Planning + Finance

How to price your sessions, classes, workshops, retreats, and teacher training holistically and profitably.

Holistic Session Class Retreat Workshop Training Pricing

It’s not unusual for Transformerpreneurs to start pricing their sessions, classes, workshops, retreats, and teacher trainings after researching what their nearest competitor is charging for the same or similar transformative offerings. 

If the likely costs associated with giving, hosting, facilitating or delivering your Product Service is less than what you’re intending to charge for a minimum number of sales it’s easy to fall into the trap of assuming you will or are making a profit.

This approach isn’t a bad start but it is only part of the Profitable Pricing story and doesn’t guarantee that your business will make a profit over the course of a year, i.e. a timeframe that is longer than the duration of your specific Product Service offering.

Beware of modelling your products, services, and business on your competitors without knowing their specific financial goals, cost base, advertising budget, and number of clients, enrolments or attendees. To do so can be misleading and risky.

By setting a price you are attempting to convey value. Your intended market will tell you if it values what you’re offering by paying the price you’re charging, or not, regardless of how much it costs you to create, offer, and transfer that value.

So, if you want and need to know that what you are offering and working hard to deliver will make a healthy profit your pricing must work holistically, I.e. at a Product Service level and at an overall business level.


What is a holistically profitable Product Service?

It’s an exchange of value that generates enough Gross Margin (Price - Costs of Sale CoS) in sufficient quantities (Sales Volume) to cover (single product business) or part-cover (multiple product business) your Business Overheads while generating a surplus (Operating Profit).


Get to know your Holistic Pricing Variables.

Successful Transformerpreneurs MUST know and work with the following Pricing Variables in order to arrive at their Minimum Viable Prices (MVPs) for their suite of Product Services.

  • Enrolments (e.g. 1 for private sessions, 10 for group classes, 15 for teacher trainings)

  • Instances (e.g. 200 private sessions, 100 group classes, 4 teacher trainings per year)

  • Variable CoS (e.g. instructor fee per student, wellness package, certificate printing)

  • Fixed CoS (e.g. advertising, space rental, specialist instructor fee, team travel expenses)

  • Business Overheads (e.g. your salary, marketing fees, subscriptions, equipment)

  • Operating Profit % (the profit your business wants to make on its product service sales)


How do I use these variables to calculate MVPs for my suite of Product Services?

If the instructions below look a little too daunting for you sign up your FREE copy of the Transformerpreneur.com ‘Profitable Product Service Holistic Pricing Tool’ at the end of this post and the hard work and calculations will be done for you!

(1) From your records (or estimates) note down your yearly Business Overheads.

(2) Decide what your Target Operating Profit % for the year will be (20% is a healthy profit).

(3) Name and list your Product Services.

(4) Add the Minimum Number of Enrolments alongside each Product Service.

(5) Add the total Variable Costs of Sale (CoS) alongside each Product Service.

(6) Add the total Fixed Costs of Sale (CoS) alongside each Product Service.

(7) Add the Minimum Number of Instances per year alongside each Product Service.

(8) Add together the Variable and Fixed CoS for ALL Product Services and note it down.

(9) Calculate Budget Income by adding (1) + (8) and dividing the answer by 100% - (2).

(10) Subtract (8) from (9) to get Gross Margin and note it down.

(11) Calculate Gross Margin % by dividing (10) by (9) and note down the answer.

(12) Calculate Operating Profit by subtracting (1) from (10) and note down the answer.

(13) Multiply (4) x (7) to calculate Enrolments per Year for each Product Service.

(14) Multiply (4) x (5), add the answer to (6) to get the Total CoS for each Product Service.

(15) Multiple (7) x (14) to calculate the Total CoS per year for each Product Service.

(16) Divide (15) by 100% - (11), divide by (13) to get the MVP for each Product Service.

Click below for a Multi-Product Service suite Transformation Business example.

