Do you know how much you need to make daily in order to reach your yearly financial goal? If not, here’s a guide on how to calculate your daily income goal.
How I messed up when I first started my entrepreneurial adventures
When I was first thinking about quitting my last job back in 2014, I had to do a lot of research. Aside from building cash, I also wanted my new business to be profitable enough so that I could quit working there to work full-time for myself as soon as possible.
I recklessly decided to quit with the “animal backed into a corner” mindset. I desperately wanted to be out of a job and was going to make it happen no matter what. But I went about the process in a way that ended up hurting me more than helping.
I remember feeling like things were finally starting to fall into place when I first got a business loan from my bank in Englewood for $8,000. Everything seemed perfect! I was working with a business partner and we had landed a few small projects. All signs were pointing towards success.
And then a year down the road, I was looking at shutting down the business. It had turned into a constant struggle to make sure every dollar coming in went towards covering bills, while also giving me enough of a paycheck to cover my expenses.
So what did I do wrong?
I made the mistake of not knowing how much money I needed to bring in daily in order for everything to work out.
Why is it important to know how to calculate your daily income goal?
Obviously, you want your primary survival needs to be covered, like your bills, food, clothing, and transportation. Beyond that, knowing how much you need to make daily is vital for your business’s growth. Start by calculating all of your personal and business expenses for the next year. Try to be very thorough and include everything that you plan on spending money on. You’ll also want to factor in savings goals, like your crypto wallet or IRA account.
Once you have all of this information, you can easily find out how much money you need to make for the year for your survival needs.
Apart from survival needs, you should also include other income goals. Perhaps you want to have a special vacation or buy a new car. Whatever your other financial goals may be, try to include them as well.
Your daily income goal is the number you need to fill your pockets with on a daily basis if you want that big financial goal to come true within a given time frame.
Your daily income goal helps you calculate all other important numbers like: How many clients or sales per day do I need? How much will this cost me and how long will it take? How much should I charge for my products and/or services?
How To Calculate Your Daily Income Goal
To figure out your daily income goal, take the yearly financial number you’re trying to achieve and divide it by 365. If you want to make $100,000 this year how much do you need to make each day? You would say $267.69 (100k/365).
$100,000/year / 365 days = $267.69 daily income goal
Similarly, you can look at this from a monthly perspective instead of yearly if you prefer, just switch the numbers. Daily income goal = monthly income number / 30 days. Monthly income goal = $10,000/30 = $333.33 daily income goal
$10,000/month = 30 days = $333.33 daily income goal
How many sales in a single day do you need to hit $267.69 or $333.33? Chances are, you may only need a few sales to hit your daily income goal if you’re good at what you do.
Sticking with the $10,000/month example here, you can accomplish this through a number of methods. You can sell your own products or services, sell other people’s products (affiliate marketing) or find a way to capture leads and then sell them products (customer acquisition).
Let’s say you’re selling a $10 product or service. In order to make $333.33/per day, you’d need to make at least 34 sales (and you’d actually hit $340, a little more than your daily income goal).
Now, what if you’re selling a $100 product or service? In order to make $333.33 per day, you’d need only 4 sales, and you’d pass up your daily income goal with an additional $66.67.
Only 4 sales would be needed in order to hit your goal, which is much easier to accomplish than 34 sales.
So what does this look like for someone who is selling a $10,000 product or service? In order to hit that $10k monthly goal, you’d need to sell only 1 product or service per month. The funny thing is that it’s not too far-fetched and can be accomplished with some basic marketing techniques.
How I calculate my personal daily income goal
I’m a visual learner, and it’s important for you to learn how to calculate your daily income goal the same way I do.
I use a spreadsheet when I’m adding everything up, so naturally, I can’t share it online for you to download and edit. However, here’s an example of how simple it is for me to do my personal daily income goal calculations (everything was calculated annually):
- Utilities (things like gas, electricity, water, internet): $6,511
- Insurance (car & house): $4,363
- Clothes: $5,760
- Gas & vehicle maintenance: $2,686
- Groceries for a family of 4: $10,884
- Family vacations: $8,000Birthdays & Holidays: $2,500
- Savings (crypto, ira, savings account: $7,200
- Massage every other week: $1,920
- Liquor (I love a good whiskey): $600
- My coffee from 7/11 every morning: $788
- My wife’s Starbucks budget (she only drinks it on the weekends): $830
- XBox Live subscriptions for me and my 2 boys: $600
- Netflix + Hulu: 386
- Homeschool software and supplies: $720
- My wife’s hobbies: $2,164
- Gym memberships for me and my wife: $530
- Pet food and supplies (3 dogs, 2 cats): $860
- All of my business expenses: $27,122
My total expenses for the year: $77,913. That means that my daily income goal is only $213.46 in order to cover all of the things that I planned on spending money on. Since I charge anywhere between $5,000 to $10,000 per site, for most months, only need to sell 1 website in order to hit my goal.
Of course, your expenses are going to be different than mine. They may be higher or they may be lower. Your daily income goal is personal and customized for you.
Of course, every industry is different and the daily income goal will vary widely depending on your specific field. Daily income goals can be difficult to calculate if you’re not clear on what number of sales or clients you personally need in order to make the money that you want weekly, monthly, and yearly.
This is where it’s important for you to clearly define your business and financial goals and how much time and money each one takes to achieve them so that you can create a plan to hit your daily income goal.
I know this may seem daunting at first because honestly, I didn’t know where to start when I first started my service-based business 3 years ago. What do I sell? How much do I charge? How many people do I need to pitch or have a conversation with in order to meet my daily income goal?
These are all questions that you need to answer if you want to hit your daily income goal. If you’re stuck and not quite sure where to start, reach out to me, and let’s work together one-on-one through a consultation where I’ll help you figure out exactly how much you need to be able to achieve your dreams and goals.