Some people were telling me the other day that they are going to make a lot of money on a project and they were so very excited I actually started to believe them. But before I got to over excited myself, I asked them how much money they planned to make and after a long pause they said “as much as possible”.
Then i spoke to some other even more excited entrepreneurs and asked them the same question and they gave me a figure of £10,000 in the first year. So i then asked, how many customers they needed to bring in £10K sales in the first 12 months and they looked at me blankly because they didn’t even know. So I asked them how if they didn’t know how many customers they needed that they had calculated they were make £10k in the first year, and again they didn’t know.
So basically they had simply made these sales figures up.
Most entrpreneurs don’t make any money because they don’t do the math before starting in business.
These are the things you need to know before starting any business :-
1. How much you want to make in sales per year/month?
2. What percentage of people do you plan to convert into customers?
( e.g If you are going to contact 1,000 potential customers to sell your product/service, what percentage of these people do you expect to convert into paying customers.
3. What is your average sale amount?
So if you want to make £15K per year (£1.25K per month) and you project you are going to convert 4% of the people you contact into buyers and each sale would be £5 per unit, you would need to sell 250 units per month at £5 per unit in order to reach your target of earning £15K per annum (£1.25K per month).
If each unit were sold to an individual, you would need 250 customers per month. 250 customers represents 4% of the total people you contact, so the total number of people you will need to contact every month is 6,250 of which 4% (250 customers), would purchase your product at £5.
So, if you build a list of some 6,250 and sell a £5 product to them every month and 4% of people purchase, you will generating an income of £1.250 per month, which equates to £15,000 per year.
I hope this article serves to show you just how important building an opt-in list is and to emphasise just how much the money is in the list.
List building techniques are:
- Social media
- Forum members
- Newsletter subscribers
There are plenty of tips on the homepage and forum, for how to find sale opportunities, if your stuck go into the forum and we will send you on the right track!
Contact us in the forum at www.youngwebbuilder.com/forum for further information.