Bill Stacy
31st January 2009, 03:39 PM
Your $300,000 a year business plan - Part One
The right product mix, the right profit margins, minimal marketing expense, low overhead
As a product developer/independent product marketer, it is within your reach to earn $300,0000 a year or more from your efforts.
But to achieve that level of income, you have to follow a fairly specific business model - one that is designed to maximize your chances of success, while reducing your chances of failure.
In this series of articles, I will be presenting a '$300,000 a year business model', which will cover the various components of this business plan, including products, prices, overhead and marketing.
In this first article of the series, we'll look at what it takes to earn $300,000 a year as a product developer - and why most people fail to do this.
$300,000 a year? Start with a calculator
One of the first steps to actually achieving $300,000 a year is to understand what it takes to earn that much. To do that, start with a calculator.
To start with, enter 300,000 in the calculator, then press the divide sign (/), and enter 365, then press =.
The result is 821.9178082. That is how much you must earn each day to generate $300,000 a year. That's $821.92 a day in sales.
Or if you want to figure it weekly, divide 300,000 by 52. You'll need $5769 a week. Or figure it monthly, divide 300,000 by 12, and you'll see that you need to earn $25,000 a month.
No matter how you figure it, it looks like you have to earn a lot of money each day, each week, and each month to achieve the goal of earning $300,000 a year.
But don't get discouraged. It can be done. I'll show you how.
Running the numbers
Our first calculation showed that to earn $300,000 a year, we need to earn an average of $822 a day in sales.
At first, that may seem like a lot of income to generate for every day of the year. And it can be . . . depending how you go about it.
For example, if you sell products that only net you $10 per sale, you'll have to make 82 sales a day, and do that every day of the year - for a total of 30,000 sales a year.
And let me tell you, generating 30,000 sales is a lot of work. Especially considering that in most cases, you will have direct contact with at least 20% of your customers (that's 6000 people calling or emailing you).
But if your products net you $50 per sale, then to make that $822 a day in earnings, you need to make 17 sales a day. Or 6,000 sales a year - still a lot, but attainable.
Better still, if your products earn you $205 per sale, you only need to make 4 sales a day. Or a total of 1,463 sales a year (120 sales a month).
This leads us to our first lesson which is:
Selling low cost products which produce low profits per sale require you to achieve unrealistically high sales volumes. But concentrating on a product mix where the average revenue from each product is between $50 and $500 per sale, means you can achieve your revenue goal with far fewer sales.
For our business plan that means we should - concentrate on higher profit items, and eliminate the lower profit items.
Number of products and customers
Let's assume that your chosen products earn you $50 per sale. If you offer just one product, it means you need to find 6,000 different customers to make 6,000 sales (6000 x 50 = $300,000).
But if instead of having just one product, you have 10 different products, all appealing to the same target audience, the likelihood is that many -- if not most -- customers will order at least two of your products. And if that average holds, it means you need only find 3,000 customers.
If on the average, customers order 3 of your products, you need only find 2,000 customers.
So our second lesson is:
Offering a line of related products which appeal to the same target market can significantly reduce the number of customers you need to find each year.
Additionally, if we have multiple products (let's say 10), then the number of daily sales required for each product is reduced. Example: With one product earning $50 per sale, you need to make 6,000 sales of that one product per year to make $300,000.
But if you have 10 products earning $50 each per sale, you need only 600 sales per product per year to achieve $300,000 a year. That's works out to just two sales per day, per product.
So our third lesson is:
The more products you offer, the fewer sales required by each product to achieved the desired revenue goal.
And finally, if you offer multiple products that appeal to the same target market, and if customers order multiple items per order, it means you need far fewer total orders per day to achieve your daily sales goal.
For example, if a product earns you $50 per sale, you will need to process 17 orders a day to achieve your goal.
But if each order includes 3 different products, with an average net income of $150 per order, you only need to take 6 orders a day to achieve $300,000+ a year.
So, by offering multiple products with strong profits, targeting the same audience, we can reduce the number of required orders per day down from 82 (for a $10 product) to just 6 orders a day (average $150 per order).
The math might seem a little confusing, but the point is this - you must understand the numbers if you are to have any hope of achieving $300,000 in revenue per year.
Where most people go wrong
Most people who strive to earn $300,000 a year marketing products fail. And most fail for the same reason.
They choose to offer products where the numbers are so stacked against them that success simply can't be achieved.
For example, they'll concentrate on selling low priced products with low profit, and will naively believe that they can achieve (and deal with) the 30,000 or 40,000 orders required to reach their goals.
The reality is that it's expensive to find and deal with customers - and if you position yourself so that you have to find 30,000 customers a year in order to meet your sales goals - you are going to fail.
The good news
One of the great things about being a product developer is you have the ability to change your business direction, to 're-invent yourself', whenever you feel it is necessary.
This freedom of choice includes the freedom to choose what kinds of products you will develop and market, who you will market those products to, how you will price those products, and how much you will spend to achieve those goals.
By the time this series of articles is completed, you'll have a good idea of the kinds of products you'll want to sell, who you will want to sell them to, at what prices, and within what kind of budget.
In this article, I tried to cover the 'math of success'. Once you understand what is required to reach $300,000 a year in income, it makes it much easier to actually achieve that goal.
In future articles, we'll look at the kind of product mix you want to strive for, and the specific kinds of products you'll want to concentrate on to achieve your daily income goals. Plus we'll look at the 'quick income generators' that can add $30,000 to $300,000 a year to your income totals.
It will be a great way to start out the new year.