Adjusting your Pricing Variables will generate updated Minimum Viable Prices for your suite of Product Services that allow you to assess how your intended audience, students, and clients will value your offerings.

For example, if your adjustments generate an enrolment price for Teacher Training that is double what your competitors are charging you’ll have to seriously consider making some more significant changes to your Pricing Variables.

Likewise if your pricing is coming out significantly lower than your competitors you may have to check that you’ve thought of and included all related Costs of Sale (CoS) and Business Overheads in your calculations.

Are you already, or intending to offer any of the following non-exhaustive transformation modalities as sessions, classes, workshops, retreats, or teacher trainings to your clients, customers, and community?

Hypnosis
Meditation
Music
NLP
Past Life Regression
Photography
Poetry
Reiki

Acupuncture
Art
Astrology
Bodywork
Breathwork
Coaching
Ecstatic Dance
Film

Satsang
Shamanic Ceremony
Tarot
Theatre
TRE
Writing
Yoga

Save your time, effort, and brain cells learning how to holistically price your sessions, classes, workshops, retreats, and teacher training by signing up above for your FREE copy of the done-for-you Transformerpreneur.com ‘Profitable Product Service Holistic Pricing Tool’ Google Sheets template (as shown in the example screenshot above).

Creating an intentional, empowering, liberating, and financially rewarding Lifestyle Transformation Business that serves you as well as your clients.

TCC - Blog Post - Template - 0011 - Creating A Profitable Transformation Business - 800px.jpg

Are you already building, or are you seriously thinking about starting, a transformation business as any of the following?

A yoga teacher, breathworker, ecstatic dance facilitator, astrologer, reader, or coach?
An artist, craftsman, designer, author, poet, musician, or teacher of your unique craft?
A practitioner of one of the many transformative modalities blossoming in the world today?

Are you working hard to create, develop and deliver sessions, classes, workshops, training, retreats, and related products and services that transform people's lives?

Is your Transformerpreneur Life Business ‘kind of working’ but you just know it could do so much better for both you and your clients? Do you feel like you could begin making significant positive changes to your life and business if you only knew exactly where to start?

Do you become overwhelmed, confused, frustrated or lost when trying to start, fix or develop your business so that it works consistently and predictably for you, rather than against you, most of the time? Do you sometimes brush your business issues under the carpet, telling yourself to worry about it later?

Is this you when dealing with business numbers, maths, models, money, and finance?

Transformerpreneur Small Business Finance Health Check Frustrated Lost Woman

Do any of these ‘symptoms’ or ‘effects’ sound familiar?

You rely on your bank balance as an indicator of your personal and business financial health.
You’re not sure how much you should be working ‘in’ your business vs ‘on’ your business.
You don’t really know how much you earned last year, or what you’ll earn this year.
Your pricing is based on how much you can get or what your competitors are charging.
You’re unsure how many of your services to sell to survive, thrive, and meet your goals.

Your go-to reason for why business could be better is that you need more clients.
You don’t know which of your services makes and which loses you money in the long run.
You think you and your business are making a profit but not really sure how much.
You’re starting to realise you need to know what you don’t know about your business.
You’re not clear what your breakeven point is or what to do to ensure you’re always above it.

You have no reliable way of knowing if something in your business is helping or hindering you.
Your idea of working to a budget is doing less of what you want and more of what you don’t.
Your record-keeping starts and stops with tracking hits, likes, views, or shares.
You take a weekend or more to pull together basic information about your financial position.
You struggle with cash flow, leaving it to hope, chance, a wing, and a prayer, to survive.

You get by earning just enough to live an ‘edited minimum version’ of your dream lifestyle.
Your business decisions tend to be short-term, spur-of-the-moment, and gut instinct.
You rarely consider where you want to be financially, in one, three, five, or ten years time.
You don’t have specific financial goals for your life or your business.
Or, if you do you don’t know how to get where you want to go from where you are now.

