Let’s get into the nitty gritty today, because when it comes to creating a successful business, it’s vital that you understand where you’ll see the maximum return for your time/energy/expenses and what you need to do/earn in order to achieve financial goals in your business. The first thing to understand is why this matters. Ever found yourself saying I want to make (lets say $5000) this month? But you have no idea how to get there? Using ROIs and KPIs we can actually calculate where to spend your time and what you need (ie how many options, confirmed clients/partnerships/affiliate income) specifically in order to hit those revenue goals, you with me?
First of all lets start with ROI (Return on investment). You guys know I’m big on time management and productivity, so the first step is to write down every single task you have to do to run your business. So in addition to the obvious (doing makeup), think of all the other tasks that you have to do, a few examples might be scheduling social media, invoices, reaching out to clients, creating moodboards, filming content, working on a your blog/podcast/YouTube channel, updating your portfolio and writing copy for social media.
Next you want to work out from those tasks, which ones bring you the greatest return? You might be measuring this in how many jobs you book, how many new clients you meet with or your monthly profit. You want to spend some time over the next week working out how long each task takes you and record that process. Then you can evaluate what is taking the most time, what is essential, and what equates to a larger return (ROI).
The tasks with the largest ROI are the tasks you need to prioritize. As you grow as an artist it’s also important to remember that you can eventually delegate tasks and outsource. If you decide to get an agent, manager or VA/PA then you may have someone else who can find you clients, chase invoices etc, leaving you more time to focus on the activities that bring you the biggest return (monetary or otherwise).
Now let’s focus on KPI’s – (Key Performance Indicators). Simplified, this is a way to measure how effectively you are achieving your business objectives and gives you something specific to work towards. The KPI’s that are most relevant to you depend on the industry you work in and the job you do. To make it specific to MUAs, the KPI’s I would focus on is your revenue per client, and if relevant, per social post.
The first thing you need to do is look at what revenue goal you want to set as your intention for the year. Then break this down into 90 day sprints (quarters), months and weeks. Perhaps you are a freelance artist so your rates always vary, if this is the case then work out your average rate from all the jobs you have done over a one year period. Then, using this information, work out how much you would have to make weekly, monthly and quarterly to hit your yearly target revenue (net profit). You may also have things like income from affiliate links, sponsored content or partnerships that you can add into this in addition to your general MUA work.
If you work in a salon you will be able to work out how many of each treatment you need to sell, how many services and how many products you need to sell to make the net (money you take home) profit. The important thing in both cases is to look at which KPIs are helping you achieve those bookings.
Everything has a conversion rate, whether that’s word of mouth, your website, a landing page, a webinar, a link in bio on social media, social media directly or maybe advertising you’ve paid for in the form of Facebook ads etc. While you may not have specific data you can track, as in how many people booked you after seeing your website etc, you can gage from doing a little digging, where or who most of your work is coming from. Using this information, even if it’s only an estimate helps show you what is working/what to do more of and where you might need to improve/or what to disregard.
Once you know how much your revenue goals are for the year, you can then break down what you would need to earn per quarter, per month and per week to hit that target. From there you can work out given your current rates and any additional streams of revenue, how many clients you would need to book each week, month and quarter as well as (if this is relevant to you) how many sponsored posts you would want to aim to get, how many partnerships, how many digital products you would need to sell to make those weekly, monthly and quarterly targets, so you can total up what that translates to in bookings and jobs needed. You also want to take into account things like your expenses so you know what else you need to cover in order to actually make a profit.
The reason this is all so vital is because it helps you see pretty quickly what you need more of, what’s bringing in the most income and you know how far you are from hitting the targets you set yourself. For example, if looking at your financial forecasting you want more income from affiliates one month, but you’re still far from hitting the numbers you’ve set towards your goal, then this information pushes you to take action. That could be in the form of focusing on more outreach to brands you love, or starting up an amazon shop if you haven’t already.
To sum up, all this information guides you on what you should be doing now and in the future, It gives you something very specific to focus on, and helps you take action that has an impact on your business and revenue goals. It shows you the difference you make in revenue if for example you were to put your rates up, or offer a digital element to your business which could result in working less to achieve the same revenue goal if that’s what you want, or, an increase in income. This is such an important part of running a business, and I’m so excited to announce that we’ve now added a digital MUA Business Planner to Level Up.
If you’re a Level Up Student you can now find this in your free resources section in the course, and it’s available to use in digital apps or you can download and print it out. This planner covers everything from goal setting, financial forecasting, organizing tasks, contacting clients and handling invoices. I’ve been using it myself for the past few weeks on my iPad in GoodNotes and honestly don’t know how I survived without it!