Last year, I sold my NYC apartment and deposited the largest check I had ever seen into my bank account. At that moment, my wife and I qualified as some of the wealthiest homeless in the city. Well, we weren’t technically homeless because our friend was kind enough to let us stay at her shoebox studio apartment while we waited to close on our new apartment.
All of this new-found money would soon disappear when we purchased our new apartment, but it still got me thinking about how much money it would take for me to feel truly successful. At what point would I look at my bank account, smile widely, and proclaim, “I did it!”
Do you know what that number would be for you?
It’s a very important question to answer. Your number should guide your decision-making process because certain business activities will either move you closer or further away from your success. Those are the only two directions.
But unfortunately, there’s no easy answer. A lot of people brush it aside and think you can never have too much money, so their goal is to have as much as possible. Or they think they’ll just try to build the biggest business they can. However, “as much as possible” or “as big as possible” is not a measurable goal. That means you could go through your entire life and never feel truly successful.
Calculating your number is not easy, but it’s also not rocket science. There are just two variables:
- The cost of living your ideal life
- The amount of “extra” money you need to satisfy your ego
If you add up those two numbers, then you know how much you need. Now for some people, #2 is zero, but for others ego definitely plays a factor in determining how much money will make you happy.
So the key here is to define as precisely as possible your ideal lifestyle. Only then can you calculate how much you need to make in your business. And only after that, can you expect to actually create a plan to achieve this goal. So, as you can see, you need to think backwards in order to move your business forward.
Start At The End
So before you start planning for 2014, I recommend you take some time to seriously think about where you want to be five to ten years from now. What does your business look like and what does your daily life look like?
Then, based on your long term goals, work backward to determine the key milestones you need to hit in the next one to two years. And, again, work backward from there to determine the key milestones you need to hit in the next few months and quarters.
By using this “backward” approach you’ll ensure you are moving forward toward your definition of success.
And if you’d like more information on how to reverse-engineer your goals, I have good news for you…
My friend and mentor Dave Lavinsky has published a book on this exact topic, called Start At The End. Dave is one of the leading authorities on business planning, and in his new book, he lays out a step-by-step system for achieving your business goals.
And the good news is that you can get your copy for free (just pay S/H).
P.S. Want a sample of Dave’s business planning ideas before you grab your copy of his book?
Check out Dave’s Forbes article: Business Plan Template: What to Include