Hey, it’s Samantha Hartley of the Profitable Joyful Consulting Podcast. This season we’ve been talking about performance, and also a little bit about consulting business metrics.
So today, I want to talk about sales metrics and what you should be measuring in your business.
The thing about our types of consulting businesses is that we don’t have an internet marketing business.
We probably don’t have the kind of business that some of your small business clients might have, and so we’re tracking different things than what other people might be tracking in their business.
It depends on how many clients you want to have. Some people, especially back in the day when I was getting started, there was this common thing where a coach would want to have 40 clients in their coaching business.
Well, why would they want that? Because there were 40 hours in a week and you wanted to have every single hour filled with a client because you were paid by the hour.
That’s basically how we earn. The more you work, the more you earn.
I don’t know if you feel this way, but personally, if I had a 40 hour week filled with 40 clients, I would hate my business and feel completely overwhelmed. So I teach you to create a business that is dramatically different from that one. In which you never spend more than a third of your time on clients and client work.
Whether it’s meeting with them or working on deliverables for them, that means two thirds of your business is spent on something else.
Now I have a whole episode about that that I will link to, but what I want to specifically talk about today is, what should your sales be?
I was inspired to talk about this part of business because one of my clients said that every year since she has started her business, she has increased and surpassed the revenues of the year before.
That seems like a good thing, right? Instead of celebrating it, which is, by the way, the first thing you should do when you have a good thing like exceeding last year’s sales. She feels dread because it increases the pressure and raises the bar for the next year.
Now I offer that because you may feel that way, too. You may feel a pressure to increase your sales every single year and year after year after year.
That’s stressful, and if you think about who’s putting that pressure on her, it’s clearly a terrible boss who is relentless and charging onward and insisting on growing the company every year.
Of course it isn’t, it’s her. She puts pressure onto herself. There’s some belief inside of each one of us that is causing us to do things where we’re looking for certain results for certain reasons.
The first thing I want you to do is think about: What do you really want to have from your business? What are your goals and what do you want to reach? Is it important to you that you actually do grow the business every year? Or is it possible to hit a number where you’re happy with what that number is?
Now society tells us, “No, you have to keep growing year after year, and a shark that slows down, dies.”
There’s all this programming for us that we have to be relentless in growth, and the truth is you don’t, because it’s your business and you get to do whatever you want.
One of my favorite things that a client said to me was, “I don’t actually care if I hit 2 million in my business,” because I talk about the Path to 2 Million. I mean, we can have a consulting business that can be anywhere along the Path to 2 Million.
She just wants to have $500,000 that she brings home for herself. So she asked, “How big does my business need to be in order for me to bring home $500K for myself?”
That’s the kind of thing that I want you to think about. If you were bringing home the amount that you want to bring home for yourself, would you be okay with the business not growing? What if it just stayed the same? It could get smaller and sometimes it could get bigger.
Here’s the deal, it can be whatever you want it to be, and I want you to feel comfortable having a business that maybe grows year after year, but you don’t put relentless pressure upon yourself.
So the first thing that I want you to do is think about: Do I want to have a sales goal in my business? Do I want to work towards hitting a certain number?
What I would say to you is, if it feels joyful, if you feel excited about hitting a number, then do it.
Throughout the growth of my business, it has always felt fun for me to try to get an A, and an A for me meant hitting a certain number that I had in mind.
In the beginning, I just wanted to hit $100,000 a year. I realized the math would’ve been great to hit $100,000 a month, but way back in the beginning, I just wanted to hit $100,000 a year. Then I wanted to make sure that I hit what my salary was back at corporate, and it was higher than that. So when I hit that then I wanted to hit 150, 175, 200 and 250, all of these kinds of milestones.
It can be fun and exciting for us as we grow our businesses, and I want you to think about: Is it fun and motivating for you to create a number that’s a sales goal?
You might decide that you want to have a number of clients, and that’s the thing that motivates you, or maybe it’s something else. If you are goal driven and goal motivated, then go for it. Allow yourself not to be motivated by the same things that everybody else is.
A way that you can structure sales goals for yourself if this is fun, is to say, the minimum that I want to do is what I did last year. Then you can have a goal or a target, which is a certain amount higher than that, and maybe it’s that next milestone, or maybe it’s something else. Then the third number can be a stretch goal. You can gamify it and create a reward for yourself if you hit that number.
So again, if it’s playful and fun and joyful and you gamify it by creating little rewards for yourself, then do it. If it isn’t fun for you, by all means, don’t do it.
Now, one of the dark sides of having a goal is that sometimes we will do things for the sake of hitting the goal that are not in the highest good of the business.
This is one thing I really want to warn you about. I’ve noticed this in myself that sometimes I’m so close to hitting a goal and I have a fun reward for myself for hitting that goal.
Then I think, “Oh, if I just get this client then I’ll hit that number,” and I talk to someone that’s not a perfect fit. So it would be in my interest to hit the goal and sign them up, but it would not be in my interest to work with them because they’re not a good fit. So I want you to watch yourself for incentivizing things that will make your future self unhappy.
It’s never more important to hit a goal than it is to ensure that you’re working exclusively with perfect clients. That is the beauty of owning our own business, we don’t have to go back to somebody else and say, “Well, I could have hit our number, but I would have had to sign on these people who would have made us unhappy as clients.”
