How to Make $100K a Year
“If you want success, figure out the price, then pay it.” – Scott Adams
It’s easy to overcomplicate things. Especially during turbulent times. But take solace. The longer I’ve been in business the more I’ve realized things don’t change that much. The same things that you needed to do back in 2011 are still what you have to do now to make $100k a year. The same things will be true a week or month from now. In fact, everyone is still battling the exact same problems:
- Bad websites
- Bad positioning
- Bad value propositions
And here’s the truth. Even these “problems” don’t matter. 80% of people who have them, still end up making $100k a year despite them.
That’s because the biggest key to making $100k a year is simply having your own business. Do that and 80% of the work is done.
The truth is your revenue is simply a numbers game. And I’ve discovered the single magic number that you can use to all but guarantee you make $100k a year. Simply hitting this number consistently means making six-figures for 9/10 businesses online.
And this number holds true across thousands of online businesses, including freelancers, and agencies. It simply works.
The magic number for making $100k a year online
Here’s what I’ve found universally true by observing hundreds businesses:
Businesses that sell a service with an average sale price of $10k per project, need about 1 client per month to hit six-figures. To do that, the average service business needs about 30 leads.
Put simply: that means you need 30 leads coming to you from your website each month to make $100k a year (if you sell a service.)
Now, for product businesses the calculation is different. If you have a product business and the average order value is $500, then you need to 30x those numbers. You need 850 new leads from your website each month to generate $100k per year.
That’s it. That’s as close to a universal law as I’ve found in online business.
Now, obviously these are rough numbers so adjust them to your business as needed. But for the most part, they hold true.
The most important thing you can do with this information is to just accept it. Adjust your mindset accordingly moving forward.
What you can do to get started today (how anyone can make $100k a year)
Even though these are just back of the napkin numbers, they apply to almost everyone I’ve come across. Including me.
I’ve made $100k each year since 2013, but it wasn’t always that way. My first couple of years, I made <$40k a year.
- I had trouble finding clients consistently
- I undercharged for my services
- I worked on my portfolio and website way too much
- I didn’t know where to start, so I procrastinated
Sound familiar? That’s is the majority of people online. The truth is these “problems” didn’t matter.
One thing I focused on was getting more leads consistently. So despite these difficulties I still got to six-figures in just a year.
No other-worldly skills required.
How to calculate your numbers
Now that you know you need either 30 or 850 inbound leads coming in from your website ask yourself:
- Am I getting this many currently?
If your answer is yes, and you aren’t making $100k a year already, something else is wrong. You need to figure out what part of your sales process is broken. It might be your pricing, it might be the messaging on your marketing, or it might be your sales technique. Fix that first.
If your answer is no, it means you need do a better job marketing. It might mean you actually need to cut back on low value marketing activities (like Instagram) to focus on something more effective (like guest posting). The point is your marketing needs to create more leads. Period. Fix that first.
Remember: these are bare minimum numbers. Without this baseline number of leads it doesn’t matter how great your website or offer is, you’re bound to run into the feast or famine cycle at some point. You might have a good month here or there but eventually you’ll be back to being stressed out about where your next buck will be come from.
See, I told you this was going to be simple!
The good news is you can control these numbers, here’s how.
It takes an ambitious person to start a business. Making $100k a year has never been easier, but you have to assume control over your destiny. No one is going to do it for you.
You might have to do some work that means logging off of Twitter for a while. You might have to skip Netflix a few nights a week.
For some that, alone, is asking too much.
For others, they get stuck on this next part.
It’s gonna get uncomfortable. Heck it might even feel overwhelming at first.
At times you’ll feel like you’re on a wild goose-chase. But don’t let it discourage you. You know what you need to do. Here’s how you can create a system:
- Realize how many leads your business needs: 30 or 850?
- Answer: how can you make getting this number each month easier?
- Answer: what can you stop doing that isn’t helping you reach this number?
But what if you’re not established yet! How the heck do you get more leads?
I’ve used the term “lead” a few times in this article so far. Now let’s get more specific. There are actually two types of leads: inbound and outbound.
An inbound leads means a prospect is coming to you directly, from your website or your network. This is preferable.
An outbound lead is a prospect you’re reaching out to, who doesn’t know you. These are often less effective because of the nature of reaching out to strangers.
The problem with inbound leads though, is they’re harder to get at first. When you’re starting out you simply won’t have very many inbound leads because no one knows who you are. Accept it!
It’s totally fine to reach your lead quota (30 or 850) by using outbound leads in the first few years. In fact, outbound leads have one very awesome quality. They are 100% in your control.
You might even need to use 100% outbound leads for the first few months while you get setup.
That’s is A-okay. In fact, often this is the very thing newbie business owners should be doing, but don’t.
The price to pay for making $100k a year when you’re starting out
So why don’t most business owners like using outbound leads? Because it’s not fun. Creating a list of prospects and emailing them is work. But it’s the very real price to pay for a $100k a year business.
Most aren’t willing to pay it. Are you?
If you are, here are some ideas for using outbound leads in your business:
- Replying to freelance job posts
- Responding to RFPs posted on Linkedin
- Writing a guest post on someone else’s blog
- Joining a Slack community and responding to referral requests
- Reaching out to businesses in the INC 5000
- Emailing a list of websites using the tech stack you work on from BuiltWith.com
- Responding to questions on Reddit or Quora
- Emailing your network to see if they need help
This list is just scratching the surface but hopefully it gives you some ideas for things you can do right now. Here are even more. Remember, you’re the only one who can stop you.
Why simply owning a business means the numbers are on your side
As you progress you won’t need as many “outbound” leads.
In fact, you don’t need that many clients or customers in general to make $100k a year.
Most people will do nothing when they need more revenue. They simply sit and wait.
You, on the other hand, are going to use math in your favor. You are going to get direct.
You have an advantage. You have a clear path. You know your numbers. You know how to get there.
There are thousands of job boards on the web, listing thousands of jobs, and millions of people who need a problem solved. Even if you find just one potential client each day, that’s 30 per month.
The chips are in your favor. You need fewer clients (and prospects) than you think.
But don’t skip out on the early step. It’s important to create a system now that will keep helping you reach these numbers for years. Build your $100k a year system on lead at a time.