Exactly how big your audience needs to be to create a full time income
Ahh, the elusive “full time income” in your business. We hear numbers splashed all around social media: 6 figures, 7 figures, hell, even 8 figures (uh, that’s $10 million). You hear about the result (i.e. the money), but you don’t hear about the conversion rates, funnels, content marketing, and ads that make the result. I’m here today to teach you EXACTLY how big your audience needs to be to create a full time income.
I’m not talking general (and completely obvious) "you need to have social media followers” bullshit, I mean down to the exact number your email list needs to be and how much traffic you need to be getting to your website to build that email list.
Let’s get down to it:
#1 Your “full time income”
Let’s start with the first variable: your full time income.
What does the phrase “full time income” mean to you?
This number is going to vary greatly between entrepreneurs, so that’s why we’re starting with this first.
Do you live in a major city where the living costs are 3 times that of someone in a smaller, rural area? Are you looking to replace a 6-figure corporate income, or are you looking to earn enough to pay for your mortgage each month? Does your dream life include a major renovation on your house that you have to pay for, or are you willing to live on a smaller budget if it means leaving your soul sucking day job?
A full time income to one person could be $30,000 a year, and to someone else could be $130,000.
You not only have to generate the amount you want to make as your take home pay, but also enough to cover your business expenses and any personal income taxes you’ll need to pay (if you want to stay legal and all).
Step #1 is to click here and calculate how much your business needs to generate in revenue (i.e. total sales) to make you the full time income that you need.
Once you have that number, come back here to move onto step 2.
#2 How many clients do you need?
Now that you know how much annual revenue (i.e. yearly sales) you need to generate, how many paying clients or customers does that work out to?
To figure this out, you need to know how much an average client makes you.
If you only have one paid offering, such as a 1-1 program, and it’s only one price point, this is pretty easy to calculate:
Number of clients
= Annual revenue required
Amount each client generates
For example, if you need to generate $50,000 in annual revenue, and you have a 3 month, 1-1 program that you charge $1,000 for, here’s the math:
Number of clients
= $50,000
$1,000
= 50 clients per year
If you have a product based business, in which you sell many different physical products at different price points, you’ll use the average customer purchase as your amount each client generates. If you haven’t had sales yet, use your best guess as to what that average will be.
Reminder: if you have a product based business, it costs money to make that product before you can sell it. So your business expenses, which will include the raw materials and labour costs to make your products, will most likely be much higher than a service based business.
For a commission based business, like network marketing, pinpointing this number is a little tougher to do but still doable.
You have to calculate how much a new customer makes you on average, considering that a customer could be:
someone who only purchases once and never again
someone who purchases every now and then
someone who purchases every month
someone who decides to do the business with you and is a casual builder
someone who decides to jump in gung-ho, builds a serious business with you, and contributes a high percentage of your team volume
A customer could make you $20 over their lifetime or thousands upon thousands of dollars. Good luck! Kidding, I wouldn’t leave you hanging like that!!! :S
If you already have a network marketing business with any number of customers, use the total income that you generated in the last 12 months and divide it by the number of active customers you currently have in your organization. That should give you a good place to start.
You will use the same formula as above, but the average sales that a customer generates is probably much less, so you’ll likely need many more customers. For example:
Number of customers
= $50,000 revenue
$100 per customer
= 500 customers per year
Side note to this step (aka advanced business coaching!): if you just calculated this number, ask yourself if it’s realistic, aka. do you even have time to work with that many active customers in one year?
Using the above example with 1-1 clients, where you would have to work with 50 paying clients in one year to make $50,000, is that doable with the amount of time it takes per client and the number of hours you can work?
I mentioned in that example it’s a 3 month, 1-1 program. How many hours does it take per client for that entire 3 month program, including prep time for each appointment, the appointment themselves, and the admin work associated (like emails, invoicing, etc). If it takes you 10 hours total for every 3 month client, and you have to work with 50 of them, that’s 500 hours.
Do you have 500 working hours per year in your business, excluding other required activities like marketing and admin work? If you’re working full time in your business (i.e. 30+ hours per week = 1,440+ working hours per year), chances are that you’re fine.
However, if you only work part time in your business right now, and work 10 hours per week in your business (and let’s say you work 48 weeks out of 52 in a year), that’s only 480 working hours. That’s less time available than it's going to take to work the 500 hours with 50 paying clients.
You either have to decrease the amount of time you work with each client, or you have to charge more so you can work with less clients. We’ll call this little caveat Business 201, or the basics of a sustainable, profitable business.
#3 How many email subscribers do you need?
Now we get to the fun part that I bet you didn’t know how to figure out: exactly how many email subscribers you’re going to need to find the paying customers you just calculated!
When I first learned the average conversion amount from a former business coach, my mind was blown. You can actually reverse engineer how many email subscribers you need to hit your income goal? Mind blown 🤯.
