Running a business is not for the faint of heart, and everyone says that over and over because boy is it TRUE! I’ve learned so many lessons running Studio DIY, and am still learning new ones every day. One of the most requested topics from you all is about self-employment and everything it takes to keep a business running, so today I wanted to take a moment to share 10 things I wish I knew when I started my business seven and a half years ago.
Today’s post is written in partnership with TurboTax which you’ve heard me talk about in last year’s tax season series I did. They have a product specific to my fellow self-employed, freelancing, side-hustling pals out there called TurboTax Self-Employed. You can read a bit more about it below because you better BET that more than one thing I wish I knew has to do with taxes, one of the most intimidating aspects of starting a biz! Here we go!
1. Emails Are Everything: At any point, my social media followers could be taken away from me because I don’t own them. There are only two things I really “own” in this business: my website and my email list. Emails are key because they are a direct line to your audience, that you control, and they tend to have excellent conversion rates when done right. AKA: Email addresses hold the power. Unfortunately, I didn’t think about the latter until way too far into my career and I’ve had to work twice as hard to build it over the last couple years as a result. My email following is a FRACTION of my Instagram following, but makes up the largest percentage of my product sales. Let that sink in for a minute!
2. Understand the Ins and Outs of Tax Deductions from Day 1: I learned pretty quickly that doing my taxes as a self-employed person looked a lot different than my peers who had a full-time job at a large company. And I learned the hard way that not understanding what I could or could not deduct meant a lot more money went out that door during tax season than it should have.
Having tools in your back pocket to help you understand what you can deduct is ESSENTIAL. Perhaps the most essential thing for a business. If you’re looking for help this year, TurboTax Self-Employed is able to help you find out what those deductions are for your specific industry. If you need that extra boost of confidence when you file, you can click to connect with a real CPA via one-way video with TurboTax Live Self-Employed to get all of your tax questions answered – on-demand! They’re also there to review, sign and file your return and provide personalized audit assessments to help you check for any red flags and ensure you’re following all of the IRS guidelines.
3. Names Are Forever: Ok, business names don’t have to be forever, but changing them is a huge risk. When starting a business, it’s good to start within a specific niche so you have a clear direction, but be careful about narrowing your name to only fit that niche. Case in point: Studio DIY. If I could go back, I would choose a name that didn’t have something as specific as “DIY” in it. Is it hurting my business? No, not at all. But it certainly requires a bit more explaining and work on my part when I want to branch into things that aren’t DIY now.
4. Don’t Put All Your Eggs In One Basket: Sometimes you find one really lucrative avenue of your business and it’s really hard to put your effort elsewhere, but you should. It’s never good to have all your eggs in one basket. Constantly think about how you can diversify in the long term, and incorporate action items in the short term to help you work towards that goal.
5. Value Community Over Everything: Being a business owner can be lonely, so seek out fellow business owners and nurture those relationships outside of just business talk too. And on the flip side, the community of followers (or customers) that supports you is the only reason you do what you do, don’t forget about them and ensure that you’re consistently interacting with and learning from them.
6. Have a System For Receipts: Should you ever get audited (fun fact: less than 1% of filers are audited!), you want to know where each and every receipt is for the expenses you deducted. That means, you don’t want to have to dig through your car/trash/shoe box/plastic bag in the corner of your office under that press mailer you got six months ago to find them. I can’t tell you how much anxiety I had every day about the lack of organization I had with my receipts before I got proper digital systems in place to store them.
We use QuickBooks Self-Employed to track all of our expenses and they have a system to capture receipts too, all year round. Right now for a limited time, if you file with TurboTax Self Employed, it comes with a complimentary one year subscription to QuickBooks Self-Employed that integrates with TurboTax so you basically kill two birds with one stone! Highly, highly recommend.
7. Manage Your Cash Flow Diligently: For every season where the money is flowing, there will be a season where it’s not. That’s just the way my industry works! Always remember to plan for those slow seasons and spread out and limit your expenses accordingly, even in months where you have a surplus of cash flowing in.
8. Set Monetary Goals, And Break Them Down By Month: We track all our income and expenses in detail through QuickBooks Self-Employed and I review it frequently so I’m always informed about our bottom line. But in this industry, we have a lot of cross over that happens from year to year (We are typically paid 90 days or more after we submit content to sponsors) so I wanted a simple way to achieve my goals for booking new work each year, too. So I stole this tip from a friend of mine and it’s one of the best things I did in 2018…
I looked at my past expenses and earnings in QuickBooks Self-Employed and along with my management team, set a goal for how much money I wanted to book in 2018. Then I divided it by twelve. That number was the minimum amount I needed to bring in each month in order to meet our goal for the year. I kept a simple spreadsheet where I added each job we booked in for the month and color coded when we hit, exceeded or were still working towards that goal. On the months that we hit it early, it gave me the flexibility to say no to more jobs that didn’t feel like a good fit, and on months where we were falling behind, it gave me extra motivation to hustle harder to meet it. Seems simple, I know, but we ended up meeting our annual goal in JULY (!) as a result of the motivation it gave me.
9. There Are “Yes” Seasons and “No” Seasons: …and you will constantly flow back and forth between the two. Of course, when you first start you’re in a “yes” season as you work to build your business. And eventually you’ll get the opportunity to move into a “no” season and more picky about the work you take on. But any time you want to pivot your business or start something new, that “yes” season will hit again. Don’t fear it, embrace it, and know there’s a “no” season on the other side of the hill.
10. Bigger Isn’t Always Better: Don’t let the path your business takes lead you to a life you don’t want. It’s easy to get caught up in the hustle, to want to climb the ladder like everyone else is, or even to just plain get greedy. I’ve done all three. But keep your personal goals in mind and if those align better with a smaller business, that’s not just ok, that’s exactly how things should be.
Photos by Jeff Mindell
Any lessons you’ve learned that I left out? Leave ’em below! And if you’ve just been avoiding all things tax-related because it makes you anxious, you can also take advantage of TurboTax Live Self-Employed and get a real CPA’s advice on the biggest hurdles you’re facing.
This post was created in partnership with TurboTax. All content and opinions are that of my own! Thank you for supporting the sponsors that keep the Studio DIY party going! Read more about my editorial policies here.