If one, any, or all of the above reflects your reality, there is a more intentional, empowering, and financially rewarding way to start, build, expand and run your transformation business.

Transformerpreneur Small Business Finance Health Check Freedom Happy Woman

Fuelling your vision.

A vision, mission, purpose, values, and a powerful why are essential business prerequisites.

These keystones give meaning to your business, its products and services, by colouring how they interface with and relate to your clients. They help you describe what your business should look like, how it might feel, who it will support, and the problems it solves.

Thankfully, they also serve as a strong foundation platform, grounding and anchoring you to what matters most, during times of inevitable change, upheaval and transition. They remind you of your overarching loving intention and enduring creative direction whenever and however you’re thrown off course.

This platform is needed as you refine each and every aspect of how you create and deliver value to the clients that you have and will come to know and love. It is these clients, your family, your tribe, that you are co-creating your business with around its shared meaning.

However, this platform alone, despite your best intentions, will not build and maintain a successful, thriving, and robust transformation business; A prosperous living, breathing, loving entity that serves, supports and sustains its owner, team, an expanding client community, and your charitable endeavours, consistently, predictably, profitably, and with longevity.

It’s the fire, but it’s not the fuel.

Transformerpreneur Small Business Finance Health Check Purpose Vision Fuel Fire

How to thrive in longevity.

The structure of your business is made up of you, your team, your clients, your products and services, and all those fortunate enough to benefit from the ripple effect emanating from this, your most important work.

In an ideal world these structural elements are synchronised, acting in unison, speaking the same language, while working together toward a common goal. As an holistic, healthy, living, and loving entity they’re strong and powerful, able to overcome any obstacle that stands in the way of your mission to help others.

Working together, the keystones, the foundation, and the structure, reflect how the ‘building’ of your business and its component parts looks, feels, and behaves.

But, there’s something missing from this picture, without which a building could never come into being. This critical component is often overlooked or forgotten once a building is complete and open for business.

When you’re developing a building you need scaffolding to help erect it as it’s being constructed and to extend, maintain, and repair it on and off throughout its lifetime. Its purpose is to provide safety, protection, stability, access, and critical information about it’s physical and operational condition so that essential changes, updates, and upgrades can be made as efficiently, effectively, and quickly as possible.

It’s literally the framework required to construct and maintain a piece of architecture so that it fulfils its function and serves its purpose for as long as it’s designed to do so.

Transformerpreneur Small Business Finance Health Check Numbers Scaffolding

Weathering the storm.

In your business, the scaffolding is your systems, data, records, and reports. It’s shorthand for the invisibles, or the intangibles. These invisibles are your business numbers, and they are essential if you want to understand, secure, refine, enhance, grow, and expand your business, and safeguard your livelihood.

More specifically, your business scaffolding alerts you to what’s working and what isn’t with timely up-to-date financial information that’s imperative to the management and operation of a profitable business; A successful business, regardless of its size, that not only meets your needs but helps you achieve your goals, while it, and you, adapt to expected and unexpected changes as and when they arise.

Despite our efforts to deny, avoid or control it, a business is always expanding and contracting with varying degrees of intensity. Its success and longevity depends on whether it’s flexible enough to react, respond, and adapt to the competitive nature of the market and the cycles of the perpetual economic storm.

However, unlike a building, to weather the storm, a transformation business needs scaffolding in place constantly so that vital and relevant information is readily available when and where it’s needed most. With your business scaffolding erected you are much more able to navigate what can quickly become business life or death financial decisions with confidence.

This is essential when building your business.

When up, running, growing, and serving clients, it’s critical.

Transformerpreneur Small Business Finance Health Check Numbers Systems Support

No more flying blind.

Numbers let you see the invisible aspects of your business and show you what needs fixing inside and outside it, and by when. They direct you where to look to strengthen or replace part of your business structure and how to make regular adjustments and improvements.

