I have been reading a lot about making goals for your business. If you have been following along, you know that I must have my deadlines. I also must know what my goals are. What exactly am I working toward?
I don’t have an actual business plan (although I’m considering writing one) but I do have written down goals and plans to meet them.
For example, one of my goals is to be able to make enough money to pay for preschool for my son. I love being a stay at home mom, but there are no kids around that are his age. I am a firm believer in socialization, so he’s going to preschool a few days a week.
Writing down your goals is only the first step to defining what you are working toward. It’s great that I know I want to put the baby in preschool but what exactly does that mean? This is where you have to work a little bit. You have to figure out the costs.
In my situation I had to figure some things out:
- How many days/hours do I want him to go?
- How much will it cost per month?
- Will I have to provide lunches?
- Are there any hidden costs (field trips, art supplies, travel costs)
Once I have that number, I have my base financial goal for the month. I could take that number and say that I need to make x amount each month but without a little more work, I would come up short every month.
I need to know what my hidden costs for the business are. These are costs that you can’t really bill a client for.
- What fees do I need to pay regularly (association fees, credit card processing fees, etc.)
- How much are my office supplies (ink for the printer, paper, etc.)
- What do I have to put back for taxes?
- Any other hidden costs
I first need to pay the business costs before I can pay the preschool costs.
Finally, I need to plan for slow months. I’m a crafter and a freelancer. There are going to be months that I don’t meet my goals. Hopefully, not many, but I still have to plan for them. Preschools don’t accept IOUs when your business is slow. Since it is my job that will pay for the daycare, I can’t expect to take the money from my husband’s income to pay for the slow times. Therefore, I should have a few months of tuition in an emergency account.
Now I have a clearly defined plan for sending my son to preschool. This is not my only goal, but it is a good concrete example of how I figure out how much I have to work each month.
Do you have clearly defined goals? How did you come up with your plan of attack?