This episode is a part of the Brilliant Biz Bootcamp💡 podcast series designed to teach you a concept that is essential in monetizing your creative business. Each episode features a companion resource for further exploration. You can gain access to the resources by entering your email address below. 👇🏽👇🏽
Today is lesson #2 in the Brilliant Biz Bootcamp series and it’s a good one because we are talking about money. Specifically how to find your ‘enough’ number so that you can set financial goals that make sense for your life and business.
But first, a quick trip down memory lane…
Growing up in my house, Friday nights were always pizza nights. On some nights instead of getting delivery, my dad would take my siblings and me to the Pizza Hut buffet. Remember that?
Like most kids, pizza was our favorite. We’d get so excited about the different pizza options and would return to the table with our plates overloaded with slices of pizza. My dad would always warn us that “Your eyes are bigger than your stomach”. After two or three visits through the buffet line, I’d be overstuffed and still have a plate of untouched pizza slices.
I find a similar phenomenon happens in young businesses. You see all of the opportunities available to you and that’s very exciting. Then, you see your internet favorites posting and boasting about earning 6 and 7 figures in their businesses. Suddenly you are piling those same financial goals onto your plate without considering if you have room for them.
Then what happens?
You’re sick! You end up overwhelmed or burnt out because you took on more than you can handle. Worst of all, eating too much too fast, means you won’t have room for dessert (which is all the things you want your business to allow you to do).
Here’s my question to you… Do you want the work that comes with growing to 6 or 7 figures? Do you really need that much money to leave your 9-5?
Instead of chasing the “figs”, I’m encouraging you to focus on finding out how much money is enough for you.
What is your “Enough” number?
Your “enough” number is the amount of money that you need to cover basic living and business expenses. In entrepreneurial circles, this number is referred to as MVI (minimum viable income).
Knowing your “enough” number is important because it’s probably significantly less than any of the figures the internet is encouraging you to chase. Most of us feel overwhelmed by the idea that our business should be able to cover all of our living expenses but haven’t actually defined what that amount is. Like most fears, naming and acknowledging them makes them less scary.
It’s also important to note that spending time on social media can influence our beliefs and goals over time. People are very vocal about wanting their businesses to earn 6 or even 7 figures. There is nothing wrong with that but it’s a huge mindset leap if you’re early in your business journey.
Instead of chasing those figures, why not focus on what would be enough for you? That’s really the financial goal you should be chasing.
How to calculate your “Enough” number?
The equation to calculate your enough number is pretty straightforward. Your enough number is your monthly living expenses + monthly business expenses + monthly debt pay down + a little wiggle room.
Let’s figure out how much money is enough!
Step 1. Calculate your monthly living expenses.
Gather all of your bills, grocery receipts, etc, and add them up. Don’t forget to account for variable expenses (expenses that can fluctuate month to month or throughout the year) and annual expenses. Write that number down.
Step 2. Calculate your monthly business expenses.
Gather all your receipts, recurring subscriptions, etc for your business and add them up. Again, don’t forget about annual subscriptions. Write that number down.
Step 3. Review your expenses and trim the fat.
Now that you have summarized your monthly expenses, review them and see which ones you can cut back. Do you really need all of those business tools? Could you do fewer Starbucks runs throughout the week? Be ruthless but realistic.
Step 4. Add in space for paying down your debt.
If you want to live your best life and have options, you need to minimize your debt. You have the most options and financial flexibility when you aren’t bogged down by debt. Add in the amount that you would like to pay towards clearing your debt faster.
Step 5. Add in a little wiggle room.
It’s nice to have a cushion and money saved for unexpected things. Decide how much money would feel like a comfortable monthly cushion. It could be $50 or $500. The amount is up to you.
Step 6. Add it all together.
Add your monthly living expenses + monthly business expenses + monthly debt pay down + a little wiggle room to get your ‘enough’ number. This is the amount that you need your business to cover monthly in order to survive.
Once you have your number, think about whether or not it feels achievable? What needs to happen in your business to get from where you are currently to this number?
What is your ‘Cherry On Top’ number?
Now let’s take this a step further. Your goal is probably not for you to just be scraping by. There are likely plenty of things you’d like to have or experience and you want your business to bridge the financial gap.
Your ‘Cherry On Top’ number is the upper limit of your financial goals. This is the ideal amount of money your business would need to generate to allow you to live your definition of your best life.
How to calculate your ‘Cherry On Top’ number
Make a list of your dream buys. These are things and experiences that you would like to have or that would add value to your life. Some examples of dream buys could include family vacations, a new car, hiring help around the house, a fancy gym, or a new bag.
Each new expense would have an additional monthly cost. So break down what those dream buys would cost on a per month basis. Then, add that additional amount to your ‘enough’ number to get your ‘cherry on top’ number.
How do you feel about this number? Is it lower or higher than you expected? Does that surprise you?
You don’t have to chase any giant figures to feel successful in your business. Like most things in business, there is more than one path to get to where you want to be. Aiming to hit your ‘enough’ number and then scaling up to achieve your ‘cherry on top’ number will put you on the path to sustainable growth.
You can gain access to the resources by entering your email address below.👇🏽