Even though I would like to cancel my subscription to 2021, that’s not possible. I will be recording an episode about the past week’s events, but I need a couple more weeks to process what’s happened. That said, there’s nothing more American than focusing on business. It’s the beginning of the new business year and if you’re like me, you’ve spent a significant amount of time reviewing what did and didn’t work in your business during the previous year. While most business folks anticipate some volatility and uncertainty into their businesses: pandemics, recessions, and would be coups aren’t on the list. Despite not being able to write books from March through the end of the year, not hosting my Money on the Mountain event and not pushing my course sales-I made more. What I learned from this was that I’d made the right decision when I focused on diversifying my income. In this podcast episode I would like to talk about setting financial goals for your business in 2021. There are a ton of opportunities and pit falls to watch out for. Listen on!
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Show Resource
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Show Notes
- One of the most challenging times in my business was a couple of summers ago. I was just so mentally tired. I even called my realtor and had her draw up papers to put my tiny place on the market. I would have left that sale with around $125,000 after expenses. By the way, I put zero down on my place. That’s a story for another day.
- But, I just found myself thinking that I’d made a mistake. The mistake was going into business for myself. Then, I decided to back off on selling the property because I didn’t feel like having to deal with people coming through my home. Instead, I got back to work.
- For many entrepreneurs there is a breaking point. Where you sit there and think why in the hell am I doing this to myself? That was my moment. I was frustrated because I had this crazy idea that I needed to diversify my income. I began really focusing on that project in 2018 but then I stalled out a little bit.
- In 2020 I would be so grateful that I had focused on income diversification
Financial Goal #1 What Do You Want to Earn?
Spend some time looking at your cash flow. What is making you money in your business? What isn’t? What are you willing to zero in on and focus on scaling over time? Is it possible to scale your most lucrative income streams?
For me I decided on an annual income. I’ve also set up systems to help me measure my earnings goals.
- XERO for accounting
- A separate business account
- A Google Doc to keep track of projects
Then, identify your revenue streams. Here are mine:
- Ebooks
- non-fiction
- fiction
- Course sales
- Freelance writing
- Coaching
- Events
- Webinars
- In-person
- Affiliates
- Sponsorships
- Ads
- Community Manager position for a podcasting organization here in Denver
Most of what I’m focusing on is attracting people to my passive income products. I find what I’m doing to be much easier than before.
Financial Goals #2 Work the Numbers
I’m in a private group of high earning (6 figure) freelancers. No, I don’t earn $100,000 from freelance writing. At the beginning of this year we participated in a survey. In this survey they answered the following questions:
- How much the get paid on average per word
- How many hours per week that they spend working on writing their content.
- How many clients they have on average
- What their goals are for the year.
Here is what I learned from that survey
- The average per word per project for those freelancers is around .40
- They’re getting paid around $300 at the low end for a 1,000 article and up
- Because they’re pretty well established in their businesses-they don’t pitch that much. Their platforms help get them in front of future clients.
- On average these entrepreneurs worked on 5-10 projects per week
- 15-40 hours of work per week. This depended on each person’s work style and lifestyle
- 12-20 clients on average for the year
The other very helpful piece of advice was to focus on working with anchor clients. Basically, working with organizations and individuals who have ongoing work. I’ve spent quite a bit of time working through the numbers that I need to hit in order to hit my solid 6 figure earnings goal.
Financial Goal #3 Budget Your Benefits
And Other Line Items
If you’re working for yourself or new to entrepreneurship this may be one of the most difficult things that you do. Here are some of the line items that you need to consider:
- Health insurance-I now get my through my Community Manager position. It’s crazy expensive.
- Dental insurance-I pay $50 a month for that
- Vacation time and sick leave-I work a 10 month year so I have to earn enough earlier in the year to budget for that time off.
- Retirement
- Emergencies
- Investments
- Professional Development-Attending events, coaching, and courses
- Fun
- Taxes
I’m now using a new tool called Qube which is a digital envelope system app that integrates with an actual debit card. You hook it up and move money into the different envelopes. Then, when it’s time to spend you click on the envelope that you would like to use while you’re in the app. I like this because I won’t have to have multiple bank accounts for that.
