Good day yesterday. I finished the second article and sidebar and was able to invoice something. Finally! I have to get in touch with the other clients today to see where we stand on revisions and invoicing. Time Lori gets paid, I think.
I heard you yesterday – you were saying “I have to get the plan together.” It’s a start to acknowledge it, but it’s not the same as doing it. So let’s make it our exercise for the next few days. Right here, we’re going to put our business plan together.
Let’s start with this:
Income Goals
It’s first on the list because it should be. You can’t form anything around an unknown number. So let’s decide what you’re going to make this coming year.
Pick a number – any number. Right now, think of a number that in your head represents a successful freelance career. Is it $50,000 annually? $100,000? Write it down.
Break it down. How much does that figure into per month? Let’s go with a hypothetical number – $50,000. That equals $4,166 and change each month that you need to make. How many hours do you want to work in order to reach that goal? If you work 40 hours a week, how many of those are you actually billing? Be conservative here. Assume in one month, you’ll be billing about 40 hours of work. That will get you to your goal. Considering that’s one-fourth of a typical month of 9-to-5, it’s a good number to start with.
Introduce reality. While $50,000 isn’t a bad number, that’s not what you’ll end up with. You have to pay taxes, bills, retirement, savings, and office supplies, among a slew of things. Even if you worked in an office for someone else, you wouldn’t be handed that $50K without something being deducted. Just know that your amount earned still has to head toward the essentials.
Modify as needed. If $50K isn’t going to cut it, modify. Shoot for $60K or even $75K. Just know that the amount you set is going to increase either your fee, your hours needed to earn that, or both.
Set monthly goals. It works for me to look at my earnings each month. I do it right here on this blog. It’s my way of checking my progress against my plan. So if you want to earn $50K, set a monthly goal of $4,166 and make sure to check at the end of each month to see if you’ve reached it. If not, you’ll be working harder the next month.
Be accountable. My earnings benefited greatly from my decision to share my earnings and actions here on this blog. Being accountable to someone else is a powerful motivator. Find an accountability partner – a friend, another writer, a partner, or post your results here each month on the Monthly Assessment post. Just answer to others and, more importantly, to yourself for your actions.
Now let’s apply what you’ve learned. What is your earnings target for next year? You can give me numbers, percentages over what you earn now, whatever you’re comfortable sharing.
Tomorrow: Expenses
12 responses to “Your Online Business Planning Session: Part One”
I keep a spreadsheet, Lori, which I update through the year. At the start, it's pie in the sky how much I expect/want to make.Through the year it evolves to take account of actual earnings from each client and I can forecast likely income. It's a good way to know whether I'm on track.
I think the continued updating is important, Sharon. Like you said, it's a good way to see how on track you are.
Do you find that once you've had some years under your belt, you can begin to more closely predict? I start with a set number because I've made close to that in the past. Then I add my raises to that. Always have to consider a raise. 🙂
I have a similar method. Gee, Sharon, when have I ever said that before? 🙂
I have a spreadsheet that shows what's been billed, what's pending and what's been paid. I run a monthly and quarterly total of the paid.
Your monthly accounting, Lori, is my kick in the rear reminder to do it. So, don't stop. 🙂
At first, it was more about just improving. Now, it's more targeted.
Great series going here, Lori.
I need to make some huge changes. First, I have to identify what I WANT, and then I have to come up with the steps to get there. THEN, I'll look at it, see what my target number is, and how I have to modify the wants to fit the needs.
This year's plan was great, but I didn't have enough fall backs. I discovered a lot of great things about how I want to work moving forward — now I have to apply them and make them a reality. It was the first year I didn't have to worry about fighting with landlords or commuting to B'way and all that, so it was the first time I had a stretch of time where I could really see cause-effect in my plan. Very helpful.
Good thing to include, Devon. What you WANT. Amen.
Here's where I meekishly admit I have no clue how spreadsheets really work. Anything involving lots of numbers is gibberish to me – and often he more someone tries to explain it the less sense it makes. For example, at yesterday's way-too-long neighborhood meeting (would have ended 30 minutes earlier if one woman had nattered on about unrelated things the entire time), the Community Policing Officer spent about 15 minutes explaining a page of spread sheets that explained four charts that were way easier (for me) to follow.
Despite a couple of great months earlier this year, the past couple of months haven't been up to my targets income wise, so I've been putting off adding it all up to see how I stand so far for the year. My guess is not-so-great, since the past month or so, instead of paying all monthly bills at once, I've had to pay the immediate ones first, and wait until more funds come in and pay the rest closer to their due dates. That might have more to do with the direct deposit snaffu, which was cleared up as of yesterday. (Apparently someone, not me, noted "pay by check only" on the forms I signed authorizing direct deposits. Go figure.)
Spreadsheets were a mystery to me too, Paula, until I created my own.
Mine is more of a list. The reason I use Excel is because that list is easier to add columns to than a Word-generated list.
Just what I needed… my goals/calendar program blew up and I've finally picked a replacement so I'm getting started with this now.
Thanks
I want to increase my earnings by 20%. The first half of 2011 was extremely slow, so the second half has been about financial recovery to meet my 2011 goals. I didn't make it, but my momentum has increased to help set me up well for 2012, and I need to take advantage of that.
I also want to improve on my income sources; increase income from my own projects. That will mean self-publishing more. I already have some starting material written; I just need to put in the time to polish it, get it edited and published.
I also noticed that I need to work smarter – I'm working too hard on some client projects, so the way I allocate time for a project and the income it eventually generates needs to be improved quite a lot. That also means letting go some clients who require a lot of work for a lower than my average fee. It also means doing more marketing to clients who have the capacity to pay me what I want to earn per hour.
As for keeping track, my bank offers a free online software linked to my business account which allows me to do my annual income plan and to invoice clients. I can then allocate incoming payments to specific invoices issued. It automatically generates a report for me based on my requested frequency ( weekly, fortnightly, monthly).
Good time to start fresh, Anne. 🙂
Good plan, Damaria. I like that you're seeing the increased business as a start on next year's raise. 🙂
In addition to the corporate objectives that are ingrained in the marketing plan, it should also consist of the corporate mission which also lays down the guidelines for the company’s objectives in marketing activities.
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