Do you ever take time to evaluate what’s working or not working in your online business? So many of us are hustling and bootstrapping. I get it. I know you are busy. But even if you are making part-time income in your business, you should stop and evaluate how you are doing.
I want to walk you through a simple 5 step review & planning process. This exercise will help you to:
- See the areas in your business that bring in the most revenue
- Identify the real potential areas in your business that maybe you have neglected
- Understand what income streams are the best use of your time moving forward
Depending on how large your online business is at the moment, you should be able to complete these steps in one or two hours.
Want to see the Profit Planning Exercise in action? Watch the video below…
Note: At the end of the short video tutorial I give you the link to download the spreadsheet for yourself.
Step 1: Write down your revenue streams
Write down all the different revenue streams in your business from the past 12 months. While the end of the year is ideal to do this exercise, the truth is you can do this any time throughout the year. Be sure to collect several months of data (12 months is preferred.)
Step 2: Break down the percentages
Once you write down all the different ways you have generated revenue in your business, add up the total revenue earned. For the purpose of this exercise we are not concerned about expenses, just revenue earned.
Next, divide each income category with the total revenue to get a percentage. For example, if I earned $100,000 for the year and my online course generated $49,000. Then my course produced 49% of my overall revenue. Do this with each income stream.
Step 3: Evaluate the potential areas
Once you run through this exercise, you will immediately begin to see areas of potential. Maybe one of your income streams represents 32% of your business but you’ve just introduced that income stream in the past 30 days.
Perhaps you see an income streams that is only at 5% but it has real potential. Maybe you forgot about it or you just have not fully tapped into the potential. The question you want to ask here is: “Which of these income streams has potential to grow this next year with a little bit of attention?”
Step 4: Estimate the revenue targets
This is the fun part of the exercise. Obviously, much of this is guessing, but do your best to estimate the revenue you could earn in the next 12 months. For example, if you just introduced coaching into your business in the last 30 days and earned $1000 your first month, then you could reasonably estimate $12,000-$15,000 for this next year.
You may come across some income streams that may have reached their potential as you see it, that is fine. Just record what you think you will do in the next 12 months.
Step 5: Record the needs
This step is a game changer in your business. Once you have written down your revenue targets for each income stream, now write down what you will need to do in order to make that happen. Some examples might be:
- Start an affiliate program for a product of yours
- Add an autoresponder about your online course to your welcome email sequence
- Start a Facebook ad program to an existing product you have
- Create a new lead magnet to attract more people to your list
Bonus Tip: Execute the plan
Once you have recorded all the things you need to do in order to grow those income streams, it’s time to execute the plan. I like to do these in 90 day goals. I’ll usually choose 3-5 projects I want to complete in the next 90 days.
The truth is you’ll end up with 12 months of work when you do this exercise. Don’t let all of this overwhelm you. Choose instead to tackle a few of the more important ones first.
Follow this simple exercise and you’ll gain the clarity and the confidence you need in order to grow your business to the next level.