Branding with an Open Heart Series – Lesson 25: Projection
Knowing What Lies Ahead
The last thing I want to do is overwhelm you with accounting principles and projections. So, I created this segment for the newbie entrepreneur who is just starting out with branding and business development; the entrepreneur who is re-branding and re-organizing their business because of a new target audience or a new business idea; or someone who decided to go a whole different route.
This post is for the entrepreneurs who do not have an accounting or a business management background. So, if you are cool with numbers, you have my permission to skip this segment.
I want to help you meet your goals by the end of your first fiscal year. What do I mean by fiscal year? The definition of a fiscal year is a period used for calculating annual financials in businesses and organizations.
You have a choice. You can start your fiscal year as the regular calendar year (January 1 to December 31), or in the middle of the year. For instance, if you started your business on June 1, 2013, then the end of your fiscal year would be May 31, 2014.
But let’s not use fiscal. It is too accounting like. Save it for your tax preparer. We are going to call your fiscal year the “New Year.”
Defining you yearly financial goal is a good starting point, but you still want to break it down into monthly increments that are easily obtainable. By using a monthly tracking system you can see what is coming in and what is going out. In addition, most of your personal and business bills are invoiced on a monthly basis. So, it is easy to get a snap-shot of your income and expenses and make adjustments when needed.
How much do you want to make for your second fiscal year?
Don’t answer the question just yet. Let’s further discuss when you should be earning the income that you choose. Decide on a realistic monthly income for you to sustain your business, run your household and create the lifestyle you choose.
Now, I do not mean your 1st month of business, or your 6th month or even your 12th month of business. This entire year is devoted to branding and business development. You will be setting up the building blocks to gradually increase your income month by month.
The Second Fiscal Year
The first month of your second fiscal year, is the month that you will use to reach your desired [realistic] monthly income. That means if June 1, 2014 starts your next fiscal ‘New Year,’ then June 1 to June 30 will be your first month of your fiscal ‘New Year.’ And that will be the first month of achieving your income goal. Are you following? No worries, I have instructions below.
A Little Note about Overnight Success
It may seem that some entrepreneurs claim to have overnight success. And, it’s very unfortunate that the untold story before the claim is never told. However, the very few who suddenly become successful don’t claim the fame for long. The success is lost just as quickly as they received it because they did not know how to manage the back-end of their business to maintain the supply for the audience and the demand for their products/services.
One More Note
When you decide on your monthly income goal, DO NOT include other income. That means: employment income [part-time or full-time]; supplemental income; support income [alimony, child, family and friends]; income from another business (side hustle, hobbies, or another entity). We are only focusing on the income of this [your] current business. This income will work to sustain your household and your business in the future days to come. This is especially important for those who want to leave their current J-O-B; in an unfortunate financial situation; or uncomfortable financial state of mind.
So, let’s get started: Follow the instructions and post any questions in the comment section below.
- Write the Fiscal Year Start Date:
- How much do you want to earn in your second fiscal year? Yearly Income Goal:
- Break it down by dividing it by 12. Your monthly income goal for your second fiscal year: Monthly Income Goal
- Add up all of your current business expenses, plus what you can anticipate for the rest of your first fiscal year. Be realistic. Your start-up phase can take up to 3 years. Current Monthly Business Expenses:
- Add up all of your personal expenses, including the debt that you are not currently paying on and the expenses that you would like to have such as entertainment, travel, investments and savings…oh and me time. Again, be realistic. Current Monthly Personal Expenses:
- Create a Monthly Profit Goal for your second fiscal New Year. Monthly Profit Goal = Income Goal – (Personal Expense + Business Expense)
- Monthly Income Goal:
- Monthly Personal Expenses:
- Monthly Business Expenses:
- Monthly Profit Goal:
Follow the formula. The math is easy. I promise.
Once you figure out your Monthly Profit Goal…this is the figure you shoot for while you are building your business. Easy peasy. Once you make that goal, that is when you can invest in yourself and your business to maintain your monthly income.
So many of us are shooting for the stars, that we don’t take the time to draw the map to get there. And, most importantly to maintain the path.
“The future belongs to those who believe in the beauty of their dreams.” ~ Eleanor Roosevelt
Take Action: Now, if you have any questions, please post them below in the comment section. I’m waiting…