Numbers, when you know and understand them, shed light on your business reality, no matter how simple or straightforward it may seem, giving you the power to amplify what’s working and let go of what isn’t.

They give you clarity, certainty, and confidence.
They bring order to unwanted chaos and show you the truth about your business.
They help you organise your business so that it saves you time, money, and energy.
They release you from exhausting ‘dog chasing its tail’ mental and emotional loops.
They let you be more proactive and less reactive.

They open the door to new opportunities and collaborations.
They quantify the necessary actions required to prioritise and achieve your goals.
They allow you to set realistic goals and track your progress over time.
They provide the information to help you reach difficult and complex decisions.
They have the power to forecast and predict problems before they happen.

They set you free from making false assumptions and always having to use guesswork.
They lead you toward a healthier, truthful relationship with your work, craft, and business.
They empower more creativity so you can expand your business and life with confidence.
They provide a map of how to arrive where you want to go, when you want to get there.
They act as signposts on your Transformerpreneur Business Life Journey.

Without them you’re left in the dark, flying blind, feeling lost, battling through the storm.

Transformerpreneur Small Business Finance Health Check Planning No More Flying Blind

Heal your clients and your business.

There is truth in the Buddhist saying that we must help ourselves before helping others. This timeless and time-honoured modus operandi extends to your business

If you don’t do the work to look after your transformation business as well as you do your clients, you’ll all suffer unnecessarily. You won’t be able to serve yourself or those in need of your service effectively, no matter how well you create and deliver your value.

Things can and will go wrong.

You’re a master of life-changing transformation. You guide clients in person, or indirectly with your art and craft, to look inwards. Through your work, an insight, sufficient to facilitate a change of perspective, reveals their truth in the moment and prompts a desirable change in attitude, outlook, and behaviour.

Clients are encouraged to look to the past, present, and future to determine patterns of thought and feeling that are limiting their enjoyment of life or sabotaging their impact in the world, now, today. You can use the same process to transform and heal your business as well as prevent future ills, or dis-ease.

Your business numbers reveal countless untold insights if you know where to look.

Transformerpreneur Small Business Finance Health Check Training Coaching Support Kite Flying

Enjoy freedom, flexibility, and flow to create peace, ease and grace in your life business. 

Do you want you and your business to be more successful?
Do you want to own your business numbers so you can be more strategic about your finances?
Do you want your business financial outlook to be more informed and longer term?
Do you want to feel more in control of your time, money, creativity, and purpose?
Do you want to live life more freely, on your terms?

Transform your business to work fully for you and your clients, rather than the other way around; learn how to read, understand, know, love, and take responsibility for your numbers.

It’s time to power up your Transformerpreneur Life Business strategy with a new level of financial information, understanding, knowledge, and skill?

Transformerpreneur Lifestyle Transformation Business Finance Health Check Strategy Growth Money.jpg

Start erecting your scaffolding today and use your numbers to reach your goals and realise your vision.

How your Business Creditors help you save, turnaround, and grow your struggling professional client service consultancy, design, marcomm, PR, digital or creative agency business (checklist).

Save Turnaround Grow Your Struggling Consultancy Practice Studio Agency Business Creditors

A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.

Click to listen to the audio or read the full transcript below and sign up for my Creative Core newsletter and I'll send you a quick-start business turnaround email course complete with 96 point action checklist and business turnaround strategies you can start using today.

Total Business Turnaround
Part 08 | Business Creditors

Your creditors, on the whole, are really the suppliers who have helped you grow your business. Without them, you would have nothing to make or sell. No product, no income—nothing. They helped you when you first got started and have been there for you throughout. Therefore, you should do everything you can to return the favour and ensure that they are well looked after and treated at all times with the respect and professionalism they deserve.