Actually what’s interesting is my clients who have consultancies that are in the $2 million range that I mentioned, they will not reward their employees for signing on terrible clients. We have an understanding among ourselves in that company. No, we want perfect clients and that’s more important than actually hitting the goal.
So those are sales targets.
The next thing that I want to talk about is whether you want to focus on having monthly or yearly goals?
When I was first starting out, it was more important to me to have that $100K business or the $250K business. I really looked at it more in terms of the entire year and in hitting that number, I didn’t really care what I did on a monthly basis. Sometimes what was really fun was, I would hit my goal within like the first four months of the year and then I could just coast.
That sounds great, but cash flow in those latter months was not that great because I would have received a lot of that revenue in the beginning. So even though I could have sold other stuff, I didn’t always, sometimes I would just coast. Then other times I noticed that by having an annual focus as opposed to a monthly focus, I would have those revenue rollercoaster moments–one month I got a $40,000 payment and then the following month I would have like a $700 month. That seems like, yeah, $40,000, but that $700 is stressful.
This is part of the reason I teach my clients to do a monthly recurring revenue with your clients. You can take a chunk of a payment, you can do a $60,000 payment as 12 times five, or you can do four times 15. I’ve done all of the above. This is really much more about you and your comfort zone with how steady you need to have your revenues coming in.
What I found with a lot of the people that I work with is that having the peace of mind of like $10,000 a month coming in for like 12 months, or sometimes my clients will sell a 18 month package.
I want you to think about what your business would feel like if you knew you had $10,000 a month coming in, or $20,000 a month that was just known and coming in, or $30,000. This is the way that I have built my business.
I mentioned recently my client who’s just hit the $79,000 a month mark, she’s pulling that revenue month after month. This is done with a variety of clients. So the way that I teach to do this, as you may remember, is I want you to have transformational engagements. That means these multi-year, much more than $100,000 a year, but a minimum of $100K, and then layer those clients.
If you have, let’s say it’s not even a $100K client, but like a $50K client. If you have five times $50K, I want you to have between five and ten because that’s a decent number of clients to have. It’s not too many eggs in one basket, but it’s not like 40 clients coming out your ears, and having to track them.
A nice number is somewhere between five and ten and then those engagements are also between $50 and $100,000K. So if you have five times 50, you have a $250,000 a year business. If you have five times ten, you have five clients at $10,000 a month that is a $600,000 a year business. Then go from there.
That’s the business that I want you to be building, and it isn’t difficult. So many of my clients have this business and are working with that. You might decide that you have a $500,000 year, or $600,000 year business and you stop. You’re like, “This is what I want.”
How many sales calls do you need to be having and how many of these discovery calls do you need to be having to do that? What’s your close rate? I think it’s really important for us to have no less than one discovery call a month, no matter how it goes.
If you’re closing one call a month then you’re going to have 12 clients, right? One a month means that on an ongoing basis, you’re going to constantly be closing 12. That gives you room for some to roll off and some to add. Then you can think about, how do I scale this thing, and do I hire more people to work with me?
Part of the reason I want you to have no fewer than 1 to 2 discovery calls a month is to maintain the habit and practice.
I remember the first time that I had between 5 to 10 and they were around $50K and $60K engagements. So I had this nice, comfortable business and I was able to take a break from marketing my business. I was able to take a break from sales and I just rested. That is a great feeling, and then it’s important to get back on the horse and do those discovery calls.
When you have a foundation of 5 to 10 clients at $50-$100K per year, you can have a gentler cadence to your marketing. Not with “Sell, sell, sell” urgency. It’s more, if you are the right fit for me then get in touch.
It’s much more of a people coming to you, an inbound strategy. It makes it much more giving and generous to where you’re basically teaching. You’re sharing information and you don’t have this relentless hunt to get new clients.
Now, if you have ambitions that you want to increase your revenues every single year and you want to increase the number of clients you have, and you want to hire other consultants to work under you, etc. Then you’ll do more sales calls and that’ll be fine. But you can hear in this that you don’t need to have tons of appointments and you don’t need to have tons of calls to maintain this kind of business.
If you are around people who are saying you need to be doing a lot of discovery calls and making sure that you have a constant flow of new leads coming into your business. That’s not the way your business works.
I want you to let that sink in and imagine the kind of business that you could be building if you were doing things differently. I have clients who are increasing their revenues year after year by working this way.
This is the way my business is structured. I do have a group coaching program that is a little bit different, which means I can add more clients to that because I have more leverage in that program.
But the fundamental basis and the foundation of my business is this 5 to 10 clients at $50-100K per year, and then we go from there.
Sometimes people roll off, a lot of clients will stay with me year after year and the way that I’ve been able to serve more people is by adding a group coaching program.
All of these things are available to you if you want to work that way. The main things that I want you to take away from today are that you can create the business that you want and you don’t have to chase a number. You don’t have to force or pressure yourself to hit a certain revenue number any year.
If goals are fun for you, work with goals and remember that you’re looking for a small number of high quality, high value clients, instead of this constant scramble to be doing sales calls and adding new clients to your business.
I hope those are refreshing ideas and they make you feel peaceful and hopeful and excited about growing your business into something that will be both profitable and joyful and never stressful.
So with that, I am wishing you a Profitable and Joyful Consulting Business. Thanks.