How much money do you want to make this year
How much money do you want to make this year? Meet your 2020 Financial Goals in 5 easy steps….
By Pamela Durkin, ASID, LEED AP ID+C
Oh my goodness, it is FEBRUARY ALREADY! Anyone else feeling like 2020 is flying? I actually had a designer tell me yesterday, “The year’s already over!” What?!? I seriously hope she was kidding.
But it got me thinking about the financial goals we set for ourselves and our business. Are we really doing the work to get us where we want to go? I’m not talking about complicated spreadsheets or number crunching but a simple way to determine if you are on track to make 2020 your best year ever.
I have an easy way to figure this out, so by the time you finish your cup of coffee, you will have the roadmap you need to “Get ‘er done!” as I say!
- How much money do you want to make this year? Keep in mind, I am talking real dollars. Meaning, the money that comes into your business that is gross profit, not money that will be used to pay vendors for client purchases. Don’t worry about other business costs like overhead, etc. Let’s just work in big numbers.
- What kind of projects do you generally have? Are they large projects, small projects, consultations, or a combination of these? Put an average dollar amount to each of category of project. Again, think profit dollars, not total dollars. FYI, design fees are (big picture) 100% profit where purchases should be at 30%+ profit (but most designers are operating on less than that). Many designers that I chat say they only need about 3 large projects per year. Three! Easy peasy, right?
- Now, break down that yearly goal into monthly numbers. So, divide your yearly goal by 11. Why 11? Well, I am hoping that you plan to take some time off this year, right? AND, I would think that would on average, equate to 1 month off per year. Sounds heavenly, doesn’t it? It sure does but this also changes your math. Ok, so take your big number and divide it by 11.
- Take your project types and determine how many of each you need to get to your monthly goal.
- How many qualified prospects do you need to get in front of to result in the number of booked projects you outlined in Step 4? For example, if you want to book 10 projects per year, and you generally close 25% of the prospects you get in front of, you will need to be talking with at least 40 qualified leads. Does that make sense? I find that most do not realize they have to talk to a lot more people than they think to get to booked projects. Of course, make adjustments to your numbers as it relates to you and your business. Is your close rate closer to 50%? Then you only need to be in front of 20 well qualified prospects.
I hope this helps you figure out how many opportunities you need to be a part of to get to your awesome financial goal for 2020. If you feel you still need some help, I have created a cheat sheet for this exercise so all you have to do is enter your numbers. If you would like this free resource, just get in touch with me at email@example.com and I will send it over to you!
Cheers to an amazing and super profitable 2020!
About the Author:
Pamela Durkin, founder of Pamela Durkin Designs,
has been a professional interior designer for more than 25 years. She is a past-president of ASID Florida South Chapter, one of the largest chapters of ASID in the country. She has served on the Board of Architecture and Design in NJ, after being appointed by the Governor. She has been a speaker at the IDS Southwest Florida Conference on how to help other interior designers run a better business.
After receiving overwhelming feedback, she decided to put this information in a book so more designers could benefit from it. Her book, Elevate! How to Take Your Business from the Ground Floor to the Penthouse was recently published and is now available on Amazon.