The capacity question

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Hey there!

I had an inordinate amount of fun creating Google Worksheets this past week.

I created business calculators to help myself and a few of my clients (who are building consulting businesses). I’ve created one for take home pay & pricing, and another one for revenue forecasting.

It’s been amazing for two main reasons:

1. I created a way for people to determine their business pricing that is based their personal budget and take home pay needs

2. I never would have been able to do this without ChatGPT

The pricing calculator, in particular, is something I’ve wanted for a long time. I’ve always been struck by how opaque anything dealing with income is in small business.

Anyone who talks about the money their business is making, or teaches others how to make money focuses on revenue.

Revenue = how much money the business brings in.

Which is often a very different number from how much money someone makes running a business, even a one-person shop.

And if you’re like, “Yeah, yeah. I know revenue and personal income aren’t the same thing.” I’m right there with you.

But I also know that messaging like the examples below are designed to make you think that money is net new cash coming your way.

It starts small, like:

• "Earn an additional $1,000/month with this simple strategy!"

• "Launch a $3,000/month side business in just 30 days!"

• "Unlock an extra $500/week with this proven method!"

And it gets bigger, like:

• "Reach $50,000/month by scaling your online business!"

• "How to grow your business to $100,000 in annual revenue using LinkedIn!"

• "Discover the secrets to $25,000/month with your own digital product!"

These examples are messaging I see aimed at solopreneurs. But the myopic focus on revenue exists for larger companies and business too.

The problem with revenue (when you’re building your own business) is that it only tells you how much the business is making, not the people in the business—not how much you will make.

You don’t get to bring home every dollar you make in business. And if you do, then you’ll be very surprised at tax time.

But it’s not just taxes. It’s also the:

• Software

• Hosting

• Transaction fees

• Marketing costs

• Contractors

• Training and coaching

And the thing about these costs is that they go up the more you grow.

As revenue goes up, so do operational costs.

Oh yeah, and it requires more of your time!

And who is out there trying to build their own business so that they can work just as many hours (or more) than they did (or would have) as an employee?!

I’ve written before about how constraint breeds creativity. I’m drawing on that mindset a lot lately as I am 3 months into the re-opening of my business with a new business model.

What I want to better understand is not “how can I increase my revenue?” but rather, “How can I increase my take home pay and stay within my capacity?”

This is the question my business math calculator set out to answer.