Sometimes business planning involves working backwards in order to set goals for your handmade or creative business. Wondering how this works?
Business planning and goal setting are often tough things to do. Mainly because we tend to set vague goals for ourselves and our business.
How to work backwards to set your business goals.
One way to work backwards is to start with a money goal. It also helps if that goal has a meaning beyond just a dollar amount.
Instead of just saying “I want to increase sales” (which is vague), try something like this.
Let’s say that your family needed to buy a new car. Plan it all out. The car payment would be around $400.00 a month. And then, to account for things like taxes, insurance, gas, etc., bump that number up to $600.00 – just to be safe. Your goal is to contribute $300 a month.
That means, you need to add an extra $300 (or more….cause more is always better) to the monthly bottom line of your handmade biz. Once that’s done, and you’re seeing that level of income on a regular basis, you’re ready to go car shopping.
Once you know how much money you need to make, you can start to think about different ways to do just that.
Don’t limit yourself to just one way to come up with that extra cash, try a combination of things like:
- Finding new customers for existing products
- Create a higher priced item and offer it to both existing & new subscribers
- Bundle some items together
- Look into affiliate offers with recurring commissions.
Let’s take our ideas and do some math:
- The average price of your items is $5.00, you’d need to make an extra 60 sales per month.
- Create a higher-priced item, valued at say $10, you’d need to sell 30 of them every month.
- Bundle some things together (say 5 of your $5 items) and sell them for $22.50, you’d need to sell 14 bundles every month
- Sign up for an affiliate offer with a $30 recurring commission per sign up, you’d need to get 20 people to sign up.
All of this boils down to getting your “stuff” in front of more people – so your daily to-do list would include plenty of action steps to get your items in front of more people by creating compelling offers to buy and new ways to sell.
At the end of the day it’s all about motivation and shifting your mindset. A certain dollar amount, or even a particular number of clients or sales, doesn’t really mean much and aren’t all that motivating. When you get to the point that it’s time to sit down and do the work, you want something more meaningful to aim for. That’s what business planning and working backwards to set your goals is all about and it’s more powerful than you think.
Links to the other posts in our Business Planning challenge:
- Week 1 – Business Planning, the “secret” to success
- Week 2 – Business Planning, Know where you’re at NOW
- Week 3 – Business Planning, Increasing traffic
What did you think of this week’s tip? Did you find it helpful? Does it make sense to set concrete goals for your business?