Business Continuity

You must maintain your integrity, honesty, openness, and you must recognise your obligations and make good on your debts wherever possible. In extreme circumstances, especially when the future of your business is in the balance, you should look at everyone associated with your business as suppliers and creditors, and for your business to survive; you have to look after them all. You can’t focus on one to the detriment to the other; otherwise your business will quickly start to fall apart.

Statutory Creditors

The main creditor you will have, and in the UK probably the main reason why you may have had to reach the decision to liquidate your company, is the government; especially if they are pressuring you to pay overdue monies owed for VAT and the Employee Tax. Because of the length of time that it takes for communication to pass down the ranks within government agencies, they can always come in and demand monies owed. However, once you have gone into liquidation or administration, it is the responsibility of the insolvency practitioner to handle any enquiries from the tax collectors.

You as Creditor

You will probably have to forgo any money you’ve invested in the form of personal loans or through credit cards. If you must get paid back, the best you will be able to do is to pay yourself only the absolute minimum to help ensure the continuity of the firm. You may receive a dividend from the insolvency practitioner, but that is dependent on the amount of funds you have invested as directors loans.

That dividend, however, will not be enough to pay the regular day-to-day bills of your credit cards and personal loans. Moreover, if you do receive anything, you won’t receive it for about 24 months, or until you’re new company has fully paid for the old business. You may have to consider personal debt management to make it through.

Problem Creditors

There are many creditors who will, more or less, work with you. There are others, unfortunately, who will more likely cause trouble. This will happen through unprofessional behaviour, rumours, and bad mouthing. The best way to deal with these issues, not to mention the creditors behind them, is to communicate as openly and fully as you can.

Responsibility and Understanding

It’s good practice to always keep the other person’s situation in mind and to be as understanding as you can. Remember that to a greater or lesser degree, everything that is happening to you and your business has an impact on everyone connected. You must remain professional and helpful. You are part of the reason you and the creditor are in this situation, but so is he.

Be as honest and helpful as you can, since by doing your best to resolve the situation, they will respect that once they’ve had a chance to vent and feel heard by you.

Repayment Schedules – Preferred Creditors 

You’re not meant to give any creditor preferential status, but there are business-critical suppliers and creditors that must be paid for you to continue working. Prioritise as best you can, but in the short-term you should only pay business-critical creditors and suppliers to ensure continuity and keep them on a realistic payment schedule so that your month-to-month cash flow and payments are kept to an absolute minimum. 

Repayment Schedules – Other Considerations

On the whole, it’s best to keep any agreement to repay ongoing business-critical suppliers on a gentlemen’s basis. In other words, try to leave it at a handshake.

Any commitment above that at this stage will simply put you under stress while you are trying to get the business going again.

As long as your intention is to make good the relationship, and you keep in regular and professional contact, then you’re doing your best and doing the right thing. So many others wouldn’t go this far and your creditors will, for the most part, respect this even if they are upset that they aren’t getting paid straight away.

Software Licenses and Copyright Issues

When it comes to software license agreements that are not carrying over, things can become very complex. Check the terms and conditions as you may have to re-buy certain items you thought you’d bought and had value in the purchase consideration for the old company.

Some software license agreements restrict the license transfer to restructured companies. Often, these companies will invoke their terms and conditions and insist that you purchase new licenses.

Photographers and other suppliers who hold the copyright of their work will keep a tight hold on the  copyright until they’ve been paid and that can lead to client issues. They may even contact your clients directly and demand payment, as they may ultimately be the end user of the copyrighted material. Deal with these suppliers in as timely a way as possible.

How Business Finance helps you save, turnaround, and grow your struggling professional client service consultancy, design, marcomm, PR, digital or creative agency business (checklist).

Save Turnaround Grow Your Struggling Consultancy Practice Studio Agency Business Finance

A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.

Click to listen to the audio or read the full transcript below and sign up for my Creative Core newsletter and I'll send you a quick-start business turnaround email course complete with 96 point action checklist and business turnaround strategies you can start using today.