Ready for it?
On average, 1-3% of email subscribers will convert to paying customers.
Yay, math! Here’s your formula to calculate exactly how many email subscribers you need in a year to hit your full time income goal:
Annual email subscribers
= Annual # of clients needed
Average conversion rate (as a decimal)
So for the example above where you need 50 paying customers in a year, and using the more conservative 1% conversion rate, you get:
Annual email subscribers
= 50 paying clients
0.01
= 5,000 email subscribers
Now, what about if you manage to increase your conversion rate up to 3%?
Annual email subscribers
= 50 paying clients
0.03
= 1,667 email subscribers
This means that if you need to find 50 paying clients in one year to make $50,000 in annual revenue, you’ll need to have between 1,667 and 5,000 email subscribers.
Remember that this is just an average! You might have a small following that’s super niche and love you so much that they’ll buy anything from you, and you can improve your conversion rate to 5%, bringing your email list goal down to 1,000.
The point of goals isn’t that they’re the be all, end all of your business, they just give you somewhere to start.
So what’s your email subscriber goal number? Is that more or less than you thought? Are you like “holy shit, that’s so many, there’s no hope in me ever having a successful business!”, or are you like “I’m already there, now I just need to start converting! *self high five”.
You might be somewhere in between, and that’s totally OK. I didn’t learn this math until 10 years into business, and I was flabbergasted (and also excited because I could apply math to a problem that previously felt abstract to me).
Even if the destination felt like it was a million miles away, at least I knew what direction I needed to go in.
And that brings me to the last step …
#4 How much traffic do you need?
It’s one thing to get email subscribers, but you have to get the attention of those people somehow so that they can become email subscribers.
You can either do this manually by sending DM’s to your followers on social media (which sounds like my own personal hell) OR you can send them to your website where they have a certain percent chance of becoming an email subscriber without you having to be personally involved.
I know which one I’m choosing: door #2.
I’m all about finding new customers on autopilot, and that means not sending DM’s to random people on Instagram.
That means you have to: a) get people to your website; and then b) get them to become email subscribers by giving them a reason to join your list.
The ultimate math formula for how much traffic you’ll need to your website is going to depend on your conversion rates for your lead magnets or opt-ins. The good news is that these can have a much bigger conversion rate than email list to sales.
For example, I have some opt-ins on my website that only convert at 0.72%, but some that convert at 36.8%! Obviously that’s a huge range.
If you’ve had your website and opt-ins active for a year or more, you can use your data from Google Analytics and your email software to come up with an average opt-in conversion rate. For me last year, that was 4.2% (not too shabby!). This means that for every 100 people I got to my website, just over 4 of them became an email subscriber.
Here’s your formula to use for annual website traffic goals:
Annual website traffic
= Annual # of subscribers needed
Average opt-in conversion rate (as a decimal)
Let’s continue with our example from the beginning, where we need 50 paying clients in one year, meaning somewhere between 1,667 and 5,000 email subscribers.
Let’s say that we split it down the middle and shoot for 2,500 email subscribers, our annual website traffic goal:
Annual website traffic
= 2,500
0.042
= 59,524 website visitors
That works out to 4,960 website visitors each month (divide the annual website traffic by 12).
Again, does this sound impossible? Totally doable? Somewhere in between? Your reaction, whatever it is, is totally normal. This is just information, and it can be jarring at first. Your job is to sit with it for a few days, then formulate a plan to get those website visitors.
Are you going to focus on expanding your reach on Pinterest? Increase your Instagram following? Improve the Search Engine Optimization (SEO) on your website? Start doing paid ads? Or some or all of the above?
That’s the ultimate question you need to answer: how am I going to find 5,000 website visitors a month?
Notice how we broke down a huge problem into a smaller, more manageable one that you can solve?
“How do I make a full time income in my business?” becomes “how much website traffic do I need in a month?”. THIS is how you’re going to build a full time income, not sitting there posting the same things on Instagram over and over again, hoping and wishing for something to change.
This is the math, the logistics, the strategy that the gurus you follow on social media rarely share. They’re doing all of this behind the scenes, but they’re telling you that if you just take their $197 Instagram Reels course, all your business problems will be solved. Chances are they won’t.
To get to the amount of website visitors that you need to turn into the number of email subscribers you need that will end up converting to the amount of paying customers you need that will generate the annual revenue you need to make a “full time income”, you need a sustainable marketing strategy paired with foundational systems so you can make that full time income without burning out.
No matter if you’re close to or far away from your emails list or website traffic goals, focus on the fact that you’re moving closer to it everyday. You just learned something that could transform how you look at your business, so apply it and take even one little step each day towards increasing your website traffic!
Focus on one marketing strategy at a time, keep track of your data (click here for a free social media tracker), keep doing what’s working, and stop doing what’s not. The name of the game with your own business is experimentation, so don’t be afraid to switch it up and try something new!
