Decide how much income you want, where it should come from and what work remains behind it.
Module 1: Ownership Goals · Milestone 2 of 27
Stepping out of daily operations changes more than your calendar. If much of your income pays you to run the company, someone else may need to be paid to carry that responsibility. The business must support that cost alongside the income you want to keep.
Milestone 2 puts those choices into an income plan: what reaches you today, what you want in each of the next five years, and the assumptions behind each source. You can keep operating work you enjoy. Your income plan should describe the same role as your time plan.
Separate business results from personal income
Revenue is what the company sells. Profit reflects its income and expenses. Cash also depends on when customers pay, inventory, equipment, debt and other commitments. A profitable company can still have little cash available to distribute.
Your personal income plan starts with what actually reaches you and why:
| Source | What to make clear |
|---|---|
| Compensation for work | What role you perform, what you are actually paid and what a replacement might cost. Paid board responsibilities are still work. |
| Ownership distributions | Cash received because you own the business, with its tax treatment and funding assumptions explained. |
| Other income | Income from other investments, property or work, with the source and effort required identified. |
Money retained in the company is not personal income. Borrowing, returning loan principal and selling an asset also need their own treatment; they aren’t automatically recurring earnings. If the company repays an owner loan, distinguish principal from interest and count the receipt once.
Use a comparable annual after-tax basis when planning what supports your life. Preserve original gross amounts and show the calculation. Gross salary plus after-tax distributions does not equal after-tax spending money. The Scorecard’s printed “W-2 Salary” label identifies its compensation row; use the appropriate treatment for your situation.
Connect the income target to the role you want
Suppose you want to reduce your operating work next year while maintaining the same total personal income. A leader taking on your responsibilities may need additional pay, support and authority. The company must fund the handoff before you can assume higher distributions will replace lower compensation.
Record the intended role, timing and cost. Then identify what needs testing in the business plan. This hypothetical plan can be useful before the company has proved it can fund every target. Keeping salary or the income mix steady can also make sense when the responsibilities and evidence support it.
The goal is a plan you can explain and investigate. Reaching the future income target is later work.
Build the income plan in five steps
- Establish Current. Gather a dated period of actual income, separated by source. Identify estimates, missing records and the tax basis.
- Choose five annual targets. Name the calendar or fiscal year for each column. Connect the amounts to your personal needs and planned saving.
- Explain the sources. Put your time and role plan beside the income plan. Identify responsibility changes, replacement costs and distribution assumptions.
- Reconcile the totals. Make source amounts add to each annual total. Keep the original amounts and any tax conversion traceable.
- Hold a real review. Compare the starting position with your intended plan, record what it implies and decide the next action. Set the next monthly review.
Current remains in your dated supporting record. The Scorecard’s five columns hold Years 1–5 targets. A blank amount stays unknown unless you have established that it is zero or not applicable.
Use the tools that support the work
The Owner’s Scorecard™ holds the chosen annual targets. The supporting tools develop and explain them:
| Tool | How it helps |
|---|---|
| Cash Flow Target Worksheet | Establishes your current income, annual goals, sources, assumptions and review. This is the main supporting exercise. |
| Income Source Map | Makes dependencies visible when several income sources, companies or roles make the plan difficult to follow. |
| Five-Year Cash Flow Plan | Organizes the changing annual income mix when you need more detail behind the Scorecard. |
| Existing household cash forecast | Shows monthly timing and personal commitments when annual totals alone don’t explain the cash you need. |
Use suitable records you already maintain. The Member program includes the working exercises and lessons. You don’t need three additional worksheets when one clear record establishes the required work. Keep personal spending details in your personal records and share the business implications needed for company decisions.
What completion requires
A completed plan includes a review and follow-through. These five requirements describe the result, rather than five separate documents you must create.
Open the five completion requirements
- Establish current income by source. Record the period, sources, classifications, actual amounts and total. Distinguish actual compensation from an estimated replacement-role cost. Explain the tax basis and any conversion; identify estimates and the source of missing information. Another person should be able to follow the baseline. A material unknown remains open until it is usable.
