The Fundamentals of Becoming Profitable
I’M SO EXCITED THAT YOU’RE HERE!
I feel like I have so much to cover but I’m going to do my best to use these blogs as a starting point for each topic that the post contains, the tip of the iceberg, and let your actionables (yes there are actionables at the end of each blog because doing is learning) spark further dissection of each point. YAY!
So I’ll begin with two elements that I feel are fundamental to the blueprint of increasing revenue and as a byproduct, profit. To ensure that we’re on the same page though, let’s first define what exactly revenue and profit is and why they’re different.
Who remembers their Econ class?
Revenue is the total amount of income generated by the sale of goods or services. It is your “top line” as it sits at the top of the income statement (a financial statement that reports a company or freelancer’s income during a particular time period).
Profit is the amount of income that remains after all expenses and debts are covered. It is often referred to as the “bottom line” or net income on the income statement.
Okay NOW that we’re clear on our lingo, the first step in becoming profitable or increasing profitability is AWARENESS.
You need to be aware of your current financial state and aware of the current state of your brand.
Startup and Personal Finances
The best way to understand what numbers you need to target as a sales or profit goal is to understand the current state of your own finances.
THIS CAN BE SCARY AS *insert your favorite intense descriptor *
But it is absolutely necessary! You need to know where you stand financially, what your assets are, your debts, and your overall financial health. Starting an art based business is beautiful and gives us all the warm and fuzzies in our tummy but don’t forget the BUSINESS part. Just like any other company, you need to prioritize covering expenses and starting to decrease debt while starting to raise your assets. And knowing exactly where you stand is a great way to jumpstart this process.
There are a number of tools on the internet to do a quick financial health check, but here are a couple of my favorites:
If you bank with Bank of America, they actually offer a budgeting tool within their mobile app. Inside of this tool, they also allow you to connect your various financial accounts (student loans, credit cards) to pull all of your debt and assets into one space so that you can keep an eye on these numbers. I’m not certain what other banks offer this in their apps but I know that a number of them do at least give you a budgeting tool. The cool thing about using an in house tool like your banking app is that it can also track your monthly income vs. your monthly expenses so that you can see exactly what your monthly deficits or surplus’ are.
If your bank doesn’t offer asset overviews via your banking app, don’t fret! Personal Capital is here to the rescue. Personal Capital is a FREE software, available on desktop and mobile, that allows you to add ALL of your accounts (student loans, bank accounts, credit cards, stocks, etc) to one central location so that you can see and track your net-worth. If you’re like me…. and you have a number of student loans (s/o to MTSU and Berklee) this can be incredibly terrifying and disheartening to review. But the beauty in knowledge is that it comes with power.
By knowing exactly where you stand you can come up with a realistic and strategic sales goal that can help you to not only sustain your living expenses but also begin to pay down debt in a way that puts you in the driver seat.
You should feel absolutely empowered to see exactly where you stand and what your monthly, quarterly, and annual sales goals should look like. Making a game plan is instrumental to the success of your business.
Start asking yourself questions like:
How many photoshoots do I need to complete this month to cover living expenses? (Or how much should I charge per photoshoot based on the value of my work)
How many new leads do I need to connect with (and convert into paying clients) to start making a $200 monthly payments on my Credit Card Bill?
How many current clients do I need to reengage with my brand in order to hire a new art designer for my upcoming product launch?
Know. Your. Numbers.
Set. Your. Targets.
Ooo! To start your own Profit and Loss sheet, click here for a google template. Click file then make a copy to add it to your own google account or File then Download if you do not use Google.
Anything is possible, but positive outcomes are more probable when you are educated on your financial status and needs. I know it sounds rudimentary, but I promise this matters and this is where it all starts.
The second element I mentioned was awareness of brand; aka What does my social media and marketing persona look like right now?
Have you established:
A Mission Statement
A Native Way to Reach Your Audience (after you’ve identified who your audience is)
and of course…
A Marketing Strategy
Establishing a brand identity is what’s going to help you find your tribe. It’s kind of like that old saying “like attracts like”. When your brand is clear it attracts consumers or fans who are passionate about the exact niche that you work in.
And the best way to start developing these tools and brand assets is to get going!
So without further ado:
5 actionables to put into play after reading this blog:
Set up your free Personal Capital Account (I know, its scary… but do it anyway.)
Write a mission statement or artistic statement for your brand (Email me if you’d like examples or help).
Pick two colors and save their corresponding Hex Numbers (the six digit number used to represent color in HTML CSS and other computing applications) Check out Pretty Colors for inspiration, the Hex Number is already listed for you if you hover your mouse over a color that you like.
Pick a font. Check out Type Kit by Adobe or other font sites for inspiration and fonts that you can download to use on your computer and upload to use in software such as Canva, Spark Note, and a host of other creative softwares and website hosting spaces.
Take a guesstimate (or a real look) at who you think your audience is. We’ll talk more in depth about this in upcoming blogs, but for now think about who comments on your posts the most, or who purchases your services, etc and think of what they all have in common. I’ve included an screenshot from my press kit below to give you an example of a sample or target audience. (You’ll also see use of my signature color, temperature, and type)
Well, that’s all for now. I was determined to not overwhelm you so I hope that I did not!
Please comment below with questions and feedback and thoughts below. And congratulations on taking your first step to monetizing your brand!
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