In today’s tutorial, I’m going to show you how to set and shatter an annual income goal. You’ll find step-by-step instructions on planning a stellar and profitable year. This exercise is an excerpt from the best-selling Your Best Year 2017. Grab your copy of this year’s edition right here: Your Best Year 2018: Productivity Workbook and Online Business Planner.
Just look at how online entrepreneurs are growing faster and profiting more every day because of Your Best Year 2018 …
Trust that I’m not sharing testimonials to sell this book to you, but rather show you why it’s a MUST-HAVE for your business. In fact, the testimonials I’ve received are only the tip of the iceberg. People aren’t leaving feedback because they’re too busy thinking about themselves and seeing their businesses in a whole new light. That’s as it should be.
Below is just ONE of the exercises I’ve created to help you reach the next level this year.
Set and Shatter a Giant Income Goal
We’re working from page 45 of Your Best Year 2017, if you already have a copy of the book and would like to follow along. This exercise is specifically designed to help you figure out how much money you want to spend on your business and what you’d like your salary to be.
Surprise expenses are never a good idea, and an equally anxiety-inducing situation is to have a looming expense that you know you should take care of, but you procrastinate on taking the plunge. This exercise is not meant to stress you out; it’s here to help you get all of those upcoming expenses out of your head and onto the page where you can begin to deal with them.
I’m also going to encourage you to make 2017 the year you stop jerry-rigging your business once and for all. Online entrepreneurs have a tendency to “make do” with their operation while waiting for it to make larger amounts of money, so that they can afford to stop making do with their operation!
I finally realized that if I want to earn upwards of 100K, I need a 100K plan combined with a 100K mindset. I need to make 100K decisions. It’ll require a 100K work ethic. And most of all, I need to believe my business is worth every single dollar right now!
Last year, I bought the training I needed, upgraded to the software I wanted, and I hired help. My business wasn’t earning six-figures at the time, but I stopped looking at investments as losses and started trusting their return.
That part’s important: I trusted my business to provide, and so it finally did. I know how stressful business expenses can be. I never mean to make the leap look easy, but … it was. In fact, leaping is a lot easier than standing on the edge thinking about the leap.
Come to this exercise knowing how much you currently pay yourself, what you’d like to invest in your business in the coming year, along with its existing operating expenses.
You’ll learn the required minimum your business needs to make in order to operate successfully. That’s your new quota; don’t allow your income to fall below this figure each month. Then, I’ll show you how to aim for an advantage income goal. It’s the trick to breaking the “nothing more, nothing less” mentality that keeps you making the same amount year after year.
It will challenge you to stretch yourself beyond the figures you believe you can make.
Typical income-earning advice has us breaking down the numbers instead of building them up. My approach is different: I like to know the figure I need to earn, add the extra I want to earn, and then build an annual strategy that ensures those numbers.
Aside from your salary (whatever you pay yourself), this first formula will bring you to the total your business must earn in order to operate and grow. We’re looking for exact numbers here, so if one of your “must-have upgrades” above is to hire a new web designer – go find the person you want and view their price list or request a quote for your specific needs.
Current annual operating expenses = Hosting fees, shipping fees, materials and supplies, email management, any necessary equipment, etc. Add them up and write down your total operating expenses.
Desired reserve (business savings) = This is a cash fund I like to keep around for peace of mind. Mine ranges anywhere from $500 – $10,000, depending on the financial commitments I have at the time.
Must-have upgrades and support = These are the necessary investments you need to make in order reach the next level this year. Some of my examples are a part-time assistant, online business training, a bookkeeper, and webinar software.
Total of these items = Your Required Expense Fund (what you must earn or invest in order to develop your business)
But remember, we haven’t added your salary into the equation yet …
Next, we’re going to add your pay to the base annual requirement. This is still part of the figure your business needs to earn in order to operate and grow.
Current annual salary – This is how much you paid yourself last year
Must-have life upgrades – Above and beyond your salary, these are overdue upgrades you refuse to put off any longer. This could be as major as a new vehicle or downpayment on a house, or as simple as new clothing or a finished space in your home.
Family needs – What are you going to refuse to postpone yet another year? What family needs have you struggled to find funds for? It wasn’t until I finally trusted my business to provide on such personal matters that I was able to shatter my own income ceiling.
Personal needs – What do you need in order to boost your stamina and become the success that you crave? Some of my examples are exercise classes, regular salon appointments, and a bi-weekly housecleaning crew.
Total of these items + Your Required Expense Fund = Your Required Minimum Earnings
Next, it’s time to stretch yourself a bit further. Set your required minimum earnings aside for now, and let’s talk about what you would do, buy, and build if money weren’t an object.
Wish list business upgrades and support – Again, we’re looking for exact figures here. If one of your wish list upgrades is to hire a virtual assistant, actually consider how many hours you’ll need and add up the total price. Here are my assistant’s rate packages as an example.
Wish list needs – For me, these usually center around equipment, conferences, or online training.
Wish list life upgrades and support – What are you craving most? More downtime? More family adventures? More relaxation? More support? You can outsource your ironing for about $10/week. You can buy annual subscriptions for monthly massages for about $60/month. You can get a bi-weekly housecleaning for $125 (I haven’t scrubbed toilets in over a year – worth every penny!). Depending on your family size, a weekend away can cost as little as $250.
Feeling rich sometimes comes really cheap! What’s on your “rich” list? Add it up here.
Your Required Minimum Earnings + Your Wish List = Your Advantage Total
Know Your Monthly Minimum
Now the last thing you need to do is calculate your monthly minimum (the number your business needs to earn) and your monthly stretch goal (your advantage total from the last exercise). Here’s the formula …
For example, let’s say minimum annual expenses are $14,000 and salary required is $28,000 (oh, how I’ve known that number well). Let’s say your stretch goal is $22,000 for expenses and upgrades, and your dream salary for the year is $40,000.
Here are the two formulas come to life:
Expense $14,000 + salary $28,000 = $42,000/12 months = $3,500/month
Advantage expense $22,000 + salary $40,000 = $62,000/12 months = $5,167/month
With this example, you’ll know you need to pull in an average $3,500 per month to meet your minimum, but you can stretch yourself to earn $5,167 and implement rewards for achieving it (such as, hiring that support and sending out the laundry!).
If this is stressing you out, you’re probably running up against one of two obstacles:
- You have no idea how much your business is currently pulling in >>> See this article, lesson #2, or …
- You’re not sure how to make anywhere near your income goals >>> See this article to define your money makers.
Because yes, you can.
Your Best Year 2018
My friends, there’s never been a book about online business like this before. Your Best Year is the *only* workbook on the market that encourages a fluid long-term plan designed specifically for online entrepreneurs. I did four specific things to exceed my own wildest dreams last year. I made …
- My goals resolute,
- My strategies specific,
- My system efficient, and
- My action plan productive
You’ll get a refresher on the fundamentals: you’ll review what’s not working, identify what needs to change, challenge your limitations, and figure out what to focus on. You’re going to ask the question that shaped this book: how much better can it get? From there, I took my six-figure earning, online business strategies and packaged them into a revolutionary planning system anybody can use.
Get ready to have your best year in business!