Setting Financial Goals: Revenue Targets, Profit Goals, and Personal Income Targets

"I want my business to make more money" isn't a goal. It's a direction. Real goals are specific: "I want $60,000 revenue and $20,000 profit" or "I want $40,000 personal income." This guide teaches you how to set financial goals that are ambitious but realistic.

Three Types of Financial Goals

Most handmade makers mix these up. Let's define each:

Goal 1: Revenue (Top Line)

Total money coming in. "I want $100,000 in annual revenue." This is gross income before expenses.

Goal 2: Profit (Bottom Line)

Revenue minus ALL expenses. "I want $30,000 annual profit." This is what you actually keep.

Goal 3: Personal Income (What You Pay Yourself)

"I want to pay myself $40,000/year." This is your salary, drawn from profit.

Key insight: $100K revenue with 60% COGS and 20% overhead = only $20K profit. You can't pay yourself more than profit.

How to Set Your Target Goals

Step 1: How Much Do You Need to Live On?

This is your minimum personal income goal. Calculate:

Monthly expenses: $3,000 × 12 = $36,000/year needed

Add 20% tax buffer: $36,000 × 1.2 = $43,200

Personal income goal: $43,200

Step 2: Profit Needs (Beyond Personal Income)

Profit is reinvested or saved. How much do you need for equipment, emergencies, growth?

Personal income goal: $43,200 + Profit cushion: $10,000 = Required profit: $53,200

Step 3: Calculate Required Revenue

Work backward from profit using your expected profit margin:

Profit goal: $53,200 (50% margin)

Revenue needed: $53,200 ÷ 0.50 = $106,400

If you had 40% margin: $53,200 ÷ 0.40 = $133,000

Writing Your Financial Goals

Write them down. Specifically:

"By end of 2025, I will achieve:

• Annual revenue: $120,000

• Annual profit: $50,000

• Personal income drawn: $45,000

• Profit reinvested in: New equipment ($3,000), emergency fund ($2,000)"

Review quarterly. Are you on track? Adjust if needed.

Goals Without Numbers Are Just Dreams

TrueCraft helps you track actual revenue, profit, and personal income against your goals.

Start Your Free Trial