Starting your own WAHM business is both exciting and terrifying. How can you possibly have so many emotions at one time, right? You can feel overwhelmed and nervous, but you are also determined to make this a success. So, what makes it a success? In a business sense, it’s focused on the financials.
You’ll hear a lot of bloggers or business owners share how they make $10k or more per month. It can make you feel bad for only making $1k or $5k per month. And when you’re starting out, it can make that $100 seem tiny. But everyone’s financial circumstances are different.
I used to share my income reports, but I stopped doing that a long time ago. I realized that income reports don’t really help many. When I read others’ income reports, I just ended up depressed or annoyed. How were they making so much more than me? I didn’t stop to realize that actually, my own income was just where I needed or wanted it to be. You need to think about yourself and your own situation to determine how much money you need to make each month in your own WAHM business.
It’s not the same for every WAHM business
Some people need to make $5k per month just to break even. Others will need to make $15k per month due to overheads. When you run a WAHM business, you will likely do it online. You may keep the overheads to a minimum, which means a smaller amount is more than viable.
Don’t compare yourself to someone else. Take a step back and assess your own needs. Here are my top tips for determining how much you need to make each month in your business.
1. How much do you spend monthly? There are chances that your business is to help with the running costs of your home. Start by adding up your rent, your utility bills, your childcare bills, health and life insurance, every single outgoing that you have in your home. You also need to include all business expenses. Even if you have a partner who also brings in money, you want to start with full outgoings that you have. I always believe that you should be ready for everything. Some of your outgoings you will be able to claim back as a tax deductible, but it’s easier working with the full amount.
2. Do you have money to cover your taxes? When you work out your income needs, you need to remember about the taxes that you’ll have to spend. That means adding a little extra so you can save money for your taxes. This will be different depending on State and country taxes. In Ontario, Canada, I save 30% of my income for tax purposes. I don’t usually end up needing all that but it’s there just in case.
3. How much do you want to pay yourself? You’re paying yourself an income, right? This is something that many people overlook. They focus so much on making enough to cover the outgoings of the WAHM business that they forget about themselves. I pay myself $1,000 per month. This doesn’t sound like a lot, but this is income just for me to spend on whatever I want. The food bills, the rent, all of that is already covered by business expenses. This $1,000 goes towards convention tickets, books, clothes, etc.I don’t use all that money each month. Some of it goes into savings or I put extra on the car loan.
4. Can you put money back into your business? Be honest; do you have money to invest back into your business? If the answer is no, you need to rethink a few things. When you start, you may not need to invest too much. As you grow and you focus on growing, you’ll need to do more. The amount you invest will depend on what the business is, how you need to grow it, and what you want to achieve. Look at your business goals and make a plan.
5. Are you saving for retirement? When you worked for someone else, some of your income would have likely automatically gone into a pension. Now you’re working for yourself, this is something you need to think carefully about. You need to start investing into your future. Add your retirement savings to your WAHM business needs.
Every little bit adds up
You may be surprised by the amount that you’ve just added up. It can be shocking to find out how much you spend each month on yourself and how much you need to make within your business. Don’t let this put you off starting your WAHM business. It’s a goal to work towards.
Now you need to put a plan in motion. Figure out how much you need to grow each month until you’re covering all your outgoings and business costs. As you start to make extra (and with a good business plan, you will) you can then put extra in savings or in your retirement for a better future.