Setting income goals? - Let's deal with the mindset first
Setting income goals inside your business is something that I get asked about a lot and something that people really seem to struggle with. Turns out I have more than I thought I wanted to say on this so I’ve broken it down into some mindset stuff and then I’ll follow up with some practical pointers.
Let’s deal with the gremlins first….
The goal isn’t linked to anything meaningful
Firstly, why would we go about making more money if we can’t see the benefit of doing it? I quite like working 2 days a week, I definitely like that more than I like expensive holidays (I mean I’m working towards having both but to get there I’m always working on this stuff too!)
So, we all know that having more money gives us more options but at what cost? We can get stuck thinking that earning more money will be hard, that we will lose some of our freedom, and we might have to actually do something that scares us!!
When we start thinking about how much money we want to make it seems to be an open invitation for our money gremlins to come out and play - all the money stories from our past flood our mind with thoughts like “You can’t charge that much”, “You don’t know enough to charge that”, “People like me don’t make that kind of money”, “What if I fail?” “That sounds like it will take a LOT of work” These thoughts are not only a distraction, they can also stop us from even starting.
If the income goals of your business aren’t linked to anything meaningful there’s no focus to help move you past these limiting beliefs.
Make it meaningful
Start with Why ( to steal a famous line from Simon Sinek). Why are you in business?
You can have many purposes in your small business - me, I really like helping people understand money, when something clicks and they instantly feel relieved, confident and empowered it makes me happy. I’ve tried to give it up more times than I can remember but I can’t, I understand it all, I see solutions, I want to help.
What’s your why?
Maybe you want to end poverty, support a specific group of marginalised people, create art, remove plastic from supply chains or show people that there is another way to live. Maybe your why is to create a better life for your family and you’re sick of the 9 to 5. Whatever other purpose you have, for the purposes of this article, I’m also assuming that you run a business to make money that supports you in living a life that you love.
So how do your income goals support your business AND your life?
Most of us can see the difference it makes for our business but we forget about ourselves and how it will impact our life
Take a step back and ask yourself, “What is the kind of life that I am creating for myself and my family?”
I have a resource for you to get into the space of thinking about your life: give the Ideal Day Exercise a go to help you visualise the life that you want.
Being influenced by others
When setting an income goal it’s so easy to be influenced by friends, family, and peers. You hear people talk about hitting six figure months, or someone in one of your peer groups or in a mastermind you're in tells you that they're on 10k, 20k or even 100k months and you think, “Wow, I'd love to earn that much!” But instead of taking the time to relate it back to your life again, you’ve got hooked on the amount and forgotten the meaning. Get clear on your goal so you can stop trying to achieve someone else’s.
Choose your own path
The important thing is to set a target that is relatable to you, and your life. What people often don’t tell you is how many hours they work, how much work they’ve put in to get there AND how much of that income actually makes it into their pocket.
It can be hard to stick to your own path but if you don’t you’ll end up running a business that isn’t what you wanted at all. Did you do the Ideal Day exercise? Remember that's the type of life you want to be living.
Feeling “greedy”
Do you ever think ‘Wow, I’m being greedy, I don’t REALLY need that much money?’
Sometimes it feels wrong to want to have a large amount of money, or even a goal to make a large amount of money.
Doesn’t it sometimes feel like money is a bit like a big pie and if we take too much there won’t be enough for everyone? You find yourself taking a small slice, a tiny sliver to make sure there is enough but the next person takes a huge slice and you’re outraged. I mean you’re outraged about the pie, imagine how you feel about the money!!
Dismantling the belief
It isn’t how money works. It feels like it, but it isn’t. It’s quite complicated and a bit boring, but essentially the banks just create it. Yep that’s right, every time someone borrows money the bank creates money, that money didn’t even exist before, it’s literally new money. Read about How Banks Create Money here.
We’ve been raised to believe that’s how it works and there's definitely income inequality in the world, I’m not denying that for a moment. There's the super rich and people living in abject poverty but it’s not because of people like you and I having enough to live a fabulous life.
