Ep. 92 What is Your “Enough” Number?
Hey everyone, this is Julie. I’m the worst podcaster ever. I’m so inconsistent. But here I am and I got a great question today from a Digital Insider and I thought, you know what, I’m just going to pop on my headset and record this as a podcast.
So the question was, what is your enough number? And this particular person said that they think that they’ve always struggled with building this 8 figure business but then trying to align that with freedom and fulfillment and family goals, it just seems like such a risk to grow with a huge company and employees to the 8 figures, doesn’t even make sense.
So I thought, okay, let me answer this question because it’s an amazing question, and I realized as in enneagram 6, I actually am not the typical personality type of an entrepreneur. So I will regularly see people on Instagram saying, “Oh, I want to go from 3 to 6.” Or “I want to go from 1 to 2.” Or whatever their revenue goals are, and of course at Funnel Gorgeous we set revenue goals, but we set them not because we’re trying to gun for some particular number, it’s more that we want to know that the company is growing. So my enough number personally doesn’t really have to do with my business revenue, it has to do with the number that will help me retire, or stop working should I choose, or if I need to or Iwant to.
So I actually work with Ari, you’ve probably heard me talk about him. He helps us with some financial investing and things, and he talks a lot about this number because most people don’t know what do you actually have in the bank or in investments in order to retire and live comfortably in the lifestyle that you’re at now, for the remainder of your years. And that number is really hard to come up with. I think for me, I would say that that number is about 5 million dollars, as is you know, divested into investments and some cash. But that would be probably the number that I’m looking at. So once I know that I have $5 million invested in various places and accessible to me, I would say, that’s the point at which I could stop working if I wanted to, but I don’t want to.
So in the meantime, I just continue to grow a business that throws off capital that I can use to invest, knowing that I’m thinking, okay, it’s probably going to take me, how many more years is it going to take me to grow that? So here I was answering this question and the reality is that what kind of business would you rather have, a $2 million business that throws off nearly a million in profit, or would you rather have a business that’s making $10 million and throwing off a million in profit? And the bandwidth of a $2 million business is very different than the bandwidth of a $10 million business.
Now if you are motivated by impact, or volume or status, or you want to have a huge reach or you want to grow a big team, you might answer that question and say, “I would like a $10 million business throwing off a million in profit, because probably at $10 million I have a majority of people doing the work, I don’t have to be doing all the things or wearing all the hats, so I’m comfortable with that.” And that’s cool. Or you might say, “I don’t want 50 employees. I want a $2 million business. I want a small team of 5 or 10 people, and I want to be hands on in the business.” So these are the decisions that you’re making. So now if it throws off a million in profit and you have to put whatever, 30 or 40% into taxes, that’s earning, let’s just say for easy math, about $500,000 a year. So if you’re trying to get to $5 million in cash you’ve got to live off that money and then save it. So it’s going to take you 10 years or so to build a business, to build enough cash reserve and investments to retire. And the average person retires at about 65. So you know that’s kind of how the math works. Very macro, not very detail oriented.
So I have this unique vantage point of working with a lot of clients, so I can see on the back ends of a lot of businesses, and understand sort of the lifestyle implications of those businesses. So here’s some things to think about. I’m not going to give you any answers of what is your enough number, but here’s some ideas.
The first thing is that Digital Insiders is my current personal business. And that is a capped business, it will not scale beyond about $2 million a year. I do not want it to scale beyond that. I could grow it and change it and morph it, but I like it. And it has been a steady million dollar a year business, and as I cap out at 100 paying members, it has grown, but that’s going to be about a $2 million dollar a year business, it’s going to have good profit margins, and it’s going to be an amazing way to spend my years working. Now the thing about that business, it’s a full time, 40 hours a week position. Because it’s a small company, I don’t have a big team doing everything, I’m doing a lot of the coaching. So just very, it is taking a lot of my time. So if I wanted to have a business where I didn’t have to talk to a lot of people, where I didn’t have to spend 30 hours a week coaching through Voxer and Audits and Hotseats, then I would need to choose something else.
Now Funnel Gorgeous is a completely different animal. That has a coaching aspect to it, but it’s not a one on one coaching aspect. And then it has course sales, it’s a more scalable business, and we’ve also been rolling into software. That has a much larger team, Funnel Gorgeous in on track to do $4 million this year with about a 40% profit margin. There’s also a second CEO so the capital it throws off has to get divided differently. Plus we have a lot more people on payroll. And the thing with Funnel Gorgeous is that there’s a lot more scaling team, logistic systems management, and less of the heavy duty, intensive coaching.
Now the reality is that for the past couple of years, Digital Insiders and Funnel Gorgeous have kind of thrown off, at least in 2020, I would say they threw off about the same amount of capital. Um, yeah. Sort of. About that. So I can kind of feel from a lifestyle position what it feels like to have a Digital Insiders type high touch coaching business versus at Funnel Gorgeous where I’m more managerial, and I do have a little bit of coaching. But still, what am I going for? Am I trying to hit some magic number with Funnel Gorgeous? No. We are trying to grow. We’re actually trying not to grow too fast. It scares me to death to grow too fast. So that is not something I’m interested in.
So when you’re looking at your enough number, it is really tempting to just gun for some big number without the context. And it is incredibly dangerous, because when you get to that number you’re probably going to be pretty disillusioned as to what it means, because you attached a meaning to it that wasn’t really true or accurate. So when you’re sitting down and sort of building out your value ladder or if you’re a company and figuring out where you want to go, you want to start with that end number in mind of when do you want to retire? What age do you want to be when you retire? How much money do you want to have invested or in the bank in order to retire? And then back into it from there.
And then as you’re building that business, thinking about the different containers that business can go in, you know, do you want to have a huge impact? Do you want to have big volume? Do you want to manage a big team? Do you want to have a smaller business? Do you want to have more intimate and deeper connections?
So those are the things that I would encourage you to think about, as you’re trying to plan out your enough number.
Anyway, thanks guys for listening. Sorry to be so MIA, but life. We moved, we got a puppy, and there’s been a lot going on in the land of Funnel Gorgeous, but I’m glad to be back.