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In the “real world,” money is such a taboo subject. But in the online world, it seems like entrepreneurs are sharing their bank account details left and right.
What are YOUR income goals? How much money do you REALLY need to make?
And don’t answer, “Six-figures,” just because that’s what all the “cool” kids on the internet claim to be making. You need to think about what YOU legitimately need to make, not some random number someone else told you should be your goal.
It’s important to set your own, personal income goals, based on real factors, instead of an arbitrary measure of “success.” When you have a goal that feels real, based on real numbers, you are far more likely to actually achieve it.
I’m going to break down the simple steps to set income goals for your creative business. Let’s get started!
Break down your personal expenses
Do you know how much you’re spending to live? Life is crazy expensive!
Personal expenses are the things you pay for every month in order to live your life. This includes bills and expenses you must pay to survive, as well as things that are nice to have. Don’t forget you also want to put aside some money for savings each month!
Your expenses now might be pretty low, but what if you want to make some changes that will raise your personal expenses? Maybe you’re planning on having kids, moving to a bigger house, or traveling the world. When figuring out your personal expenses, don’t forget to include expenses that you may not have yet–but plan to have. This will give you a more accurate picture of what you really need to make.
Break down your business expenses
Your business is probably online, so you likely don’t have as much overhead as you would have 20 years ago. Go us for being born at the right time to take advantage of technology!
But even the most boot-strapping online company has some expenses. Business expenses include things like web hosting, legal fees, taxes, and all those fonts you keep buying for no reason other than they’re gorgeous.
Something I’ve noticed over the past few years is that as your business grows, your expenses go up. Whether it’s getting a better web host, hiring a VA, or even expanding to a full team–all of that comes with additional expenses.
While you can’t know ALL your future expenses, doing your best to calculate your expenses for the next year or two will help you see how much you’re going to be spending. Especially if you’re on the cusp of hiring someone or investing in a fancy training program, locking down a budget for that will ensure you have a clear picture of what your income goals need to be.
Add up your combined annual income goal
Add up your monthly personal and business expenses, then multiply by 12 to determine your yearly income goals.
How much money do you really need to make? Is it the six figures you thought you needed? More? Less? Whatever the number is, and no matter how scary it is, it’s a real number. Now we can break it down and figure out how you’re going to make it.
Break down how you’ll hit your income goals
Here’s the magic: now that you know what you need to make, you need to break down HOW you’re going to make it.
At fun as writing a check to yourself for $100,000 and posting it above your desk might be, it’s really hard to get there unless you honestly break down what you’re selling and figure out how much you need to sell.
For example, if you’re currently selling websites for $1,500, but need to make $60,000 in a year, you’re going to have to sell (and create!) about 40 websites a year. That’s almost one per week, and while it’s possible with really refined systems, it would be exhausting.
I don’t even think wonder woman could knock that out.
But don’t let that discourage you. Now that you know, you can start taking steps to figure out a model that works better.
You could create a signature service, and raise your rates to $5,000. That seems like a big jump, but it IS possible with proper positioning and really great systems.
That cuts the number of websites you need to make each year down to 12. Which is totally doable!
While pricing is a topic for another day, most creative entrepreneurs I see are undercharging because they’ve never done the math to figure out what their income goals actually need to be.
You HAVE to have income goals, and you HAVE to break down how many services you need to sell in order to reach those goals. If you don’t, you’ll end up hustling your butt off, and making pennies. Believe me, I’ve done it!
Sit down and add up all of your monthly personal expenses. Then add up your monthly business expenses. Add those together. How much do you need to make?
Write down your services, and what you’re charging for each. How many do you need to sell to hit your income goals?
Do you need to raise your rates?
This only works if you do. Make the time today to figure out how much money you really need to make.