Why the $5K Month is Crap

There is no proof that the $5K month is a landmark number. There. I said it. As online business owners, we know all too well the ads promising $5K months or $10K months. And to the casual observer, it makes complete sense. We all are here for 2 main reasons: Make Money and Make an Impact.

Let me ask you this: When was the last time you sat down and asked yourself why you want to hit a “consistent $5K month or $10K month”? Do you know if the number you choose covers your personal expenses? Your taxes? Your business expenses and more importantly, your big impact goals?

If you are struggling to answer those questions, my darling, you are in the right place. It is extremely rare to meet an online business owner that has sat down and calculated an accurate buildup of her income targets. And I will be the first to assure you, its not your fault if you haven’t. It is not something that we see promoted as a key part of running your online business.

We are inundated with methods to create the perfect sales funnel, email marketing tactics, the latest membership software and how to run the perfect Facebook ad. But what about something as simple as making sure that our monthly income target is going to give us the right amount of money to accomplish what we set out to accomplish? I.E. enough money to sustain ourselves, those we love, enjoy a freedom-based lifestyle and give back to those we love most?

That is where I come in. I want to help you ensure that your targets are backed up with substance, meaning and practicality.

Our personal financial situations are all unique, different, and therefore; have different needs.

I know digital nomads who live comfortably on $1200/month.

I know corporate executives who are scraping by on earning well over $10,000/month.

I know incredible, powerful entrepreneurs that have mastered making sustainable income and have created enough recurring future payments to feel immediately secure and more inclined to believe that the money will come and that it is ok to start spending some of the money that they have earned.

Do I think that any one of these scenarios is ideal? That is not my place to judge. I deeply and whole-heartedly believe that our freedom of choice in our lifestyle is the ultimate gift. That said, all must keep this one rule front and center to remain sustainable and abundant:

You must consistently spend less money than you make.

How does one do this, you might ask? That is my goal. To teach you the ins and outs of running a healthy business and healthy life. And trust me when I say this, it is completely possible.

The secret to getting ahead? You must get more enjoyment out of saving your money than you do spending it.

I’ll give you a minute to let that sink in. Maybe you are thinking, well duh. Of course that is how to get ahead. We all know that.

I think it is important to keep this message as simple as possible. We know that we need to pay ourselves first, spend less than we make and be wise with what is left over. The first step to accomplishing this is to get clear on what your unique monthly sales target should be. This is a powerful tool and I am going to share it with you below. Get out your moleskin, favorite pen and brew yourself a lovely cuppa tea. This is going to be fun. By the time you get through the end of this post, you will be setting yourself up with everything needed to nail your income targets and know exactly what will happen when you do.

How to Build up your Perfect Monthly Sales Target (ok….maybe not perfect but a heck of a lot more accurate than just picking a good sounding number!)

Quick disclaimer: I’m not an accountant. I do not know your business. Please make sure you talk to your accountant before you make any tax decisions.

  • Start with a 5 minute dream-line. What drives you? Why are you in business? What is the one thing that you would love to do for a family member, friend or organization close to your heart if you had infinite abundance? Take a moment to think through what it would cost to implement or pull off (don’t take too long with this – your best guess is fine!) Write this down.
  • Do you have a personal budget? If you don’t (no judgement here!!), I highly recommend ynab.com. I don’t want you to just grab your monthly expense total. Think of the things that you MUST pay to survive. I’m talking bare bones expenses (rent, food, utilities, and small budget for incidentals). This is what we will call your minimum viable income. Write this number down.
  • Next, tally up your business expenses. This should include annual expenses. Let’s start with your annual expenses like Zoom (billed annually), Leadpages, etc. List all of your annual expenses and add them up and divide the total by 12. This takes what I call a “true expense” and creates a monthly amount that you would pay if you were paying for the service monthly. Next, I want you to list all of your monthly expenses and add those up. Add the two numbers together and your have your true monthly business expense total. Write this number down.
  • If you have an accountant, shoot her a quick email and ask her what your effective tax rate is (the estimated percentage, after deductions that you pay in taxes). If you don’t have an accountant, either look at your tax return from last year (it will be on there) or put 25-30% and know that you will want to change this after talking to an accountant. Write down your percentage here.

Woot! Take a moment and pat yourself on the back. The hard part is done! Now it gets fun.

We are going to enter all of this into my Effortless Monthly Sales Target Calculator and you will be on your way to more profit, more aligned income and a goal that you can count on to deliver why you are in business to begin with.

Click here to get access to my Calculator.

Follow the directions in the sheet (start with the first tab), enter in your numbers and you will have your first On Purpose Monthly Sales Target.

Want me to spot check it? I would love to meet you and make sure that you have it set up correctly. I am all about connecting and chatting face to face (via Zoom) is the next best thing to sitting down at a local coffee shop. Click here to schedule a pitch-free 15 minute session to go over your numbers and make sure that you know how to use this spreadsheet. I look forward to meeting you!

Now you are on your way to revenue targets with actual PURPOSE rather than being supported by a number pulled from thin air.  Now go and do your thing, chica.  {LOVE to you!}

Blog Comments

[…] idea that I need to make 6 figures or even high 6 figures to be successful.  I came across this amazing article from Amber Dugger that totally changed how I view the kind of revenue I needed to be […]

Dear Renee, Thank you so much for the shoutout! I am so happy to hear that the calculator has helped you. Isn’t it freeing to know your number? So excited for you! 🙂

So thankful for your help and encouragement over the last couple of months. I have my budget in order, YNAB working hard for me (in the future), and life is much less stressful. Your systems work for the every-day-entrepreneur, like me, who are slowly building their business and not making millions the first year.

So happy to hear that you are loving your new system, Jen! Thanks for the kind words! 🙂

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