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copyright © 2003, by Karyn
Greenstreet. All rights reserved. When your business is offering a service, you have to
determine how many clients you'll need in order to reach your goals. You
don't have to have a group of ready-made clients when you begin, but it
helps if you have a good network of people who you can approach, asking them
to become clients.
Start by making a list of your current clients, including clients to whom
you give free services. From this list, estimate how many would be willing
to pay for your product or service (versus getting it for free). Consider
how many of these people can afford to pay, if that is an issue among your
client base. Also, ask yourself if any of your current clients are "repeat"
clients, meaning they have hired you more
than once in the past year or two.
Next, think "networking." How many people do you know who you can call, to
tell them about your business, even if they have never bought your services
or products before? Include in this list the following people: family,
friends, business colleagues, members of your neighborhood or community, and
people you
purchase products and services from. Let's say this list totals 40 people.
Imagine if you tell 40 people about your services and products, and ask them
to tell
five others, you will have reached 200 people.
The next step is to determine how much money you need to make. Take a look
at all your living expenses and decide if your business is supposed to
completely
support your financial needs, or if you will get another job to support you
in addition to your business. Determine your fees and do the math to figure
out how many clients/sessions you have to do per year (or how many products
you have to sell) to make your living expenses.
For example, say that you are a Piano Teacher, and need a total income of
$50,000 per year ($35,000 per year after taxes and expenses) as your living
expenses. If you are going to charge $60 per hour, you'll need to do about
833 hours per year. This is equivalent to 69 hours per month, or 17 hours
per week, or 3-4 hours per day (using a 5-day work week). If that's too many
hours per day, you will either need to increase your prices, or lower your
expectations of total revenue. If that hourly fee is higher than your competitors', you'll have to re-think
your hourly fee, AND the number of billable hours you have. (You can do this
same math if you sell products instead of services.)
So let's say you need 833 hours per year to live comfortably. Does that mean
you have to find 833 individual clients? No, not really. Depending on your
profession, you will have a certain number of repeat clients who may come to
you once a week, once a month, or once every six months. If you have really
good marketing, you can increase this number of repeat clients because you
will remind them that you exist, with mailings and phone calls. Remember,
it's cheaper to market to existing clients than to new, prospective clients.
Take the time to do the math. Figure out how much work you have to do in
order to live the life you want.
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Karyn Greenstreet is a Self Employment expert and small business coach. She
shares tips, techniques and strategies with self-employed people to boost
clarity and focus, create sustainable motivation, and increase sales and
profits.
Visit her website at
www.PassionForBusiness.com
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