As you embark on your home business, one of the first things you should identify is your financial goals – that is, how much would you like to make?
Many people will answer this question with a definitive “as much as possible” while others may be content with making enough to cover certain household expenses such as groceries or to save for vacations or recreational activities. Quantifying your goals in this way is an important step in identifying the best type of business for you. For example, if your goal is to make $20,000 in one year to help offset your child’s college tuition costs, chances are, direct sales will not be the way to go. If, on the other hand, you have a talent for creating handmade scrapbooks and would like to make a little extra money to support your hobby, you may consider becoming a representative for one of the many companies that sell scrapbooking related supplies.
Once you settle on an annual income goal, divide that figure by 52. This will be your weekly income goal. You can break this down even further by dividing by five (7, if you plan to devote some time each day to your business) to determine how much you will need to make each day.
Certainly you will probably not have money coming in each and every day, but chances are, you have projects that are due at various times during the month or clients for whom you will work during the course of a particular week or month. While you may not be paid for these services until the following month, you are, in a sense, creating an accrual for your work during the current month. Keeping track of your income at the time it is earned (as compared to when you are actually paid), will help you more accurately match your actual productivity with your overall goals.
Each week, you should take the time to compare your income with your goals; if you find that your anticipated income is falling short of your expectations, it may signal that it’s time to start identifying additional sources of work.