“How much money do you want to make in 2022?”
I recently opened a client coaching session with this question.
She gave me an ambitious but doable revenue goal.
“Great! What ideas do you have so far for reaching that goal?” I asked in response.
She came back with the usual answers.
“Grow my email list.”
“Fill my classes with more people.”
“Maybe raise some of my prices.”
I nodded my head, then asked.
“Do you know your revenue capacity?”
She looked confused.
I looked back at her reassuringly. “Don’t worry; most people don’t know their revenue capacity. That’s why they’ll struggle to meet their income goals. But we’re not going to make that mistake. “
I continued.
“Let’s do a little thought experiment. If you woke up with twice as many people asking to work with you tomorrow, could you serve them all? What about 3x or 5x?”*
She replied, “I’d have to turn a lot of them away.”
This is the same answer many coaches and consultants give in response to this question.
I nodded my head. “Before we talk about growing how we will reach your income goal this year, we need to figure out if you even have the revenue capacity to reach your goal. This is the step so many people skip.”
I explained that her “revenue capacity” is the amount she would make by the end of the year from all her income sources, assuming she sold out all of her scheduled offers.
We added everything up. It fell short of her goal.
She shot a worried glance my way.
“Don’t worry. Now we know what we need to focus on to reach your goal.”
She needed more revenue capacity. She needed the ability to serve more people throughout the year.
The problem was she could only take on so many 1:1 clients, and many of her classes had limits on how many people she could accept.
Without making some changes to her offers, growing her list would be like filling a small bucket with a fire hose.
We found ways she could serve more people by optimizing offers to be more scalable.
We also found an offer she hadn’t been focusing on that could accommodate an effectively limitless number of people if she offered it online.
That class would be a key leverage point in reaching her income goal.
I imagine you’ve set an income goal for your business.
I also imagine you have some ideas about how to reach that goal.
But reaching your income goal requires more than blindly pursuing the usual go-to strategies.
Coaches and consultants often find themselves up against an income ceiling because their offers aren’t structured to scale.
Knowing your revenue capacity reveals what’s needed to reach your income goal (or if it’s even possible to reach with your current business model).
Your revenue capacity is how much money you would make if all scheduled and available offers for the year sold out.
Do you know your current revenue capacity? Do you have plans to increase your revenue capacity to make your income goal possible, let alone easier to reach? Feel free to reach out here if you need help with that.