A practical guide to planning your income as you prepare to go full-time in your business
If you’re planning to transition from employee to entrepreneur, one of the most important steps you can take is setting a monthly revenue target. This target isn’t just about making enough to scrape by — it’s about replacing your paycheck, covering business expenses, and creating the stability you need to grow confidently.
Whether you’re months away from quitting your job or already earning from your side hustle, here’s how to calculate the revenue your business needs to generate each month to support your life and your goals.
Step 1: Know Your Personal Expenses
Before you can figure out how much your business needs to earn, you need to know how much your life costs. Add up:
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Rent or mortgage
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Utilities and internet
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Groceries
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Insurance
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Debt payments
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Transportation
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Childcare, school, or household help
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Subscriptions and discretionary spending
The result is your Owner Pay Target — the amount your business needs to pay you each month to cover your lifestyle.
The Small Business Planner includes a full worksheet to help you calculate this quickly and accurately.
Step 2: Add Business Operating Expenses
Now factor in what it costs to run your business. This might include:
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Software and subscriptions
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Website or ecommerce platform fees
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Contract labor or freelancers
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Marketing and advertising
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Office or coworking costs
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Bookkeeping, accounting, or legal services
If you’re unsure of future costs, estimate based on the business you’re building — and keep it lean at the start. Add this total to your personal pay target.
Step 3: Add Taxes and Savings
Don’t forget to plan for taxes and financial buffers. A good rule of thumb is to:
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Set aside 15–30% of income for taxes
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Build in 5–10% for savings or profit
If your combined personal and business expenses total $6,000/month, you’ll want to generate at least $7,800–$8,400/month in revenue to cover taxes and set aside money for future investments or emergencies.
The Small Business Planner includes easy formulas and allocation plans to help you get this right.
Step 4: Set Your Transition Revenue Target
Once you’ve added it all up, you’ve got your Monthly Revenue Target — the minimum amount your business needs to earn consistently before you make the leap.
Track this target over time and monitor your progress. A good benchmark before quitting your job might be:
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Hitting your revenue target 3–6 months in a row
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Having a pipeline of future clients or sales
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Building a runway of at least 3 months’ personal savings
This tells you you’re not just having a good month — you’ve built a replicable system.
Step 5: Reverse Engineer Your Sales Goals
Now break down your revenue target into:
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Number of clients or product sales needed
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Average order value or pricing needed
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Weekly or daily sales targets
If your monthly target is $8,000 and your average client pays $1,000, you need 8 clients/month — or 2 per week. That level of clarity helps you plan marketing, outreach, and delivery more intentionally.
Final Takeaway
You don’t need to guess when it’s time to go full-time in your business. With the right revenue targets and a clear plan to hit them, your transition can be a strategic step — not a scary leap.
The Small Business Planner gives you the tools to set your revenue goals, map your expenses, and create a paycheck from your business with confidence.
Explore The Small Business Planner now → https://smallbusinessplanner.com/products/planner