When we're doing something we love and feel so passionate about for a living, it's easy to feel like any money you happen to make it a bonus.
But to build a financially sustainable business, you should be setting income goals.
We're starting to cotton on to the fact that our jobs don't have to be dull or miserable - our hobbies can make us money (my dad once told me that "work isn't supposed to be fun" and it's safe to say I've proved him wrong)! It's easy to feel so grateful for making any money at all from something we enjoy that you don't set any specific goals for our income. But here's why you should.
Make sure your business is sustainable
Setting income goals is part and parcel of tracking your income and being aware of how well your business is doing financially.
It's so tempting to bury your head in the sand when it comes to finding out where your business is at financially, especially if you have a niggling feeling that it's not too peachy, but if things are bad then it's best to know as soon as possible so you can come up with a plan of action.
You're forced to evaluate your finances
Here's what you need to think about when you set your income goals:
- How much money you need to make per month/year to cover your basic living costs
- How much money you'd ideally like to make
- How much you'll need to cover tax and National Insurance
- How many of each product or service you offer you'll need to sell to reach your income goal
- Whether that's realistic or you'll be working 24/7
And this really forces you to find out exactly what your financial situation is, whether your prices need to change in order to make enough money and to get a grip on dealing with tax.
Admittedly it isn't the most exciting thing you'll ever do in your business, but it's so beneficial and every client I've worked on this with has said how much less stressed they felt afterwards.
Be aware of any obstacles
By setting goals, you'll be forced to think about the things which could prevent you from getting there. The thing is, these setbacks will probably come up whether you set goals or not, so you may as well decide how you're going to tackle them in advance rather than get a nasty shock.
Setting your income goals will also get you thinking about how your business will stay relevant in the future. Do your research and have a look at predictions and trends in your area of work - how can you prepare for them?
Help your business to grow
The specifics differ, but we basically all want the same thing - to run a business that fulfils us and allows us to live an enjoyable life.
You may not want a team of employees and a fancy office, but your business needs to keep growing in order to be financially sustainable. The cost of living gets higher every year, so your business income should be increasing each year to keep up with inflation at least, even if you're happy with how much you earn.
By setting income goals, you can ensure that your business stays up and running, you can pay your bills and live comfortably and be prepared for any obstacles that come your way.
Do you set income goals? If not, will you start now that you know the benefits? Let me know in the comments!
If you need help setting income goals for your business and taking control of your money, I can help. I'm a financial coach helping female business owners to manage their finances successfully and cultivate a positive relationship with money. Click the button below to find out how we can work together to build the business and life you want.
I also create courses and resources to help female entrepreneurs to manage their business finances.