How much is enough? How to work out your enough number as a business owner
The short answer
Your enough number is the amount your business needs to bring in to pay for the life you actually want, plus a sensible buffer. It isn't a round figure that sounds impressive, and it isn't someone else's goal. You can work it out in an afternoon: write down the life you want, put a price on it, add savings and a buffer, then work out what the business needs to make before tax and costs to cover it.
Once you know it, every other decision in your business gets easier, because you're no longer chasing a number with no end to it.
Why I stopped chasing a bigger number
For years I thought working harder now would buy me freedom later. I ran a financial modelling business for property investors, and I was working around 50 hours a week. From the outside it looked like a success. From the inside, I resented it.
My answer to every problem was the same: work harder, earn more, keep going. I never asked what "more" was for.
The day a client threatened to sue, I took the dog out and just kept walking, all the way to the pub in the next village. Sitting there, I asked myself the question I'd been avoiding for years: what's the point of working this hard if I'm not enjoying any of it?
So I did what I know best and opened a spreadsheet. Except this time I wasn't modelling someone else's property deal. I was modelling our life.
What is an enough number?
An enough number is the yearly income that pays for the life you want, including the things you've been putting off "until the business is bigger". It covers what you spend now, the things you'd like to be doing, savings for later, and a buffer so one quiet month doesn't send you into a panic.
It's different from a revenue target. A revenue target usually comes from what sounds good, what someone else is earning, or the classic "let's double it". I hear it all the time from business owners: "everyone's been like, you must hit these 10K months and 20K months." Very few of them have checked whether they need to.
How to work out your enough number, step by step
You don't need to be a numbers person for this. You need a quiet afternoon, your bank statements and an honest conversation with whoever you share your life with.
Write down the life you actually want. Be specific. "More freedom" doesn't help you. "Walk the dogs every morning, lunch in the garden, two weeks in Italy every year without my laptop" does. When I did this, our list was surprisingly simple: walk the dogs, travel, drive around Italy drinking €1 wine, see our family and have time together.
Put a price on what you spend now. Go through your last three months of bank statements and work out your real monthly spend: mortgage or rent, bills, food, cars, subscriptions, the lot. Most people guess this number wrong.
Put a price on the life you wrote down. Cost up the things on your list that you aren't doing yet. Divide anything yearly, like holidays, by 12 so everything is monthly.
Add savings and a buffer. Decide what you want to put away for a pension and a rainy day. Your accountant or a financial adviser can help you decide what's sensible for you.
Work out what the business needs to make. Add your business running costs and the tax you'll pay on top of the personal number. Your accountant can turn your take-home figure into a "before tax" figure in about five minutes.
Compare it with what you're doing now. This is the interesting bit.
Here's a simple made-up example. Say your current spending is £3,500 a month and the extra things on your list add up to £500 a month. That's £4,000 a month, or £48,000 a year. Add £12,000 a year for a pension and savings and you need £60,000 a year to take home. Once you add tax and business costs, the business might need to bring in somewhere around £90,000 to £100,000. That's your enough number.
What to do once you know your number
When most people do this for the first time, one of two things happens.
Some find they're already there, or close. That's when things get exciting, because it means you can start buying back your time instead of chasing more money. You can work fewer hours, stop taking on the clients who drain you, or drop the service that's more hassle than it's worth.
Others find there's a gap. That's useful too. You now know exactly how big the gap is, so you can close it on purpose, usually by charging properly and focusing on the work that actually makes money, rather than just working longer hours.
One business owner I work with put his prices up to what we'd worked out they should be. His words a few weeks later: "We have put up prices to what you suggested and are still winning jobs!" Same amount of work, more money.
Why can't that be enough?
There's an old story about a businessman on holiday who meets a fisherman in a small Mexican village. The fisherman works a few hours a day, then spends the rest of it with his family, playing guitar with his friends in the evening. The businessman tells him he should work harder, buy more boats, build a company and move to the city. "And then what?" asks the fisherman. "Then, after 20 years, you can retire to a small village, fish a little and spend time with your family."
I think about that story a lot. Plenty of business owners are working 50 or 60 hours a week to one day earn the life they could, with a few changes, start living now.
You're allowed to know what enough is. You're allowed to make that your goal. And you're allowed to stop once you get there.
Questions people ask about their enough number
Is an enough number the same as a revenue target?
No. A revenue target is usually picked because it sounds good. An enough number is worked out from what your life actually costs, so you know why you're aiming for it and when you've hit it.
Should my enough number include savings and a pension?
Yes. If it only covers today's bills, you'll feel pressure to keep growing forever. Build your savings and pension into the number so that hitting it genuinely means you're covered.
What if my business already makes more than enough?
Then you have a choice most people don't realise they have. You can keep the income and cut your hours, or keep your hours and put the extra towards something you care about. Either way, you're making the decision on purpose instead of by default.
How often should I work it out again?
Once a year is plenty, or whenever something big changes, like moving house, a new baby or a change in your family's plans.
