Today’s Topic - The Long Game

Over the last few weeks, we’ve done a bunch of math. More than just math, we’ve identified the key variables that form your solo business model.

But the truth is, your business will never really look like your model.

So why make it in the first place?

Because we aren’t mapping out an endpoint. Businesses aren’t static. They start somewhere and grow to something.

Your solo business will start at zero and end wherever you take it.

What we’ve modeled is ONE point on that curve.

An equilibrium point.

A rational, logical balancing of many competing interests and constraints.

One way to look at this curve is how your time management changes over time.

This chart has non-revenue-generating time on the horizontal axis, and revenue-generating time on the vertical axis. The idea is that the sum of both always adds to 100%.

Let’s walk through it.

Point 1: Where you start

On day one - you have zero revenue. Almost all of your time is dedicated to finding clients.

This is basically where everyone starts.

Point 2: Survival Threshold

Somewhere along the way, you’ve managed to hit a survival point.

In a prior newsletter, we tackled the question of a “break-even revenue target.” This is the point at which your business can survive. You aren’t pulling money from savings anymore.

This point is unique for each individual - but it exists somewhere along the curve.

For argument’s sake, imagine it’s when you’re at 50% of your revenue targets.

Point 3: Model Target / Saturation

I call this “saturation”. This is the fairy-tale scenario we mapped out in our original business model when everything is exactly as planned.

So roughly 20% of your hours are going towards business development.

Another 20% toward overhead-type activities.

And 60% is going toward client work.

At this point, you might consider your business a smashing success. But there’s another point further out on the curve…

Point 4: The Long Game

With time and experience comes efficiency. And most importantly - great clients that stick around.

Always remember:

Your business does NOT cap out at what your model says.

Here are a few examples where you might end up…

Scenario A - You just wanna chill and do other stuff

You end up with a steady pool of returning clients that keeps you busy for 60% of your available hours.

But now you need to spend zero hours on business development and zero dollars on client acquisition.

So you’re hitting your revenue targets in ~20 hours per work-week and using the rest of your time to pursue other interests.

Plus you no longer have to spend cash on new client acquisition - which can be a pretty good bump in net revenue.

Scenario B - Maximize Revenue @ 40 hours/ week or beyond

Once you have ~60% of your time occupied with long-term client work, perhaps you tweak efficiencies until you’re busy 80% of the time.

Eventually, you stabilize around 32-hour weeks generating 33% more revenue than you modeled.

Scenario C thru Infinity

Maybe you simply start raising prices for new clients.

Maybe you have other side projects that take off.

The world is your oyster! That’s the goal anyway.

Now - none of this is easy. 

But I don’t want you to think of your business model math as some static thing. There’s a growth curve.

We simply design the business around the most logical point to do so.

Next week we move into Strategic Business Design. 

This is where it gets fun.

You need to understand the math so you make smart strategic choices.

But the math doesn’t get you clients or make you money. Strategy does.

Until next time - LFG.

-Zack

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