When your business is offering a one-on-one or group 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.