The Truth About $10k Months

The coveted 5 figure month, once you’re there all your problems are going to be sorted. Right? Well, actually the truth about $10k months is that it depends on how you structure your business. Here are three truths that sole traders and growing businesses need to know.

Income vs Earnings

Firstly, I think we need to clarify if we are talking $10k in cash in the month or $10k earned in the month because they are quite different things. $10k in cash is when you’ve received $10,000 from clients as payment for invoices. But $10,000 earned is when you have completed work worth $10,000k. This is where those 10k months start to come unstuck.

Let’s say you sell a six-month package for $2,500. If you sell four of those in a month, and they are all paid in full you’ll receive $10k into your account. BUT it’s going to take you six months to actually earn all of that money. That is four spots in your calendar you can’t sell again for six months.

If we continue the example, imagine you can fit in eight client sessions a week and the $2,500 is fortnightly sessions. Once you’ve sold 16 packages you are fully booked for the next six months. You could have a $40k month if you sold them all quickly. BUT then you can’t bring in more cash unless you sell packages to start at a later day.

The reality of this model is that the $2,500 for each package needs to be spread over 6 months to be ‘earned’. That means your average monthly earnings from each sale is $416.66. In effect, clients are paying for services in advance. And in cash accounting terms that’s fine. In terms of 10k months, it isn’t quite the dream we’ve been sold.

Are you actually ready?

Secondly, were you ready for a 10k month? We’d all like to think we are but really could you onboard the number of clients you need to make $10k. Are your systems, legal and biz support in place for you to spend that time with clients? Are you going to be able to continue your marketing and engagement if you get an influx of clients?

This is another side effect of growing too quickly. Four clients come in, we make $10k in cash and new fears kick in, time we used for marketing disappears and we have to deal with customer service issues.

Suddenly we are facing fears around not having enough time for everything, needing to make sure clients are receiving value for their investment, especially if you haven’t sold a package at this price before. Are clients going to get the transformation you promised them?

We need to ensure appointments are booked and don’t overlap with our life appointments. And that we have an agreement in place so everyone knows the terms like refunds, how long the package is for and what if we disagree.

Oh and we still have to market consistently to nurture the audience that may become our clients in future. We still need to release regular content and newsletters. And show up on Facebook with regular posting and engagement. If we don’t keep this up then we have to start from scratch when the current client’s package finishes which means it will take longer to get more clients.

The actual bottom line

And what about those expenses? You could probably generate $10k worth of clients using Facebook ads any day of the week (with the right help and offer) but how much did those ads cost? How much time is going into managing these pernickety clients? Admin time, management time, going above and beyond because some people are never happy clients?

If generating $10k worth of clients cost you $4k that leaves you with $6k. You have 52 sessions to deliver to four clients who paid for fortnightly sessions in the six-month package. Which equals $115 per session.

Whereas two $2,500 clients from organic Facebook posting and engaging, $500 of expenses. This is only half the number of sessions but more profit per client at $192 per session.