When people think of personal finances or financial planning, we often think we’ll be told to spend less and save more. It’s money we feel like we can control because it’s already in our hands. Worrying about the money you already have has its limits though. There’s only so much less you can spend and only so much more you can save.
Thinking about increasing your income often feels like something that someone else controls, whether it’s a boss, a client, or a customer. On the flip side, the potential for earning income is much greater than managing the dollars you already have and growing your income has the most impact on your financial success.
With that in mind, below are some steps you can take to start focusing on systematically increasing your income in 2016:
- Put together a 12-month cash flow projection
As an entrepreneur, we have to get out of the mindset of thinking of our income as month to month. Income ebbs and flows each month depending on marketing, holidays, the weather, almost anything really. A true way to gauge how well your business can do is to project your potential income for the next year.
This is where a 12-month cash flow projection comes in. You can download a sample template here, but the basic premise is this: you record the income you expect to receive on gigs you already have, products you expect to sell based on past sales, and other income sources you can mostly count on.
Then you do a little goal setting and stretch your sales projections to what you think you can grow to. Yes, this will feel like guessing and yes, it may or may not come true, but by putting numbers down to paper, you have giving yourself a concrete amount to strive for. Your resourceful brain will fill in how to get to that number.
- Break down your big goals into small, measurable goals
Putting together a cash flow projection also allows you to break down big numbers and big picture goals into measurable steps.
If you want to sell 1,000 units of something in the next year, that’s only 83 units a month. Also, it’s not a big deal if you only sell 75 units one month because that means you know you need to hit an extra 13 the next month and you can plan for that.
This may mean running a sale, increasing your marketing, changing your marketing plan, adding an extra salesperson, but whatever you end up needing to do next, your decisions will be based in manageable and tangible goals that you can carry with you each month.
- Ask for a raise or raise your rates/prices
Whether you still work a day job or you work for yourself full time, don’t be afraid to ask for more money. If you’ve never asked for a raise before, it’s terrifying and thrilling at the same time. Just keep in mind that the worst that can happen is you are told no, and really that just means no, not right now.
If you need some tips and strategies for how to ask, you can listen to this podcast episode on the steps you can take to prepare for the raise conversation.
Raising your rates or your prices can feel a little trickier. The best way to gauge is going to sound a little strange at first. If no one thinks it’s too expensive or feels like they can’t afford it right now, then you most likely need to raise your rates.
You want people to place value on the amount they are paying you. Otherwise you might find yourself competing with similar products on price alone instead of quality or brand loyalty to you and your products.
- Supplement your income through side hustles
We’ve talked about this before, but diversifying your income is one of the best ways to truly be financially secure and independent.
Part of this equation is building or creating side hustles, especially as you’re trying to grow your main business and barely breaking even some months.
Make sure the side hustle you choose doesn’t take too much of your time away from building your business. Focus on the side hustles that relate as closely as possible to what you are already doing.
By doing things that relate to your business even indirectly, you might find that the side hustle is just as viable as your initial business idea and that it might make sense to integrate it.
- Put yourself out there in small ways
This can be the hardest part for most of us. You’ve made your plans, you’ve put together your projections, and you’ve decided what you can do on the side. Now it’s time to actually tell people about what you’re doing. Gulp.
Yes, you will need to step out of your comfort zone as an entrepreneur, especially if you’ve never considered yourself a salesperson, but you can take one step out at a time. Here are some quick ways to start putting yourself out there:
- Reach out to friends and family by sending an excited email
- Post one or two things about your new venture on social media a few times a week
- Leave comments on blogs or websites with audiences that would enjoy your product
- Reach out to bloggers to offer product samples or to do guest blogs
- Find local networking events in your city and commit to going to a few a month
- Tie your goals to actions
Results-oriented goals are good for tracking purposes, but often not good for motivation purposes. It can feel like a lot of pressure to hit these numbers each month if that’s the only thing you have to focus on.
It can also give you the sense that you might not really be in control.
One of the best pieces of advice I got from my business coach was to find ways to tie your goals to actions that you can take.
For instance, taking a few of the above examples, instead of focusing on how many bloggers respond back to you, make it a goal to reach out to 10 bloggers a week. Who responds it out of your control, but you can play the numbers game and make it work in your favor.
If you decide to go to a networking event, also commit to talking to at least 3-5 new people. Those 5 people could turn into one lead and who knows where that might go. I met someone at an event who introduced me to her friend who ended up putting me on a panel of financial experts.
By turning your goals into actions, results will naturally follow.