Work backwards from your yearly goal and break it up into manageable, bite-sized pieces. Plan out how much revenue your business needs to bring in each month and schedule your projects accordingly. When you plan your future you own your future.
In Rule #1 of The Harpoon Method, we took the time to calculate a meaningful, yearly revenue goal for your business. You now know how much revenue you need to generate each year in order to cover your business & personal expenses, make a healthy profit, and support your current lifestyle.
If you're just starting out this yearly goal can look a bit intimidating. But have no fear! We're about to chop that goal up into more manageable, bite-sized pieces. Rule #2 is all about breaking up your yearly goal into smaller goals and planning your projects and revenue around those goals. Let's get started!
Congratulations! You figured out your yearly revenue goal. Now what? The yearly goal is a big number, so let's make it a bit more manageable. What we need is a smaller goal we can shoot for each month. Having a monthly revenue goal not only provides motivation and urgency for the immediate future, but it also allows us to strategically schedule our client projects based on our current goal progress. We'll get to that in a moment.
But first let's figure out an average monthly revenue goal for your business. This one's easy. Since you already know how much revenue you need to make in a year, you can calculate an average monthly goal like so:
For example, if your yearly revenue goal is $84,000 then you can count on needing to bring in an average of $7,000 a month. If you've already entered your yearly revenue goal into Harpoon, you might have noticed Harpoon has already done the math for you. At the bottom of your Schedule there's a Monthly Progress row that displays your average monthly revenue goal for each month of the year.
Having an average monthly goal to shoot for is handy, but sometimes running a business can have its financial ups and downs. One month might see you completely overshooting your goal, while the next month might see very little revenue at all. Even with the best of planning, this can happen from time to time. The key is to consistently recalculate your average monthly goal based on how far ahead or behind you are from month to month.
Consistently recalculate your monthly goal based on how far ahead or behind you are.
For example, at the beginning of the year, let's say your average monthly goal is $10,000. But in month #1 your business didn't bring in any revenue. You're now $10,000 "behind" for the year. So, starting in month #2 you'll want to recalculate a new average monthly goal to compensate for being behind. In this case, your new average monthly goal would be $10,909. We took the $10,000 you didn't make in month #1 and equally distributed that amount across the remaining 11 months of the year, adding that result to your original monthly goal. I know, more math. But thankfully Harpoon automatically handles this math for you and keeps your average monthly goal dynamically updated as the months roll on. Again you can see this happening in the Monthly Progress row of your Schedule.
Great job so far! You now have both a yearly and a monthly revenue goal to shoot for. Your work is cut out for you. Now comes the fun part. It's time to start scheduling your projects and revenue based on the goals you've set.
Having a monthly revenue goal can help you properly space out and schedule your projects throughout the year, which helps eliminate a lot of the "feast or famine" income cycles you might've experienced in the past.
For example, if your monthly goal is $10,000, you can now confidently schedule $10,000 worth of projects for the current month, knowing this amount will meet your needs. If you receive a lead for an additional project, instead of frantically trying to cram that project into the current month, you can now offer your client a project booking for the following month where there's "room" for more revenue.
You'll discover your project work becoming much more manageable from month to month (no more burning out), your revenue more consistent (less of a roller coaster ride), and running your business more enjoyable. And if the client insists the project be scheduled into the current month, and you decide to take it on, Harpoon will automatically reduce the average goal amount for the remaining months of the year since you're overshooting the current month's goal.
A monthly revenue goal can help you strategically space out and schedule your projects throughout the year.
Harpoon's Schedule is the perfect place to start planning out your projects and revenue. You've already seen how Harpoon displays your dynamic monthly goal at the bottom of the Schedule. This is the number you're shooting for each month.
As you add projects to Harpoon's Schedule, you'll be able to see how those projects affect your monthly revenue goals even before you get paid for the projects. This is because Harpoon not only displays your collected revenue on the Schedule (the invoice payments you've received from your clients), but also your expected revenue. Expected revenue is revenue you plan to receive from your clients, but haven't received yet.
For example, if your goal this month is $10,000, and you start adding projects to your Schedule for this month, Harpoon will tally up how much revenue you're expecting to get paid from those projects for this month and compare it to your goal for this month.
This makes it easy to schedule your projects based on your revenue goals. As soon as your expected revenue for the current month equals your monthly goal, you can confidently start scheduling any additional projects for future months. With each project you schedule, you'll see how it affects your monthly goals and ultimately your progress towards your yearly goal.
Scheduling your projects becomes a game of filling up buckets with water, the water being your expected revenue and the buckets being your revenue goal for each month. As you have more water (expected revenue), it's your privilege to pour that water into the buckets that aren't yet full. So if the current month's bucket is already full, you might decide any additional water is a better fit for a future month's bucket.
If the current month's bucket is already full, find room for additional water in a future month's bucket.
The key is that you now have a dynamic, monthly goal to shoot for that's based on your actual needs. And you can now schedule your projects based on how your expected revenue from those projects affects your goal progress. You're in control and your work is cut out for you.
Hopefully you're starting to see how powerful a yearly revenue goal can be. We've worked backwards from your yearly goal, breaking it down into smaller monthly goals, which has empowered you to plan out your projects and revenue based on your goal progress.
Next we'll focus on Rule #3: Bill Your Clients Intelligently. Invoicing should be a stress-free process for both you and your clients. We'll walk through some best practices for helping you get paid in full and on time. Let's do this!
Disclaimer: Harpoon and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
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