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 expenses, make a healthy profit, and support your current (and future) lifestyle.
For some, 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 every 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 Totals 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 Totals 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 you can see the need 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.
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, it's time to 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 job to pour that water into the buckets that aren't yet full. So if the current month's bucket is already full, you'll find room for additional water in 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.
As a general rule of thumb, you're aiming to hit your monthly revenue goal for each month. Blowing past your monthly revenue goal can mean you've overbooked yourself, which in turn presents the possibility of burning yourself out. Not fun. But there are circumstances where overshooting your monthly goal makes strategic sense.
Have you ever taken a vacation and tried to relax and enjoy yourself, but in the back of your mind you're stressing out because you're not sure how hard you'll need to work when you get back just to make up for the time you've been gone? There's a better way to handle time off, and your yearly revenue goal has already set you up for success.
Let's pretend you want to take the entire month of July off from work. Maybe you're going to hike a good portion of the Appalachian Trail. Or maybe you're less ambitious and simply plan to binge watch a few TV series without interruption. Whatever the reason, you're going to need July off. Yet you still want to hit your yearly revenue goal.
At the beginning of the year, let's say your monthly revenue goal is $10,000. But you already know you'll be taking July off of work. If you want to hit your yearly revenue goal, you'll somehow need to compensate for July's lack of revenue. You come up with a few options:
It basically comes down to a choice of working harder before your time off; working harder after your time off; or working a bit harder throughout the entire year. Any of these options would work just fine, but you decide option #1 is the most appealing as you feel more comfortable knowing your time off has been earned ahead of time.
So starting in January, instead of aiming for your original monthly goal of $10,000, you hustle to bring in an extra $1,667 for a total of $11,667 a month. As the year progresses and you continue to overshoot your original monthly goal, you'll find a couple of interesting things happening in your Harpoon account.
First you'll notice in the Totals row of your Schedule that your monthly goal total is being dynamically reduced from month to month. In fact by the time you reach July, your original $10,000 monthly goal has been reduced to $8,333.
This is because Harpoon has kept track of how far ahead of your monthly goal you've been each month leading up to July and has recalculated a new monthly goal accordingly.
The other thing you'll notice is the Vacation Earned widget on Harpoon's Dashboard is now indicating you've earned 30 days of vacation.
This is because Harpoon knows you've been bringing in extra revenue this year, and has calculated you could take off 30 days and still be right on track to meeting your yearly revenue goal. You can leave for the entire month of July and not bring in any revenue, knowing that when you get back to work in August, you'll pick right back up with your original monthly goal.
Using the same logic as above, you might opt to break up your year into sprints. A sprint is a dedicated period of time where you put in an above-average amount of focused work. In the context of Harpoon, the aim of a sprint is to bring in an above-average amount of revenue for a dedicated period of time so you don't need to work as hard during a future period of time.
For example, one common type of sprint is a quarterly sprint. With this type of sprint, you're aiming to overshoot your monthly revenue goal during the first and third quarters of the year, so you can take it easy during the second and fourth quarters, the later quarters being associated with early summer vacations and family holidays.
A sprint is bringing in an above-average amount of revenue for a dedicated period of time.
Let's say your monthly revenue goal is $10,000. You decide at the beginning of the year you want to take it easy during the second and fourth quarters of the year. In fact, you want to cut your work in half during those months, which means you only need to bring in $5,000 per month in revenue. To make up for this lack of revenue in the second and fourth quarters, you plan to sprint during the first and third quarters of the year and bring in extra revenue. In this case you'll need to bring in an extra $5,000 per month during the first and third quarters. That's a lot of extra work—you'll need to "sprint" for sure—but you'll be rewarded with a much slower pace during those second and fourth quarters.
You can do the same with a monthly sprint, where you purposely overshoot your monthly goal every other month in order to take it easy during the months in between. The key is that whether you overshoot your monthly goal or miss it, Harpoon will dynamically adjust throughout the year to keep up with you.
These are just a few examples where purposely overshooting your monthly goal can make strategic sense. We encourage you to experiment with Harpoon's Schedule and try different patterns to see what works best for you. Maybe you're more of a "consistent and steady" type of person who does best when your goals are evenly spread out across the calendar. Or maybe you work best as a sprinter, pushing extra hard for limited periods of time so you can be rewarded with times of relaxation. Either way, be deliberate. You're in control.
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. We've also seen how your revenue goals can help you properly plan for some well-deserved, guilt-free time off.
Next we'll focus on Rule #3: Bill Your Clients Intelligently. Invoicing should be a joyful, 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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