I also have a theory, I think I know you well enough to know you have a plan of what you would do if you had more money than you needed, you are a generous human. I know, and so do you, that you having more would create a ripple around you because you’d do good things with it. The world needs more good people with good intentions having the money to amplify their work!
Fear of failure
Goals right! - Insert eye roll - I’m actually not a big fan myself. If there is a goal, then there is always a risk that you don’t reach the goal and you feel like a failure 😱
If you’ve worked a corporate job chances are that goals have been used as a way to single people out that didn’t meet them or even as a way to get rid of people. People meeting goals were celebrated regardless of how they did it. I remember once being at an annual meeting of the company I worked for and they awarded a prize to the employee who had worked the most chargeable hours that year (it was a tin of Roses chocolates! I kid you not!! - no fat bonus, just some chocolate, and not even the nice kind). A week later he was off work sick with burnout.
These aren’t the kind of goals we want - it doesn’t have to feel like that.
Make it a game
There are ways that you can make it more playful. How can you take your goal and turn it into a game? I mean goals are part of games like football (apologies if you are the type of person that also takes football too seriously)
I should caveat this by saying I’m not much of a goals person myself, I’m an absolute nightmare for planning in my head (which is proving problematic as I go through the menopause) - however I know this works for some people - if it doesn’t work for you - don’t do it. Well, maybe try it first!
We have a tendency to get really attached to our goals and then if we don't meet the goals, we use it as a way to judge ourselves and beat ourselves up, or worse give up!
What if we could be more playful around it and think of it more as a game (if you are already annoyed, thinking it isn’t a game it’s really serious then this is an indicator that you might be quite attached to the outcome). I’m not for a minute suggesting that your need for money might not be serious but being too attached is stressful and doesn’t help!
It really, really helps if you can become less attached to the goal outcome, partly because it’s way less stressful but, and I’m not much of a woo person, ever notice how things work better when you’re not holding on too tight?
Creating the game
Let’s say your goal is to have a 10k income month, if you approach it as “I have to reach this goal otherwise…………..(insert your own version of impending doom) it doesn't feel much like a game, it feels stressful and our fight or flight reactions can kick in. We don’t make good decisions when we are stressed. What if instead we could “I wonder if I could………….?” or a “What would it be like to try to get to £……………….” or even “Wouldn’t it be fun if……..”
Now when the football team (yes we are back on that analogy, deal with it) decide that they want to win by 4 goals to 2. You think they just high five and run onto the pitch? Nooooooo - they then come up with a game plan of how they might score 4 goals, they have tactics, some tried and tested and some new.
What tactics (not weird icky marketing ones) can you use to win your game? How many sales would that need to be? How many conversations would you need to be having? If your conversion rate on your website is 3%, then you know that 3% of people buy from you - how many people do you need to have landing on your website? How will you get them there? Brainstorm - think of some ideas outside the box too and then come up with a game plan.
Then, and this bit is important, deploy the game plan. You can’t make all these amazing plans, skip the match and head straight for the giant jacuzzi. Watch out for the defense (your money gremlins) that will tackle you to the ground and derail your game plan - keep an eye and tackle them instead.
Now maybe you reach the end of the month and you didn’t quite reach the goal of your game. This isn’t an opportunity to beat yourself up. The opportunity is to look at what it was that you intended to achieve, what actions you took in order to achieve that, what actions didn’t you take, and also to reflect on how that month was for you? Did you have fun? Did it feel good? Did it look like the ideal kind of month that you want? - If your non-financial goal is a 3 day week but you worked 5 days a week, or 12 hour days, to meet the goal, then you're not building the business in the way that you want.
TOP TIP - Don’t think of things in terms of right and wrong, we have way too many morals tied up in those words - try using what worked? and what didn’t work? - they just seem to be gentler! I use this reframe ALL the time.
In my next blog I’ll be looking at the practical side of setting an income goal.