- Set annual targets for Years 1–5. Give every named year a specific total and source breakdown on an explained basis, connected to your personal needs. A flat target is valid. Keep Current separate. Desired income does not establish the company’s capacity to fund it.
- Connect income to your intended role. Make Time and Cash Flow describe the same responsibilities and timing. Explain changes in compensation, who would carry the work and relevant replacement costs. An unchanged mix can be supported. Identify distribution capacity and other business assumptions still to test.
- Reconcile the Cash Flow section. Make sources add to Current and every annual target, with a clear tax basis and supporting calculations. Keep retained company cash separate. Mark zeros or non-applicable items deliberately, and resolve or explain conflicts with an existing model. Keep unresolved business questions visible.
- Review the plan and record what happens next. Hold a dated review using the current baseline and intended plan. In later reviews, compare actual income with the original plan for that period. Record the period, evidence, gap, conclusion and supported next step or reason to continue, with the responsible person where needed and the next monthly review. A future meeting invitation alone doesn’t complete this requirement. Don’t invent a historical target to create a comparison.
Review the 0–3 score and evidence test
0 (Not Started). You haven’t established personal cash flow targets or worked through the core ideas in this milestone. There is no documented income plan to review.
1 (Learning). You’ve worked through the three teaching lessons, or can demonstrate equivalent understanding. You can explain the different income sources and how your intended role, business investment and timeline affect the plan. You haven’t yet started a substantive written plan.
2 (In Progress). You’ve started substantive work on the income baseline, annual targets or assumptions. One or more checklist requirements remain incomplete, or the plan is prepared but hasn’t yet been reviewed against your current position to decide what happens next.
3 (Installed). All five checklist requirements are complete. Your Scorecard and linked supporting record show a usable current-income baseline and specific annual targets for Years 1–5, separated by source and reconciled on an explained basis. The income plan connects to your intended role, with assumptions and unresolved business questions identified. You’ve reviewed it against current evidence, recorded a supported next action or a reason to continue and set the next monthly review. The goals are in use; the future income target does not have to be achieved, and the complete business financial model can be built later.
Verify the evidence: open your Scorecard, baseline, assumptions and latest review note. Show the annual targets and sources, their connection to your intended role, questions still to test and the decision from your review. Someone else should be able to follow the work without relying on your memory.
You choose your score. Keep an AI, peer or coach’s assessment separate, with its evidence and reasons. Suitable existing work counts. Evidence you haven’t examined is unreviewed; a checklist percentage doesn’t calculate the score.
Review income monthly and the whole plan quarterly
Compare actual income with the plan for the same period and on the same basis. Explain timing differences and shortfalls before changing the longer target. Keep the original plan when you prepare a revised forecast.
Review Time, Cash Flow and Wealth together quarterly, and refresh the full plan annually. Your own review counts before a formal ownership meeting is established. Choose follow-through alongside the priorities already in your 90-Day Game Plan.
Milestone 3: Net Worth and Valuation Targets connects today’s income and planned saving to the wealth you want to build. Module 4: Sustainable Financials develops the financial work that tests what the company can support.
Explore the idea further
- Solving for Current Cash Flow vs. Long-Term Business Value Creation, episode 306. Ali Nasser examines the competing uses of cash: personal income, reinvestment and wealth outside the company.
- Rob Dube’s ownership story, episode 437. A conversation about a new CEO, continuing ownership income and reinvestment while stepping out of operations.
- Cash Conversion Cycle · Capital Allocator · The Owner-Operator Trap™
Choose your next step
Start the work. Use the same Scorecard for all three Ownership Goals milestones. Keep your dated starting position and supporting work with it.
Download the Owner’s Scorecard
Review the wider picture. The Ownership Assessment helps you consider this milestone alongside the other ownership capabilities, identify evidence still to review and choose useful work. Start the Ownership Assessment.
Work through it with support. The 90-Day Boardroom Blueprint connects your ownership direction, numbers and decisions in your first usable Owner’s Playbook. You can explore the program directly when you’re ready for guided work. Explore the Boardroom Blueprint.
← Milestone 1: Time and Role Goals · Milestone 3: Net Worth and Valuation →