I made £35 in my first year as a freelance designer. (Yep, just £35!)
In my second year? I only made £6530. I made £7288 the next year.
I remember standing in line in McDonald's and asking my friend if I could borrow money for my McChicken Sandwich meal because I was afraid my card would decline at the cashier.
Thankfully, it went uphill from there. I went on to make £36k, £62k, and my business has kept growing.
My design services went from being in a constant slow
season to continually being booked 6 months in advance.
I was able to work less (three days a week to be precise!) and earn more so I could travel the world.
I now sell an online course that has generated six figures and has over 650 happy students.
I'm not telling you this to brag. That would be gross!
I’m telling you about my money journey so you’ll see that it didn’t happen overnight. I'm happy and proud of my slow and steady business growth because I learned a lot of valuable lessons in that time... but I know I could have reached this profitable point in my business a lot quicker and easier if I had created an income plan from the very start.
An income plan is a spreadsheet that outlines how much money you want to make and exactly how you'll make it.
I didn't have this kind of plan in my first three years of business but when I started using one, my income exploded.
Watch the video below or read on to find out how to create your income plan!
Marketing played a big role in how I was able to build a profitable business but before I did any kind of marketing, I created an income plan to help me understand:
How many clients I needed.
How much I should be charging to earn the money I needed.
Passive income streams I could add to my design business that would boost my income without requiring lots of effort.
Without this plan in place, no amount of marketing would have saved my business from agonizingly slow growth.
How to create your income plan
Before I start, I want to explain three important things:
I’m using Google Sheets (part of Gsuite) for this tutorial.
I’m using US dollars as the currency for this example. If you’re using my Income Plan Template and you don’t use USD, you can change your currency by clicking Format > Number > More Formats > Currency.
The goals and figures I use in this example are not real.
Now, let’s create your income plan!
01. Calculate your yearly income goal
Use my previous blog post to learn how to work out your yearly income goal.
02. Set a 'Stretch Goal'
Let’s say you completed step one and realized you need to make $50k per year.
Type that income goal in the ‘Realistic Income Goal’ section.
For this example, I’ve chosen $50,000.
Next to ‘Stretch Income Goal’, type a goal that’s a little higher than your realistic goal. This goal should challenge you more and it’s there to help you reach higher heights with your business.
In this example, I’ve chosen $80,000 as our stretch goal.
Use a tax calculator (like this one for UK business owners) to work out approximately how much tax you’ll pay and add that to the Tax Prediction box in the spreadsheet. If you’re not sure about tax, ask your accountant for advice!
Leave the other sections blank because we’ll come back to them.
In this section, fill in your current services!
It helps if you have packages. If you don’t, you should consider packaging up your services. It makes it easier for you to predict your income and it’s also easier on clients because clients prefer to know upfront how much your services will cost and what they will get. A package accomplishes both of those things!
In the spreadsheet, you'll need to enter your services like this:
First, enter the name of the service. (In the screenshot above, I just named them Service #1 etc!)
Enter the price of each package.
How many of each package do you think you'll sell per month? Enter that number in the 'Predicted Monthly Sales' section.
How many months will you sell this package in a year? Or, think of it like this: how many clients will you book for this package?
Once you filled out those section, your 'Predicted Yearly Income' will automatically be calculated.
04. Evergreen products
Fill in any existing products you have and add a prediction of how many sales you’d like to make of these products.
Don’t have any products? I want you to think of one product you could launch in the next twelve months. An Ebook or a template is the easiest product to start with.
Here’s an example:
Maybe you plan on launching a new service or product? If not, you definitely should.
Launches are a one-time event. Instead of creating a product and simply adding it to your website, hoping sales will magically roll in, a ‘launch’ is when you build hype around that new product. You ‘launch’ a product by promoting it across social media, your blog, your newsletter and maybe in webinars.
In this example, let's plan to launch a $10 product and predict 100 sales.
Need help predicting sales? Most businesses convert 1 - 3% of their audience, so add the size of your email list, communities and social media following together, then work out what 1 - 3% of that is.
A webinar is a live seminar conducted over the internet. You can use tools like Webinarjam to host your webinar!
In this example, I’ve planned two webinars throughout the year to promote and sell our product and generate some extra income.
In this section, plan a few webinars to generate more sales of your digital products!
07. Check the grey box at the top of the spreadsheet
A sum of all your predicted sales will now appear in the grey box. If you put in the work and stick to your income plan, this is the income you are most likely to make over the next twelve months.
How does it compare to your income goals?
If it’s too low, adjust the price of your services and products. If it’s higher than you thought, you now know you need to dream bigger and set higher income goals.
08. Business Expenses
Now, if you’re using my Income Plan Spreadsheet, click ‘Business Expenses’ at the bottom of the screen.
If you’re creating your own spreadsheet, create a new sheet in Google Sheets by clicking Insert > New Sheet.
Then, add each of your expenses to the Business Expenses section of your Income Plan.
(Need to add more rows for more expenses? Click a row > Right click > Insert row.)
09. Go back to your income plan
At the bottom of the Google Sheets screen, click ‘Income Plan’.
Add your business expenses TOTAL in the ‘expenses’ section near the top of your income plan.
After you do that, a new total will automatically appear in the ‘Income after tax & business expenses’ section. This section shows you how much income you’re actually taking home.
10. Income Tracker
Go to the bottom of the screen again. You’ll find the ‘Income Tracker’.
Each month, open the ‘Income Tracker’ and add your monthly income for each income stream.
Freelance income fluctuates. This Income Tracker helps you see what you’re making each month on average from each of your income streams.
Sometimes, certain income streams don’t make as much as you’d hoped. This tracker helps you see which income streams to get rid of and which to invest more time in.
11. Create a 90 Day Profit Plan
Your new income spreadsheet shows you how many clients you need, what you should charge and what products to sell or launch to achieve your income goal.
But it’s not enough just knowing what to sell and how much to charge.
You need to turn your goals into daily, actionable tasks!
Maybe you’re great at setting dreamy goals buttttt you never follow through and implement them.
Spend hours working on low-priority tasks.
Feel overwhelmed constantly.
Feel emotionally drained from seemingly “important” tasks.
Don’t worry, I used to feel the same way until I joined The Profit Planner Lounge*.
I was intrigued by the founder, Haley, and how she had started her business years after me yet she was making thousands of dollars more than me each month. (This girl has $36k months people!)
Inside The Profit Planner Lounge, Haley teaches you how to create a 90-day profit plan.
Finding out which tasks bring you the most money.
Eliminating all the emotionally draining tasks.
Automate what’s driving profit - so you can get more of your life back!
Mapping out your income goals into a daily, actionable, color-coded to-do list!
As a member of the Lounge, I’ve realized just how much time I was wasting on low-priority tasks that didn’t bring in much profit. And as a result, I’ve been able to focus only on high-priority tasks so I can work less, make more and travel this gorgeous world we live in.
Click the button below to join me and Haley in the Lounge!
* All links marked with an * are affiliate links but don’t worry, I would never recommend a product I don’t love!