What answer would you give me if I asked you how much money you'd like to earn this year? Nope, it's not a trick question... Come on be honest!
I guess for a lot of people, the obvious answer would likely be in the millions, or potentially something akin to "as much as possible." But remember I used the word 'earn' and not receive/win the lottery/inherit, or the like...
So it may surprise you that in a recent study, the figure of $95,000 a year was deemed to be the most desirable income for an individual for life satisfaction, with $60,000-$75,000 per annum being acceptable for emotional well being.
Obviously, there are many variables here in terms of location (San Francisco, Singapore, Hong Kong residents may cry at this salary...) as well as parents with numerous extra outgoings to cover. But even with higher costs each month, the average 'dream income' is still not a million miles above this level of income.
As an old school teacher once said to me years ago "you're usually paid a fair amount in life, for the amount of shit you're willing to take." Yes, fairly direct and sometimes not massively true in an uneven society (look at the fairly low average pay for nurses and the service industries...) but he definitely had a point.
In another recent study which ties this all together, 1000 people were surveyed, with the participants who were earning $51,000-$75,000 per year, the least stressed, and those earning over $200,000 per year the most stressed out on a daily basis. "Heavy is the head that wears the crown" and all that...
So why earn less money to be happy?
Well, it all comes down to work-life balance and remembering Maslow's hierarchy of needs.
For ease, let's say that the optimum amount to earn for pure satisfaction is $73,000 (using my rudimental math skills I came to this from working out $51k + $95k /2), and if you were earning this amount per year, do you think that you, dear reader would be happy?
I think for the vast majority of people (unless you're in a highly skilled profession), the answer would be yes.
Ok, so it may not be enough to go and splash out on that new beach house or take a personal trip to Italy to buy a new Ferrari, but for the vast majority of us, it would definitely pay the bills, the rent, give access to a fairly comfortable existence with plenty of leisure time. It would probably also leave a little bit over each month to invest or save for a rainy day.
Earning $73,000 per year would absolutely cover most human basic needs and happiness such as food, water, security, and time left over to spend with friends and family.
The flipside is that by potentially earning vastly more than this, we may inversely damage our own life experience through the temptation to eat and drink more flamboyantly, to party more often, and to take on bigger loans for bigger houses that are way out of our budget.
Plus, you may also be working more often, becoming super frazzled to the point where seeing friends and family slips and that dream work-life balance starts to become deeply out of kilter...
And what happens if your earning power suddenly comes to an end and you need the big bucks just to stay afloat? Deep anxiety is just around the corner of how you're going to pay for everything as your lifestyle becomes unsustainable...
We're not trying to be the voice of doom here
If you're earning regular six-figure checks and you've got your stress levels, work-life balance, and lifestyle all working to perfection, then that's great. All the power to you!
But if you're thinking that the perfect lifestyle you want to achieve is just around the corner for a $73,000 salary then let's start talking about how to get there.
Because how freaking cool would it be to live a dream lifestyle where you're financially secure, have a really great social life, loads of great memories with friends and family - plus, to namecheck my old friend Maslow again, you're able to start channeling your ability to head towards self-actualization and engaging in creative activities that feed the soul?!
Work out the kind of life you want to live, how much that will cost, and let's commit to achieving that. Balance is the goal here people!
As an entrepreneur, your path to $73,000 per year is clear
So let's make a deal. Say you agree that you're happy to earn this figure a year, let's work on a strategy to get there!
Ok, so applying for a job that makes $73,000 per year could well be one way to achieve this salary, but again, you're putting your life in the hands of potential uncertainty by taking a job that may not be around tomorrow...
So here's a thought...why not make money by taking control of the situation yourself by flexing your entrepreneurial muscles and building your own empire on your own terms? Too much hassle? Too much stress? Too much hard work? Yes, I can understand your objections, but would building out your own business be less hassle, less stress, and less hard work than spending your days fulfilling someone else's dreams?
This may be a stretch of the imagination for you if you're used to being a salaried employee, but it's worth noting that you don't need to make a total 180 switch overnight.
By figuring out the kind of business you want to run, seeing if there's an audience out there for it, and starting to develop this over time, you could start small and dream big, turning a cottage industry into something that ultimately becomes your full-time hustle and helps you make money day in, day out.