******************************************
For more articles like this visit <a href="http://www.bmyers.com/index.cfm?affID=1daywealth">Bill Myers Online</a>
The right product mix, the right profit margins, minimal marketing expense, low overhead
As a product developer/independent product marketer, it is within your reach to earn $300,0000 a year or more from your efforts.
But to achieve that level of income, you have to follow a fairly specific business model - one that is designed to maximize your chances of success, while reducing your chances of failure.
In this series of articles, I will be presenting a '$300,000 a year business model', which will cover the various components of this business plan, including products, prices, overhead and marketing.
In this first article of the series, we'll look at what it takes to earn $300,000 a year as a product developer - and why most people fail to do this.
$300,000 a year? Start with a calculator
One of the first steps to actually achieving $300,000 a year is to understand what it takes to earn that much. To do that, start with a calculator.
To start with, enter 300,000 in the calculator, then press the divide sign (/), and enter 365, then press =.
The result is 821.9178082. That is how much you must earn each day to generate $300,000 a year. That's $821.92 a day in sales.
Or if you want to figure it weekly, divide 300,000 by 52. You'll need $5769 a week. Or figure it monthly, divide 300,000 by 12, and you'll see that you need to earn $25,000 a month.
No matter how you figure it, it looks like you have to earn a lot of money each day, each week, and each month to achieve the goal of earning $300,000 a year.
But don't get discouraged. It can be done. I'll show you how.
Running the numbers
Our first calculation showed that to earn $300,000 a year, we need to earn an average of $822 a day in sales.
At first, that may seem like a lot of income to generate for every day of the year. And it can be . . . depending how you go about it.
For example, if you sell products that only net you $10 per sale, you'll have to make 82 sales a day, and do that every day of the year - for a total of 30,000 sales a year.
And let me tell you, generating 30,000 sales is a lot of work. Especially considering that in most cases, you will have direct contact with at least 20% of your customers (that's 6000 people calling or emailing you).
But if your products net you $50 per sale, then to make that $822 a day in earnings, you need to make 17 sales a day. Or 6,000 sales a year - still a lot, but attainable.
Better still, if your products earn you $205 per sale, you only need to make 4 sales a day. Or a total of 1,463 sales a year (120 sales a month).
This leads us to our first lesson which is:
Selling low cost products which produce low profits per sale require you to achieve unrealistically high sales volumes. But concentrating on a product mix where the average revenue from each product is between $50 and $500 per sale, means you can achieve your revenue goal with far fewer sales.
For our business plan that means we should - concentrate on higher profit items, and eliminate the lower profit items.
Number of products and customers
Let's assume that your chosen products earn you $50 per sale. If you offer just one product, it means you need to find 6,000 different customers to make 6,000 sales (6000 x 50 = $300,000).
But if instead of having just one product, you have 10 different products, all appealing to the same target audience, the likelihood is that many -- if not most -- customers will order at least two of your products. And if that average holds, it means you need only find 3,000 customers.
If on the average, customers order 3 of your products, you need only find 2,000 customers.
So our second lesson is:
Offering a line of related products which appeal to the same target market can significantly reduce the number of customers you need to find each year.
Additionally, if we have multiple products (let's say 10), then the number of daily sales required for each product is reduced. Example: With one product earning $50 per sale, you need to make 6,000 sales of that one product per year to make $300,000.
But if you have 10 products earning $50 each per sale, you need only 600 sales per product per year to achieve $300,000 a year. That's works out to just two sales per day, per product.
So our third lesson is:
The more products you offer, the fewer sales required by each product to achieved the desired revenue goal.
And finally, if you offer multiple products that appeal to the same target market, and if customers order multiple items per order, it means you need far fewer total orders per day to achieve your daily sales goal.
For example, if a product earns you $50 per sale, you will need to process 17 orders a day to achieve your goal.
But if each order includes 3 different products, with an average net income of $150 per order, you only need to take 6 orders a day to achieve $300,000+ a year.
So, by offering multiple products with strong profits, targeting the same audience, we can reduce the number of required orders per day down from 82 (for a $10 product) to just 6 orders a day (average $150 per order).
The math might seem a little confusing, but the point is this - you must understand the numbers if you are to have any hope of achieving $300,000 in revenue per year.
Where most people go wrong
Most people who strive to earn $300,000 a year marketing products fail. And most fail for the same reason.
They choose to offer products where the numbers are so stacked against them that success simply can't be achieved.
For example, they'll concentrate on selling low priced products with low profit, and will naively believe that they can achieve (and deal with) the 30,000 or 40,000 orders required to reach their goals.
The reality is that it's expensive to find and deal with customers - and if you position yourself so that you have to find 30,000 customers a year in order to meet your sales goals - you are going to fail.
The good news
One of the great things about being a product developer is you have the ability to change your business direction, to 're-invent yourself', whenever you feel it is necessary.
This freedom of choice includes the freedom to choose what kinds of products you will develop and market, who you will market those products to, how you will price those products, and how much you will spend to achieve those goals.
By the time this series of articles is completed, you'll have a good idea of the kinds of products you'll want to sell, who you will want to sell them to, at what prices, and within what kind of budget.
In this article, I tried to cover the 'math of success'. Once you understand what is required to reach $300,000 a year in income, it makes it much easier to actually achieve that goal.
In future articles, we'll look at the kind of product mix you want to strive for, and the specific kinds of products you'll want to concentrate on to achieve your daily income goals. Plus we'll look at the 'quick income generators' that can add $30,000 to $300,000 a year to your income totals.
It will be a great way to start out the new year.
******************************************
For more articles like this visit <a href="http://www.bmyers.com/index.cfm?affID=1daywealth">Bill Myers Online</a>