The Importance of "Adequate"
The Importance of “Adequate”
About a year ago I described my revenue-based daily benchmarks: Doesn’t Suck and Good Day.
Since then, at the request of my wife, I’ve changed the benchmarks to:
- Adequate
- Good Day
(The concepts are the same, but Susan proved to have a threshold on the number of times she could stand to hear the word “sucks” in a given day. Married almost 15 years and still learning, that’s me.)
Toward the end of 2007 (prior to the wording change), as I considered my goals for 2008, I realized that daily revenue that I had thought was “adequate” (or, at the time, “didn’t suck”) for 2007 was, in fact, not “adequate” (in a word, it “sucked”).
To put it another way: If we had had a year of “doesn’t suck” days, I can assure you that 2007 would have, beyond any shadow of a doubt, “really sucked”.
I wanted to blame the benchmarks for being inadequate. But, well, I set the benchmarks. And I even thought I had set them well. I was wrong.
Then I tried to comfort myself by pointing out that I had come up with the “Doesn’t Suck” number for 2007 before we bought a new (to us) house (with a larger monthly mortgage payment), and before growth in affiliate sales of The Journal started taking a bigger chunk out of gross revenues (not a bad thing, BTW; growth is good). But those were just excuses to cover the simple fact that I had, in fact, guessed.
Yup. Guessed. At the beginning of 2007, I hadn’t researched what really was “adequate” daily revenue. I had looked at the numbers for 2006, picked a round-ish number that seemed workable (and was about 1/3 lower than my chosen “Good Day”) and called that “adequate”.
Fortunately, the average daily revenue for 2007 turned out to beat my chosen “Good Day” number by a considerable margin (which probably means I undertargeted my “Good Day” number, but we won’t go into that). So I wasn’t forced to live off the “adequate”. Which was good.
So redefining “adequate” became part of my research and planning for 2008.
I reviewed our finances, and came up with the necessary monthly income to maintain our current situation (mortgage, utilities, savings, groceries, etc.). Then I reviewed The Journal’s various numbers (gross revenues, payment processing overhead, royalty payouts, affiliate payouts, expenses, etc.) and came up with a more up-to-date estimate of how much (as a percentage) of the gross revenue becomes net revenue.
The somewhat shocking thing was that my newly calculated (go, go algebra!) “adequate” number was very close to last year’s “good day” number. Obviously, I hadn’t put enough thought into that number either. Oops.
So I set my new “adequate” number for 2008, confident that it really was adequate. And then set my new “good day” number at a level that will require some pushing on my part (but isn’t out of reach).
All of that to say, here’s why the “adequate” number is important: It was the sub-adequate (“sucky”) days that drove me the most. Those were the days I found myself most motivated to improve The Journal, to improve my Ad Words performance, to improve the Web page, and more.
Don’t get me wrong: Good days are great! Very inspiring. But sometimes I need to be poked and prodded more than I need to be inspired. A series of good days is likely to make me coast a bit. A series of inadequate days, though, gets me up off my ass and moving again. Because I don’t want to give up my new digs. Or starve.
There were days last year when I was happy to hit the “adequate” number. “Whew!” I’d think. “At least I made it up to adequate.” Sheesh. Only a few steps short of fiddling while Rome burns.
It seems that every year I find some new wrinkle in my understanding of my finances and how my business works that makes me think I must’ve been stupid to have never noticed it before. I keep thinking I have this whole self-employed, own-my-own-business, selling-software-over-the-Web thing wired–only to discover that I’ve missed something freaking obvious and instead of feeling proud I should feel lucky it hasn’t come crashing down yet.
I put up with these deflating realizations, though, because each one precedes a period of growth. Growth that wouldn’t have been possible if I hadn’t spotted that new wrinkle, took my lumps, and learned my lesson.
-David
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