As 2013 winds down, I have been thinking a lot about 2014. In the middle of setting personal goals, I have been also thinking about business goals as well. I have found that I have a much higher income when I set a goal and work towards it throughout the year. But you shouldn’t just pick a number out of the sky and try to achieve it. Since you are going to live and breathe this number for the next 12 months, you should take time to carefully determine the amount of income you need to earn and what is realistic.

Here are five questions to ask when determining your income goal:

1. How much did you earn in 2013? Determine how much you made last year and use that as a starting point. If you are not sure of your 2013 income, then your first step is to calculate your earnings and create a tracking system for the future. You can’t reach your goal if you don’t know how much you have made at any given point during the year. This is a good starting point for determining your 2014 goal.

2. Is there an amount of income that you need to earn in 2014? Look at your budget and your bills. Determine how much you must make to take care of your family. Think about any upcoming expenses as well, such as your son’s orthodontist, saving for college or your daughter’s wedding.

3. Are you new to content marketing writing? Did your earnings per month or per hour rate increase in the second part of the year? Look at your monthly income for 2013 and see if it was increasing each month. If it was, then you should feel more comfortable setting a higher goal. If you are transitioning into content marketing this year and don’t have a lot of experience or are working on defining a niche, you will definitely want to take this into account when setting your goals since earnings may be slower at first than you would like.

4. How many hours do you want to work each week? How much vacation time do you want to take? Some freelancer writers don’t work a full forty hours while others work much more than full-time. Write down how many hours you want to work each week and how many weeks you want to take vacation.

5. How many billable hours do you have each week? The number of hours that you work each week is not the same as your billable hours. Marketing time is not billable. Time spent reading up on content strategy is not billable. Invoicing and tracking your income is not billable time. Writers who don’t bill by the hour sometimes think billable hours aren’t important, but knowing how many hours you are actively producing income is essential to setting a realistic goal.

Using this Information to Set Your Income Goal

Once you have carefully thought of all of these factors, the next step is using this information to create your income goal. Multiply your billable hours by your target hourly rate and you will have an estimate of how much you can earn each week. Then multiply this number by the number of weeks that you want to work this year.

Once you have a reached a starting dollar amount, the next step is to increase or decrease your goal based on your answers to the five questions. Compare your number to your earnings last year as well as the amount you must make to meet your financial goals. Then take into account whether your earnings at the end of the year were on the rise or the decline. You should also consider any upcoming life changes that you have, such as a pregnancy, a move, or taking care of aging parents.

How I Set My 2014 Income Goal

I come from a family where you don’t talk about money, but I decided to share my own income goal setting process to help you set your own goals. In 2013, I worked about 25-30 hours each week and earned about $60,000. My income was on the rise the second half of the year and I have several high paying clients in the works. Since I am now taking care of my mother-in-law and my kids are now involved in more activities, I would like to try to work less hours this year (20 to 25 max) with as little weekend work as possible. I also want to take six weeks off each year where I work as little as possible. Since learning about content marketing strategy and writing this blog are non-billable tasks, I probably have 13-15 billable hours each week. My target hourly rate is currently $100, but would like to move that to $125.

I then multiplied 13 (billable hours) by $100 (my target rate) and got $1300 income each week. I then multiplied 1300 by 48 (the number of weeks I want to work) and ended up with a $62,400. When I use my goal rate of $125, I end up with $78,000. Taking into account my new clients waiting in the wings along with my desire to work less hours, I decided to set my goal at $70,000 with a stretch goal of $75,000.

This week as you are taking down your tree and getting started on your New Years resolutions, take a few minutes to set your income goals. I promise you that you will be glad you did.

How do you set your income goal? What factors do you take into account? What benefits have you found to setting an income goal?