realistic revenue goal?

Profit First helps you to know how to set a realistic revenue goal by making the calculations super, super easy (my FREE Revenue Goal Calculator does this whole thing for you, too – even easier!).

You see, when you know what you want to pay yourself, you can set a revenue goal that’s the realistic number to make that happen. 

You ensure that your business is in service to your life.

Profit First answers the question “how do I create a business that compliments my lifestyle?”

 

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Knowing how to set a revenue goal can be hard for women business owners – here’s why

Worry and stress among women small business owners and its relationship to money is complicated, but also very real and tangible.

Based on a research study by Gallup in May 2020,
“Only 27% of small-business owners are women. Compared with their male peers, they tend to have lower revenue, they receive negligible VC funding (just 2%), and they are less likely to get traditional small-business loans. And when women do get financing, their business loans are 31% smaller than those for men — even when their companies have “similar characteristics like past performance and number of employees,” according to a 2014 study by professors at Northeastern University and Babson College.

As a result, female-owned small businesses tend to have less cash and a smaller network to leverage in times of trouble.

And if history repeats itself, female-owned small businesses will go bankrupt at a greater rate than male-owned businesses: 61% of small businesses owned by men, compared with 55% of those owned by women, made it through the Great Recession.”

This is alarming but we can make a difference in the businesses run by women when we apply the Profit First methodology.

With Profit First, businesses can operate with cash reserves, have greater clarity around what to spend money on for growth initiatives, and ensure that the business owner is financially whole.

In fact, it’s why I feel we have a MANDATE, not a mission, to give our clients the necessary tools to make a significant financial impact in their lives as small business owners.

Knowing how to set a revenue goal is a huge step in creating financial change for women.

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How to view wealth creation differently

We need to start thinking about wealth creation differently.

Owning a small business that is guided by Profit First allows women to pay down high leverage credit card debt, start-up costs, pay themselves, contribute to their retirement, and use a combination of their salary and profits to invest in additional cash-generating assets like index funds, stocks, real estate, or even other businesses.

This allows women to increase their net worth truly making them financial powerhouses.

What could you be doing with the profit that your business generates?

You could:

• Invest in stocks and shares.
• Invest in property.
• Pay down your mortgage and debts.
• Purchase properties.
• Invest in other income streams.

Aligning your personal financial goals with your business revenue is when you find the sweet spot, reduce overwork, and deliver your most important work with increased generosity.

Tara Newman

When you don’t align your personal financial goals with your business revenue you wind up with a host of exhausting challenges:

• Resentment for your business, your clients, and team.
• Overdelivering your services and undercharging for the results you get your clients.
• Overworking for revenue that you might not need.
• Overspending on marketing and other strategies that don’t get you closer to your version of financial freedom.

Less truly is more.

But how do you find that line between less is more and less is “I can’t pay the bills?”

You download the revenue goal calculator and watch the 15 min video and learn how to set a revenue goal that’s realistic and achievable.

 

Why Women Often Set Goals That Are Too Small

There are a lot of mythical benchmarks floating around in the online business space,  – ones that don’t even exist in the non-online business space  – so I really want to break everyone free from this line of thinking of $100K as a benchmark or even $1M as a benchmark.

Nothing extraordinary happens when you hit a specific number.

What is more important is that your revenue goal allows you a clear plan to:

• Pay yourself well
• Profit wisely
• Plan for growth.

This is why a $100K benchmark is problematic.

Now, I remember when I wasn’t making $100K, all the talk about hitting that first six figures was very confronting to me. It became a huge distraction from actually getting to where I needed to be for the long haul.

It was talked about in a way that made me feel shameful because I wasn’t there yet. The picture that gets painted in the online business space is over glamorized and divisive.

The income claims have ceased to be inspiring and have become divisive. 

My best advice is to treat everyone else’s revenue as a vanity metric. 

You have no idea how they are utilizing that income, if they’re profitable, or if they are too burned out to even enjoy it (most likely!)

Set your own benchmarks and make them a stretch for you. 

 When we set stretch goals for ourselves, they challenge us to gain new skills, shift our perspective, and discover new ways of being.

It’s even possible that setting a benchmark of $100K is keeping you at a plateau. And there is nothing more frustrating that being just under your goal.

I’m going to explain why:

Have you ever fallen short of a goal?

I know I have.

So, if you’re choosing $100K as a goal and fall short by 20%, you will be at $80,000 in revenue.

Then you’re going to start a narrative around what it takes to get to $100K; “Well, I guess I wasn’t good enough to hit $100k,  so I might as well make that goal for myself again”.

No, this is shrinking. 

Instead, go bigger, stretch yourself to be different, and learn to DO differently.

Maybe we should eschew the concept of SMART goals –  especially the part that says our goals have to be realistic.

Why? 

Oftentimes we interpret realistic as safe which isn’t very exciting.

Profit can pay down debt if you have it, or be put toward a vacation, or home improvements, or buying a home.

Your CEO pay gives you more than enough IF you have secondary income coming in.

This gives you money to invest in your net worth, and social causes that are important to you.

Now, we are actually starting to get somewhere.

Also, crucially, if you fall short of this goal, you’re still way further along than falling short on a small goal.

Now, you might not reach this goal in a year — but you can be employing the strategy, energy, and mindset to get there.

I’m going to go out on a limb here and say being realistic is hurting you.

$100K is a great pit stop but you have to think beyond that.

(Note how different this is from when you are feeling confronted by $100K and setting smaller goals – are you with me?)

Do yourself a favor when you sit down to map out your vision and goals — THINK WAY BIGGER.

The same goes for you if you’re setting a $500K goal, but really want to go for a million. THINK BIGGER.

Set the goal that stretches you, to develop a plan for what you really want.

Set a goal that stretches you to become the person who hits that goal. 

Stretch yourself to get creative and think outside the box.

When you set your revenue goal,  think about what things truly cost in your life and business.

 A couple of questions that really matter when it comes to setting a revenue goal hat’s realistic and achievable:

 

• Where are you going? (and I mean in life and in business).
• How much money do you need to get there?

Think bigger so you take bigger action.
This doesn’t mean A LOT of action.

This means taking your boldest actions.

Now you know how to set a revenue goal, here’s your first step to take right now:
I have created a Revenue Goal Calculator which does the Profit First math for you.
Yep, it couldn’t be any easier – so dive on in and discover how to set a revenue goal with ease

 

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Bold Takeaways:

• Many people mistake revenue for CEO pay.
• Using Profit First to set a revenue goal means you are able to plan your business expenses and income goal ahead of time.
• We need to view wealth creation differently: when we put profit first, your business becomes a wealth creation asset.
• We often set goals that are too small. When we set a stretch goal, we can put the plan in place to get there.
• The revenue goal calculator helps you to plan your income and revenue goals with ease.

  

If you would like to be supported in identifying how to set your revenue goals and strategic planning for your business, now is your time to join The Bold Profit Academy.

The Profit First curriculum inside The Bold Profit Academy is waiting to be implemented by you right now. The longer you wait to get started, the longer it will take for you to reach your financial goals.