I’ve helped countless women start online service-based businesses and leave their 9-5s and many of my clients now come to me because they want to do the same thing.
One of the very first things I do with all of my clients is set true financial goals. This is important both for my newbies trying to leave the 9-5 grind and the women I serve who desire to scale their businesses but don’t know how to make the income jump.
Because if you don’t know what you really, truly need to leave the 9-5 or scale the business then how are you going to actually get there? Truth time: you’re not!
Now you’re probably thinking...how do I know what I need to make in order to set a true financial goal?!
Girl I’ve got your back! These are the exact steps I walk my clients through and I’m sharing them with you today.
STEP 1: Figure out your true income goal + how much work it’s going to take you to get it
Let’s use Jen as an example here. Jen desires to bring in $5K months in her Virtual Assisting business. Her current hourly rate is $35 so she’ll need to bill approximately 143 hours a month to get to this goal. That means Jen will need to BILL approximately 35.75 hours a week. Note that this does not account for any hours Jen will need to spend on discovery calls, doing client work that isn’t billable (like creating and sending invoices) or working on her own business (like marketing herself, working on her website, implementing new systems, etc.).
Now that Jen knows her true income goal and exactly what it’s going to take to meet that goal she gets to make a decision. Either billing 35.75 hours a week/143 hours a month to get to her $5K goal works for her, or it doesn't. And if it doesn’t then she has options. She can either raise her rate so she can work less, bring on a team so she can work less and make more or decide to work less and make less.
The best part of this is that Jen is now in control of her income because she knows exactly what it takes to make it based on her current business model. SCORE!
STEP 2: Account for taxes and business expenses to figure out what you take home each month
Figuring out how much money want to be bringing into your business each month is GREAT, but that dollar amount means nothing if you don’t know what it’s going to cost you to get to that amount and how much you’re actually going to be taking home each month.
Let’s say Jen is making $5K a month as a Virtual Assistant. She pays $250 a month in subcontractor costs (the person she hired to do all of her clients’ manual Facebook postings), $16 per month for her Squarespace website, $25 per month for Dubsado, $15 per month for her business checking account, $15 per month for a Zoom account and $10 per month for iCloud storage. That’s $331 per month in business expenses. Jen puts 30% of her income aside for taxes each month which comes to $1500. So, after business expenses and taxes, Jen is looking at a take home monthly pay of $3169.
Now you see why making business revenue goals is GREAT, but figuring out what you’re actually going to be able to take home is way more helpful.
STEP 3: Save your money, girl!
Once you’ve figured out how much money you desire to make each month and what your business expenses and taxes will look like there’s one IMPORTANT piece that you can’t ignore.
YOUR SAVINGS ACCOUNT.
At most US banks, you can open a business savings account for free if you also open a business checking account. If you already have a business checking account and don’t have a savings account...go call your bank! If you still need to open business accounts make sure to ask about a savings account.
Now listen up. If you believe in the long-term success of your business you owe it to yourself to be saving.
Girl for everything! A new computer every few years, website design, Game of Thrones coffee mugs (that's not just me, right?!), taxes you didn’t realize you needed to pay, office decor, a fun and travel-worthy business event...ANYTHING.
Decide how much you want to be saving every month and immediately put that amount into your savings account BEFORE you pay yourself.
Treat your business as though you’ll continue to grow for years to come by saving for that growth now.
STEP 4: Give yourself permission to make changes
Once you start figuring out the difference between your revenue and income you’ll see how different those numbers can be.
What’s so important to remember is that this is YOUR business and if you don’t like the way something looks you have the power to change it. If you figure out your income is actually less than you wanted you can either eliminate some of your business expenses or decide to take on another client. Really and truly...one of the best parts about running your own business is that you get to call the shots! So call them!
Sara Wiles is an Online Business Mentor for done-for-you service providers. She helps Virtual Assistants, Online Business Managers and Social Media Managers go from frazzled to focused, stark to sold out and bewildered to balanced.
Through her unique, personal mentoring style she supports her clients through confidence building, clarity gaining, mindset managing and massive action taking.
She spent 8 years traveling the US producing high-end corporate (and a few celebrity) events before becoming an entrepreneur. After just 4 weeks of starting her business, she filled her roster, replaced her 9-5 income and brought on a team. Sara is also a wife, mama, dog mama, exercise enthusiast, champagne connoisseur and four-letter word addict.
Click here to book a free call to talk more about your business goals and to see if mentoring would be a fit to help you achieve those dreams.