Total Business Turnaround
Part 05 | Business Finance

As a leader of your business, you need to be versed in at least the basics of finance, record keeping and basic reporting. It would help you if you went beyond these, but any practical financial knowledge will be useful. If you simply don’t have the time or the inclination to learn about finance, you’d better make sure you’ve got someone you trust who is qualified and understands finance to lead that aspect of your business.

However, you must not simply abdicate your authority. This is an opportunity for you to delegate authority and monitor performance. You need to stay on top this, whether you know anything about finance or not. 

Maintaining Cash Flow

We have already discussed how you can keep the cash flowing by billing promptly, avoiding over-trading, trimming your inventory and other other methods. Now we are going to go over a few other cash flow issues, like cross over, the dangers of the transition period, draw down availability, purchased debt and other issues you may need to deal with during your restructuring.

Issuing Invoices

Getting paid means sending out invoices, but what is the best way to go about it? It is more than just printing up a bill and popping it in the mail. You need to understand that invoicing is a multi-stage process, the importance of building relationships, money fears, sales financing and other issues.

Chasing Invoices

There are no hard and fast rules for chasing invoices, but once you’ve delivered your product or service to your client's satisfaction, it all comes down to ensuring the correct information is placed on the invoice, getting it into the hands of the right people and polite, efficient and consistent communication with the relevant people and departments until you either get paid or have to take legal action.

Credit Cards and Expenses

If you can’t show strong accounts and positive cash flow it’s unlikely that the business’s new bank will provide you with a simple debit card let alone a credit card of any form even with a low credit limit for at least 6 months. This is incredibly inconvenient especially when unexpected and minor expense items crop up during the transition when cash flow is at its most restricted.

You’re only options are to pay cash, write checks, have staff pay and reclaim on expenses, don’t pay, or use your own personal credit cards. Clearly not making the purchase is the preferred option, but some of these expenses will be legitimate operational expenses and can’t be avoided. You must be sure that you will be able to cover the expenses at the end of the month with salaries.

Dealing with Suppliers

Suppliers form a major part of your organisation. Without them, it’s highly unlikely that you would be able to deliver your products or services. In fact, without your suppliers you would have no business. It’s best to establish a deal mentality, one where you are dealing and negotiating to try and arrive at a win-win solution to both parties.

You need to work towards loyalty and it is important to be honest and return favours where and when you can. If your suppliers are no longer able to help you through difficult times, then you tried and must move on to find new suppliers. Business is business, but you must maintain integrity, honesty, openness, and make good on your debts with your suppliers if that’s how the relationship is ending.

Handling Creditors

The other side of the coin is your creditors. How you manage those you owe money to is every bit as important to the success of your business endeavours as how you manage those who owe money to you. Here are some suggestions:

  • Stop spending

  • Offer controlled repayment

  • Reserve account

  • You as creditor

Personal Guarantees

Throughout the early years of your business, when you getting it established, you will be required to sign personal guarantees to secure financing for your business in the form of loans, leases, purchases, and financing facilities. When going over your personal guarantees, you will have to consider a number of issue including bank overdrafts, business loans, defaults and late payments, sales financing and company purchase agreements.

Director Loans

Depending on your personal financial position, you may have funded your business with personal loans and credit cards and these may still be outstanding. This can cause considerable cash flow problems for you personally if your business is in trouble and going through a restructuring process. Make sure you stay on top of your credit reports and keep your cash flow positive.

How Business Planning helps you save, turnaround, and grow your struggling professional client service consultancy, design, marcomm, PR, digital or creative agency business (checklist).

Save Turnaround Grow Your Struggling Consultancy Practice Studio Agency Business Planning

A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.

Click to listen to the audio or read the full transcript below and sign up for my Creative Core newsletter and I'll send you a quick-start business turnaround email course complete with 96 point action checklist and business turnaround strategies you can start using today.

