Finance Tips for the Self-Employed

Entrepreneurship has been romanticized throughout all channels of social media. Highlights of being self-employed, team wins, and the perks of perceived freedom are what’s most discussed. While we love the positives of being your own boss; what are some of the things that should be considered before jumping into full-time entrepreneurship? What key items do you wish you knew prior to your self-employed journey? Whether you’re a newbie or long-timer, check out these tips to help elevate your business.

Create and maintain a healthy schedule

How many times have you found yourself working into the wee hours of the morning? While we all understand (and have fallen victim to) the “get it done by any means” mantra – to be the best at what you do and to be alive to reap the benefits – a schedule is essential. If you had a 9-5 in the past, maybe a traditional 8-hour workday resonates with you. Depending on the workload, some days might call for 10- or 12-hour days. No matter what it is, make sure you do have the opportunity and freedom to take care of yourself, your mental health and those that matter to you.

There are a lot of useful ways to plan and map out your workdays. Time blocking is a technique that’s used to assign a designated time during the day to a specific task. In this way, you’re able to work on multiple deliverables without spending too much (or too little) time on assignments. While it takes some practice and dedication it’s worth testing the waters – you and your business will be glad you did.

While this may seem like a no-brainer, take time to rest and find moments of solace throughout the day. No one can continue to operate at a high frequency without proper unplugging. Taking business calls or responding to clients in the middle of the night may seem productive, but it’s not progressive. Try your best to work within the time limits that you have set for yourself. We know that there are 24 hours in a day, but they’re not meant to be solely dedicated to work. Help yourself and take mental breaks to run errands, decompress and spend time with your loved ones.

Since you are the captain of your ship, feel free to create a schedule that is most productive for you and your lifestyle. Include gym/exercise time, necessary lunch breaks and step away from the computer. Please don’t forget to nourish yourself throughout the workday! Food serves as our fuel and without it our work does indeed suffer.

Manage your money wisely

Being your own boss means one months’ profit can be through the roof and the following month can be utterly disappointing. To weather the storm, creating a money plan and budget will be a saving grace for your livelihood. Create a budget that includes all personal expenses and be as descriptive as possible. Make sure to dedicate a percentage to savings as well. If vacations or any major purchases are on the horizon – create accounts (and plans) for these savings goals too.

Running a business means there’s one guaranteed expense – things to help make sure you stay in business. Account for business related expenses that fall in any of these categories:

• Advertising & Marketing
  • Online paid ads, physical copy products and public relation expenses are just a few examples. Marketing strategies can increase, and decrease based on the time of year and when your business is most profitable – take seasonality into account. 
• Legal counsel
  • It’s always handy to have legal representation on standby to review contracts or resolve any disputes.
• Office space
  • If you have a physical location or a co-working space, remember to make sure that’s accounted for in your budget.
• Employee compensation
  • Whether it’s a W-2 employee or someone on a 1099, don’t forget to allocate funds to those that contribute to your business and its’ growth.
• Transportation
  • In the instance driving is a major player for your business, set aside funds for fuel and maintenance of any vehicles.
• Travel and entertainment|
  • Maintain a record of all things related to travel as these items and others can be helpful when filing taxes.
• Taxes
  • Since you are your own boss, it’s best to pay taxes in installments throughout the year. Quarterly tax payments are much easier to stomach than cutting a large check to the IRS in the spring. Save yourself the hassle and stress!

Create systems to enhance your business and productivity

If you haven’t already learned, systems will be your best friend not only in business but also in life. Streamlining assignments, deliverables and all work-related tasks set a healthy management precedent. Just because you’re self-employed it doesn’t mean that you want to always be tied to your work. What happens when you must take time away from your business? How will you be able to generate revenue and ensure business flows as usual. Using systems to hold yourself and everyone involved will always serve as a peace of mind.

Commit to being a lifelong learner

Don’t be afraid to adopt new practices and ideals on this entrepreneurial journey. Time serves as the best teacher; developmental learning is always a priority. You will quickly learn what may have been very effective in one season of business is no longer that effective. Be open to change and pivot when necessary. If there’s a skill that is essential to your business, be sure to invest in yourself and those that contribute to the success of your business. While many of us focus on the financial wins in business, it’s equally important to recognize the qualitative victories. The day you stop learning is the day your business is it at its’ optimal performance – never underestimate the power of investing in you.