The path to solopreneur success is filled with potholes and detours. Finding the perfect balance and achieving financial goals takes dedication and a few key factors. Those who win at the game often have a specific set of traits — all of which you can develop.
Setting solopreneur financial goals is your first stage of making a living so you can continue working for yourself rather than a corporation.
Setting Financial Goals: A Path to Solopreneur Success
1. Know the Statistics
Understanding the facts is one of the best ways to prepare and set realistic solopreneur financial goals. The Small Business Administration estimates there are 33.3 million small businesses in the country. Not all of them are your direct competitors, but millions of entrepreneurs are vying for the attention of a limited customer base.
Dig a bit deeper and find specifics for your industry. The more facts you can gather, the easier it will be to understand and set potential goals. You should also look at competitors and how much revenue they bring in during the same time or what other goals they achieve. Your direct competition’s moves are a good indicator of what you should accomplish at minimum.
2. Use the SMART Model
Most experts agree that goals should be achievable and measurable. Utilizing the SMART goals model ensures you have detailed enough information to plan your steps. Here are the stages of a SMART goal:
S — Specific: Goals should focus on one thing at a time, such as revenue, level of customer satisfaction or other key performance indicators (KPIs).
M — Measurable: You must have some way you’ll measure the goal. For example, you might write: “I will secure 10 new customers in the first quarter.”
A — Achievable: The goal should be simple enough to achieve. While you want to challenge yourself, keep it within the realm of possibility.
R — Relevant: Consider what will help your business grow and what areas you should focus on.
T — Timely: Set a time frame. The example above focuses on the first quarter. Depending on the goal, you may need more or less time to achieve it. Be realistic about what’s possible.
Write out your solopreneur financial goals. It’s easy to focus on the million things you must do and get distracted from your initial plans.
3. Improve Your Credit Score
Solopreneurs’ financial health typically relates to their personal debt ratio and credit score. If you need a loan to grow your business, your personal debt will almost certainly be a factor.
One of the quickest ways to improve your credit score is by consolidating debt. Get a lower interest rate and payment. Pay down balances and always do so on time.
Over time, the little changes you make will improve your score, and you’ll be able to get a personal loan to finance growth if needed.
4. Find Community Connections
The life of a solopreneur can be lonely. You might feel uncertain about overcoming obstacles or need cheering on. While your family and friends love you, they don’t always get your passion for what you do and may question you if you need to vent.
Locate a mentor and connect with other business owners in your area. The local chamber of commerce is often a good source for networking and meeting like-minded new people. The more connections you make, the more opportunities you’ll find. For example, you can do a joint promotion with another brand and increase your customer base.
If you are in a rural area or run an online business, you can connect with others on social media. For example, Facebook has around 2.94 billion monthly users. Seek a group of small-business owners in your industry and join them.
5. Plan for the Worst
Many small businesses experience financial difficulties during a crisis. Perhaps a tornado sweeps through your area and damages your store. You’re left without revenue for weeks during repairs.
What happens if business suddenly drops off, another pandemic hits or you get ill? As the only person in your business, a lot of responsibility falls on your shoulders to keep things running no matter what.
Coming up with a contingency plan for most likely issues can help you respond quickly. You’ll know what you need to implement before the problem occurs.
6. Factor in Estimated Tax Payments
You’ll likely file as a sole proprietor at tax time. You have to pay taxes on the money you make and a bit more for self-employment. Most employers pay about half of your Social Security taxes in the corporate world. When you work for yourself, you’ll have to pay the entire 15.3% alone.
You’ll need to pay your estimated taxes every quarter of the year to avoid penalties and fines. Figure out what tax bracket you’re in based on IRS tax tables. These change every year, so your best resource is the IRS.gov website.
Monitor Progress to Reach Your Solopreneur Financial Goals
Solopreneurs wear many hats. They’re manager, chief financial officer, inventory control, new product development and marketing all rolled into one. Once you set current, five- or 10-year goals, take the time to check in on those objectives.
Mark a date on your calendar and see if you’re hitting KPIs or need to make adjustments. If your goals are no longer possible, take a step back and figure out how to break the objective into smaller chunks and attain the heights you want to achieve without growing discouraged. You may need a longer timeline to reach for the stars.
Ciao,
Miss Kemya
