{"id":51955,"date":"2017-05-12t08:13:09","date_gmt":"2017-05-12t12:13:09","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=51955"},"modified":"2019-05-06t10:13:27","modified_gmt":"2019-05-06t14:13:27","slug":"build-revenue-plan-reverse","status":"publish","type":"post","link":"\/\/www.g005e.com\/2017\/05\/12\/build-revenue-plan-reverse\/","title":{"rendered":"build your revenue plan in reverse"},"content":{"rendered":"

\"young<\/a>calculate exactly how many clients you need.<\/strong><\/p>\n

by sandi leyva
\nthe complete guide to marketing for tax & accounting firms<\/a>
\n<\/i><\/p>\n

when i started my business, one of the first things i did was teach a quickbooks class at the local adult education center. i was paid a lousy $20 per hour to teach a six-hour class of up to 12 entrepreneurs how to set up a chart of accounts, create invoices and enter bills. after the first class, some of the entrepreneurs came up to me and said, \u201cthis is good, but i don\u2019t want to do it. do you want to do my quickbooks for me?\u201d and i started getting clients.<\/p>\n

more small firm growth strategies:<\/b> 3 steps to using social media to increase your search rankings<\/a> | clients need advisory services more than they know<\/a> | marketing vs. sales and how to plunge in<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n

the thing about how i started my business was that it was completely reactive; i was at the mercy of who approached me. i wasn\u2019t actively selling. the result was that my business grew incrementally and slowly. i truly didn\u2019t know where i was going, and i didn\u2019t have a plan.
\n<\/p>\n

the good news is there is a better way!<\/p>\n

my business did work out eventually, and yours could too if you keep doing what you\u2019re doing now. but if you want to take more control, grow faster, get the rent paid and not borrow as much money, then the answer is to go in reverse<\/strong>. it\u2019s counterintuitive; that\u2019s why so few small business owners get it right.<\/p>\n

the answer is to start with your end goal revenue number\u00a0and create a revenue plan that meets it, and that\u2019s what i will show you.<\/p>\n

the traditional revenue plan takes your current income and adds perhaps 2 percent, 3 percent increase. and then you have your revenue plan for next year. that\u2019s not the kind of revenue plan i want you to make. i want you to start with the end in mind \u2013 your net take-home pay.<\/p>\n

how much do you want to make? <\/strong><\/p>\n

let\u2019s say you want to take home $50,000. that\u2019s after taxes and overhead, so that equates to your net pay if you were employed. now we need to reverse\u00a0into our revenue figure.<\/p>\n

to keep it simple, let\u2019s assume you work at home. your expenses include the following:<\/p>\n

phone\/internet\/cell phone: $3,000\/year<\/p>\n

computer (replace every three years): $1,000\/year<\/p>\n

office supplies: $1,000\/year<\/p>\n

cpa license and memberships: $1,500\/year<\/p>\n

website, business cards and other marketing: $2,500\/year<\/p>\n

insurance and legal: $3,500\/year<\/p>\n

gas and car allowance $1,500<\/p>\n

stuff you forgot to list: $1,000 (this is your padding!)<\/p>\n

total: $15,000\/year<\/p>\n

first, let\u2019s gross up the net to include self-employment taxes. thirty percent is commonly used; you are welcome to plug in the exact numbers.<\/p>\n

50,000 * 1.3 = $65,000 gross pay before taxes<\/p>\n

then add the overhead expenses:<\/p>\n

$65,000 + 15,000 = $80,000 revenue needed for the year<\/p>\n

you need $80,000 in revenue to make $50,000 net.<\/p>\n

if you\u2019re not a solo practitioner and you have payroll expense, plug in those numbers and create a budget for your bigger practice. the numbers will be bigger, and there will be more expense categories, but the process is exactly the same.<\/p>\n

do take the time now to plug in your own numbers based on history or your better estimates.<\/p>\n

confirming your revenue number <\/strong><\/p>\n

your revenue number\u00a0for the year is now $80,000. you\u2019ll need to bring in and collect $80,000 worth of business in order to take home the net you want.<\/p>\n

now let\u2019s see how to get to the $80,000. it\u2019s as simple as multiplying the number of clients you need by the average annual revenue per client.<\/p>\n

let\u2019s oversimplify, then we\u2019ll add the complexity you need.<\/p>\n

note: if you don\u2019t bill hourly, then don\u2019t worry about this part. you can go straight to your client number.<\/em><\/p>\n

a working year is made up of roughly 2,000 hours. (take 52 weeks, subtract two for vacation, and multiply by 40 hours per week.) we can\u2019t quite bill that much because we need time to do our overhead: our marketing and selling, training, running errands, paying bills and interfacing with vendors. the average accountant bills between 1,200 and 1,600 hours per year.<\/p>\n

you\u2019ll need to decide how many hours you feel you can bill, and this will be based on your years of experience, productivity, how well you know the industry of the client, how complicated the client problem is, etc. the number of hours you need to work is also dependent on the rate you can charge. here are some possible scenarios:<\/p>\n

1,250 hours * $64 per hour = $80,000<\/p>\n

640 hours * $125 per hour = $80,000<\/p>\n

1,600 hours * $50 per hour = $80,000<\/p>\n

so the amount of hours you need to work will depend on the price you charge (or can get) for the work you are doing.<\/p>\n

if you charge less than $50 per hour and cannot get more in your market, then you\u2019ll need to rethink your expenses or your expected take-home pay. at least you can see ahead of time how the numbers work together so you can reset your expectations or plan differently.<\/p>\n

your client number<\/strong><\/p>\n

the ultimate goal of your revenue plan for marketing purposes is to compute the number of clients you need to bring in to your business. if you have been in business for at least a year, you have some history you can look at.<\/p>\n