7 Lessons Learned
In the 5 years that I’ve worked for myself and as an entrepreneur I realized that I needed to spend A LOT more time working my numbers. That clarity helped me focus more on taking action throughout the year.
- Passive income changes the energy of your business. Once I began regularly earning passive income through ebooks, courses and affiliates, I was able to make different choices in my business. I could say “no” to projects and clients that didn’t serve me well.
- Spend some time figuring out how to build passive income into your business. It might take awhile to build up a significant income. However, even if you bring in $500 a month that money could be reallocated towards marketing, support, etc.
- What’s your minimum? It’s important to figure out the minimum that you need to have coming into your accounts per month. And, when that money needs to hit your accounts. Basically, figuring out your cash flow. I will be honest and say that this was the hardest part that I had to figure out with my business finances.
- Work with a CPA that you like. I worked with a CPA named Michelle when I first started. She was scary and made me uncomfortable with working with a CPA.
- Do what you can to create a buffer in your finances for dips in income.
- Track your income-I will admit that there were many years that I didn’t do a good job with this. That was a mistake.
- Always give yourself a raise-This could look like taking the following steps:
- Setting a minimum earnings per project.
- Pitching new projects that pay more
- Requesting an increase in rates during the New Year
- Creating new offerings in your business
- Packages
- Avoiding hourly work-There is nothing wrong with hourly work. But, in entrepreneurship you’re looking to maximize time and emphasize expertize. The hourly model makes it difficult for entrepreneurs to do that.
- Raising your rates for your products/services/projects
- Networking and allyship-This one is HUGE. You MUST focus on this aspect of business building.
- There are closed Facebook groups
- Become a part of a Mastermind group-I’ve participated in Mastermind groups since 2016 and they have been a key part of growing my business. Currently I’m in three.
- One that I’ve been a part of for years. This one is much more informal and more like meeting with family. POC
- A new Mastermind that started this week. This one is an all POC group of women online entrepreneurs based here in Denver.
- A closed Facebook group of high earning freelance writers. These are 6 figure or more earners.
- How these mastermind groups help me:
- They share business building tips
- They talk about useful tools
- Discuss business strategy
- Share opportunities
- Talk about who to work with or not!
- Best practice tips
- Create a client buying journey-What is their client journey experience with you? So, what does that look like?
- Free to high cost. In my business that looks like the following:
- Blog/Podcast/Social Media content-Free
- Podcast Interviews and other places where I share my expertise-Free
- Affiliates-I focus on win/win affiliate relationships. Do they serve my audience?
- Ebooks-$2.99-$19.99 I’m raising the price of a couple of my books this year. These are my non-fiction books.
- Webinars-These can be free or low cost experiences
- 1-on-1 Coaching-In 2020 I had a number of people reached out to me for coaching. Because I was testing this out I let my clients set the price and here’s how. I had them pay what it was worth. The average was about $200 for an hour.
- Course Sales-Students can purchase a lifetime of the course option OR pay a subscription.$645 for the lifetime of the course option or $67 a month for the subscription. I decided to add a subscription last year vs. a payment plan. I wanted to make the course available for more people during a financially intense time.
- I may develop some additional mini-courses throughout the year ranging between $47-$97
- Freelance projects .40-$1 a word. I’m pretty fast now so these projects aren’t difficult for me to knock out.
- The Branding Lab-This is my high end coaching product that I’m rolling out this year.
- Free to high cost. In my business that looks like the following:
- Work on your money mindset-I never realized how much my money mindset would negatively affect my business. For many years my money mindset depressed my business earnings. Why? Because I was cleaning up a financial mess and part of that clean up was dealing with my beliefs about money. Those beliefs included:
- Whether or not I deserved to earn more
- Imposter Syndrome-Who am I to say I’m worth what I’m saying I’m worth?
- Don’t assume that people know what you sell. Basically, always be marketing your products.
Hopefully, this episode has been helpful to you as you work on your business financial goals. I wanted to be honest not only about what I’ve learned along the way, but also the mistakes that I’ve made. Good luck and make that money!
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