Four steps to gain clarity
Last summer, when I was taking a business program with Marie Forleo, bestselling author and business coach, one of the first assignments she gave us addressed what she called “earnings clarity.” For any entrepreneur who wants to be successful in business, knowing profit clarity is vital.
As an artist, money coach, and financial consultant, it’s pretty easy for me to understand what profit clarity is and how to crunch pretty much all the numbers for profit instead of pondering all the different scenarios. However, for many creative entrepreneurs who are not necessarily financially literate, I find the issue of earnings clarity can be very confusing.
I love what Marie told us about it: earnings clarity is vital knowledge if you want to make more money and stop wasting time on an unprofitable income stream. This means that you need to design the right business model to reach your highest business potential.
Here are four steps that I think can help you achieve this:
Step 1: Vision
Confession: I have changed my business model a couple of times in the last eight months. However, the more I work on profit clarity, the clearer my vision for my business becomes.
Essentially, to maximize profits from your business, you need to build your business model around its strengths and weaknesses. For example, I am currently in the art and training business, and have over 15 years of accounting and financial management experience. So it seems to make perfect sense to me to teach creative entrepreneurs how to nurture their finances.
The fact is, without a clear vision of your business model, it will be difficult for you to achieve much for your business. My suggestion is to sit quietly and write down all your strengths and abilities, then build your business model around these talents. I’ve found that one of the best ways to get a better look at your unique talents is to talk to your family and friends, those who know you well, about your ideas. And, of course, you will also need to try them, a lot.
Step 2: Creation
Once you have a clearer vision of your business model, write it down! Here’s the fun part: now you have the opportunity to design the programs you love to offer your clients. Just remember that when you create them, you’re designing your business model around your strengths and abilities to reach your highest earning potential.
Step 3: Crunch the numbers
I know for some of you, this is the hard part. You may need help, but I’m sure you can do it! I recommend using Microsoft Excel to record all the numbers.
You not only need to know how much you’re going to charge for each program, but also your cost of goods sold and your overhead.
It’s important to write down this “revenue clarity” so you can see, for example, if you’re charging enough for your services and products, which programs and products you should sell more of to reach your highest profit. and if you need to reduce unnecessary marketing expenses. You can then use this profit clarity to work strategically on your marketing plan.
Step 4: Reality and set-up
Once you have completed your business model and marketing plan, you now need to test your plans. The reality of your benefits will quickly tell you if your business model is working or not. If not, go back to step 1 and readjust your business model.
As creative entrepreneurs, we all want to do what we love. However, to help more people and achieve our dreams, it is essential that we keep our finances healthy!
