I’ve been thinking a lot about my ever-evolving career, and wanted to share some of the biggest financial lessons I’ve learned along the way. I’ve been talking a lot about finances this month, and though I’ve mostly covered personal finances, I’ve learned a thing or two related to money on my journey through entrepreneurship.
Entrepreneurship Is Not All It’s Cracked Up to Be
There are so many things about being your own boss that people who push entrepreneur culture don’t talk about as they drive their Teslas. I do NOT believe that everyone should be an entrepreneur. Can anyone be an entrepreneur? Yes – because it just takes a combination of grit, research, experience, and luck. But there are so many hidden costs — financial, emotional, physical — that make it extremely difficult. Financially though, entrepreneurship is EXPENSIVE. Since I am loan and debt-averse, I have bootstrapped both my blogging business and non-profit organization from top to bottom.
If You’re Self-Employed, Stay On Top of Your Taxes Year-Round
I will never forget the first time I filed self-employed taxes. I’ve always done my taxes on my own and was really excited for my refund, and I had already plotted how I was going to spend it. Lo and behold, I owed nearly $8,000 in taxes because I didn’t have any withholding and hadn’t paid quarterly estimated taxes! That was a rude awakening but luckily I was able to pull it together and find the money, however now I am incredibly serious about staying on top of my taxes. Each month, or at least each quarter, I go through my income and expenses, and categorize them in my accounting software (I use Quickbooks for business), and then pay my estimated quarterly taxes so I don’t have any penalties or surprises come April 15th.
Don’t Spend Money You Don’t Have
The worst part of that tax story is that I had JUST bought 2 really expensive and unnecessary items on an extravagant Parisian shopping spree. Now, I only buy or invest in new things after I have reviewed my estimated tax payment for that quarter, and either paid it early or ensured that I would have enough money to pay for it. For example, before I did my site rebrand last fall, I paid my Q2 estimated taxes to see how much money I really had available. I’m currently itching for a new bag (trying to decide between this one and this one), but I won’t buy anything until I’ve settled all our taxes to make sure I don’t owe anything else (and hopefully we’ll get a refund!).
Hire People Based on Values & Skills, Not Personality or Affordability
Through both of my businesses, I currently oversee six different independent contractors, and in the past year, I’ve been mostly successful with finding the right people. Whenever things haven’t worked out, it’s been because I brought people on because of their personality, or because they were more affordable than other people. But I’ve come to learn that just because people can do something, doesn’t mean they are the right person to do that work. And a bubbly personality or good deal can’t replace dependability and attention to detail. Hiring people who share similar values, both individually and in terms of the business, has been essential to my business success, even if it costs a bit extra. Everyone on the Safe Journey Media team (aka the people who keep the blog and social platforms running) fully believes in the vision and impact of the work, which keeps everything in sync.
Give Back to Your Clients
In the traditional corporate world, companies send gifts and flowers to their clients as a token of appreciation. It’s a small but impactful way to say, thank you for your business and support. Every year I set aside a portion of my income to use as “gifts” for my audience because I believe in blessing those who bless me. It’s an extension of a greater life principle I have, which comes from Proverbs 11:25 “the one who blesses others is abundantly blessed.”
You’ve Got to Spend Money to Make Money
I’ve talked about the investments I’ve made in my blog before, but in any business, you have to spend money to make money. Whether it’s money spent on learning new skills to edge out your competitors, money spent to market to your customers, or money spent on people who help the business run more smoothly, wise business investments can lead to more profit. In 2020 I added 3 people to my team and had an agent who took 20% of my campaign earnings, but still earned 45% more than I did in 2019.
Not All Money is Good Money
Lastly, integrity is more important than profit, so not all money is good money. I use a combination of research and intuition to decide which projects to work on and what brands to collaborate with. Going back to ensuring that values are aligned with those you work with — that extends to my collaborators as well. And without fail, every time I have second thoughts about a project and say yes anyway, it turns out being the biggest headache! I’ve recently adopted this mantra for how I decide which projects to take on, and so far it’s been working well for me: “If it’s not an immediate yes, it’s a no.”