The dream is Monthly Recurring Revenue
Unless you have serious savings in the bank, an early investor on board, or have recently been made redundant and have few options but to go full steam into a new enterprise, the chances are you'll want to start building your own audience of potential future customers in a sustainable way - most likely as a side-hustle.
But start slowly and have a plan, because the beautiful thing is that your daily actions will start to compound so as those one to two spare hours a day turn into a good solid ten to fourteen days a week, spent working on your new business.
If you build a high-quality audience and develop a trusted brand, with a product or service business that meets a specific demand over time then you'll be in luck.
The absolutely holy grail for any ambitious entrepreneur is achieving solid Monthly Recurring Revenue (MRR) usually through selling subscription services to a product or service. By generating recurring revenue, you'll develop a solid base to build on each month, and before long, new customers will add to your loyal base and you'll be in 'win-town' territory.
Let's do the math - going solo in a sustainable way
Breaking your offering down, putting the work in, and setting yourself targets of where you want to get to (and what it will take to get there) are some of the most important ingredients to entrepreneurial success.
You also need to think about how to set yourself targets and work backwards towards them. By doing this you can start to map out how to make money and benchmark yourself month on month to see how far ahead or behind you are on hitting your desired revenue and profit.
As mentioned, first you need to develop an audience (potential customers) around your brand. So work hard on your content marketing strategy and put out engaging information that will see your audience at scale.
It might seem a low figure, but it's usually accepted in the start-up/software world that if you can convert 3% of your audience through your sales funnel to paying customers then you're in for success. This is a metric used by software producers, knowing that most consumers will be happy to have the freemium version of their product/service. But if you can sell a premium offering to 3% of a high volume audience then it really will keep the lights on and more!
3% may seem ridiculously low but that's seen as success. Start thinking of how big you can get your audience across your mailing list, social media, and any other touchpoints you have to build your community. Then get to work converting 1-5% (or hopefully more) of them to pay for what you have to sell.
An eighteen-month money-making success plan
Ok, so you're building an audience and you're putting quality content out there, there's some real buzz around your brand and a solid community is starting to form.
Now is the time to start thinking about how to make money by selling and converting a number of these leads to sales. Let's break it down into some realistic targets...
There are many services and subscriptions that could be created to achieve your goals, from low-ticket items such as software at $7.99 per month, to professional service packages ranging from yoga to coaching, surfing lessons and holistic therapies. Let's say you're running a professional on or offline coaching service and you're charging $79.99 per month for a package...let's map that out!
Month's one to three - if you sell 10 subscriptions for $79 per month then you're at $799 earned per month. Not enough to retire on, but you have to start somewhere!
Month's three to six - let’s skip forwards and you now have 25 regular subscribers to your service-based business. This will take you to $1975 per month and a nice little side-hustle alongside your main source of income ($23,700 earned per year).
Month's six to twelve - your loyal base is growing each month. You're up to 50 regular customers paying $79 a month and this adds up to $47,400 per year. You're now thinking of going full-time or realized a good few months back that there's something in this!
Month's twelve to eighteen - you should now have real momentum and be close to, or achieving your goal of $73,000 per year (plus change). 100 subscribers paying $79 per month will take you to $94,800 - a more than realistic target, with opportunities to upsell further packages and products to your loyal devotees, take on sponsorships, or anything else to build a sustainable business that doesn't affect your work-life balance.
Month eighteen onwards - the world is your oyster and you now have options in work, life, and control over your destiny. Keep growing, develop new processes so as you can manage the day to day, and see where you now want to take your business.
You may get here earlier, it may take a little longer, but start off small and continue to learn and improve whilst enjoying the journey and you'll get there!
Choose life by building a sustainable business
Regular readers of our Go Solo blog will know I'm all about encouraging entrepreneurship, by sharing the best tips and tricks to achieve the perfect work-life balance.
There are no shortcuts to success, but by pointing out new ways to frame your route to achieving your goals as an entrepreneur, we hope to inspire you to make your dreams a reality.
I can't wait to see what business you're inspired to create to make money and achieve the perfect work-life balance.
Until next time...keep winning
If you like what you've read here, have your own success story, or want to join the conversation around entrepreneurship then hit me up on Twitter or check out our YouTube channel - I'm always around!
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