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From Side Hustle to Full-Time - How to Determine the Income Needed to Succeed as an Online Service Provider
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Episode 22 - From Side Hustle to Full-Time - How to Determine the Income Needed to Succeed as an Online Service Provider
To determine the income needed to make your new side hustle or full-time online service provider business a reality, you should consider the following steps and factors:
- Determine your monthly living expenses, including rent/mortgage, utilities, food, transportation, insurance, debt payments, etc. This is your baseline MVI to cover your personal costs.
- Factor in any additional expenses specific to running your online business, such as software, equipment, marketing, etc. Add this to your personal MVI.
- Consider your desired income level to achieve your financial goals, whether that's a comfortable side income or a full-time salary. This is your target MVI.
Estimating Your Earning Potential
- Research the typical rates and pricing models for the online services you plan to offer. Look at competitors and industry benchmarks.
- Estimate how many billable hours per week you can realistically dedicate to client work based on your other commitments.
- Calculate your potential monthly revenue by multiplying your hourly rate by your estimated weekly billable hours.
Accounting for Expenses and Taxes
- Factor in any business expenses like software, equipment, insurance, etc. that will cut into your revenue.
- Estimate your self-employment tax liability, which is typically 15.3% of your net income.
- Determine how much you'll need to set aside for quarterly estimated tax payments.
Determining Your Pricing and Sales Goals
- Set your hourly rate or service package prices to achieve your target MVI, factoring in your expenses and desired profit margin.
- Estimate how many clients or projects you'll need to book per month to reach your revenue goals.
- Consider offering tiered service packages or add-ons to increase your earning potential.
By carefully calculating your MVI, estimating your earning potential, and setting appropriate pricing and sales goals, you can determine the income needed to make your online service provider business a success, whether as a side hustle or full-time venture.
https://www.reddit.com/r/msp/comments/101n08p/interested_in_starting_a_msp_first_steps_eventual/
https://www.linkedin.com/pulse/how-start-podcast-like-we-launch-startup-paul-o-brien/
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