Total Business Turnaround
Part 01 | Planning

Without planning, no business can succeed. You need to know where you are, where you want to be and how you plan to get there and that begins with your business plan. Of course, with today's economy and the immediate demands it places on you and your team, strategic planning may be the last thing on your mind. After all, it is hard to do the kind of big picture thinking it takes to work ‘on’ your business when you have to work ‘in’ it all the time. That, however, is precisely what you must do.

You can survive the turmoil by establishing and pursuing a goal worth achieving. This means examining your aspirations and expectations, your investment and how you plan to exit, the numbers you need to see to make it work, possible buyers and the value of your company, turnover, profit, and your business plan. All of these are important factors in determining winnable goals for you and your company. 

Aspirations and Expectations

You begin by examining what you want to achieve. Once you have determined that, look at your business and see what you can reasonably expect from it. Will your business, as it stands, fulfil your aspirations? Does it exceed them? Does it fall short? Remember: In all likelihood, you will, at best, only achieve to the level of your expectations. You can avoid this by examining and basing your plan upon an honest assessment of:

  • Your expectations – What your business realistically can do.

  • Your goals – What you really want to accomplish. 

  • Your education – The experience and skill your team and you bring to the problem.

  • Your focus – The way you use that knowledge and experience.

Your Investment and Your Exit

People change over time and so does the way they see things. You and your partners may have a very different perspective on your business today than you did at the start. Keep in mind that times of difficulty and upheaval create the perfect conditions for change. For you and your partners, this may mean a change in how invested in the business you wish to be or even how you plan to exit from it and under what conditions. 

The Freedom Calculator

For most people, economic freedom and freedom in general are almost one and the same. It is merely a matter of what you want to do with your money. The Freedom Calculator takes relevant data including your living expenses, dream realisation and re-investment figures and gives you a Capital Critical Mass that, at a reasonable 5% - 10% per annum managed investment return, will allow you to live the life of your dreams.

Target Buyers and Investors

If a listing on the alternative stock exchange is not practical, then you need to find investors or even buyers for your company, which might include your existing management team, if you wish to reach your Exit Point.

You need to identify the gaps between your services and those of your competition. 

Consider joint venture partnerships, finding suitors among your larger competitors and your clients, and modelling your business on their best practices to create a match.

Target Company Sale Value

While the sector your business is in, the current market conditions, and how strong a competitor you are all play a role in determining the value of your company, your business can realistically be valued as a multiple of profit or turnover, or a combination of both. Research into this area will help you solidify your aspirations and expectations and understand the key issues that potential investors consider. This will also help you tailor your business plan, investment presentation and negotiations to achieve the best possible outcome.

Target Turnover and Profit

Calculating your Target Turnover and Profit with data including target company value, an estimated industry earnings multiple, profit figures, target turnover and current turnover, provides an overall structure to the plan as well as a timescale. Any potential investor wants to know what return they may make for their investment over a given period of time and what the risks involved are. This also allows you to figure out the growth you will need to achieve over a fixed period of time in order to reach your Exit Point. 

Company Valuation Methods

You can use your projections with the Discounted Cash Flow Method to determine a reasonable, ballpark value of your company. Along with the Discounted Cash Flow Method you should consider your pre and post-money company value, investor equity, negotiation, incentives, areas of increasing value, goodwill, and multiples of earnings. All of these play a part and should be part of your calculations. Remember valuing your business is an art, not a science. However, it is better to be up to speed with the various methods so you are prepared to justify your own valuation of your company.

The Business Plan

When you are developing your business plan, you need to assess the roll you are to play in the business, how involved you will be and what you want to get out of it so you can concentrate your efforts right where they need to be. You must also take into account the functions of the business—the service it provides and the support it gives to you and the other owners—as well as the need for a healthy combination of inward and outward focus.

Finally, you need to be able to ensure consistent planning and follow-through in order to keep from making mistakes that sap time, energy and money from the growth of your business.