7 Things One Year of Business Ownership Has Taught Me

If there’s one thing I am, I’m honest. Sometimes to a fault. If you want honest feedback on how a pair of pants fit, I’m not the person who will tell you that they fit great, skirting the point that they’re baggy in the butt and too tight around the waist. I’ll tell you to change.

I don’t think I was always like this. But for the last almost 1.5 decades, critiquing has just been an essential part of my line of work. I’ve learned to take it, and give it honestly, just the same. In critiques, the point isn’t to criticize the person or project or design. It’s to give good, intelligent feedback so they can make it better.

And like feedback for improvement, I also like to openly share my experiences. I don’t really feel they’re unique, but talking honesty about them may help someone in the same situation learn something new about theirs and make it better.

So here we are ONE YEAR after officially starting my business -albeit a side-hustle at the time - and I thought I’d share the top things that this last 365 days has taught me. It’s mainly so that others who have just started theirs, or are still just thinking about starting a business, can maybe learn from my mistakes and from my achievements.

1. Just start.

This is my first bullet because this is a motto I learned and I tell everyone who will listen. If you do not start, sure, you have nothing to lose. BUT if you do not start, you also have nothing to gain. So, just start. This time last year I still had the one friend I was doing a little logo work for here and there, but no “clients”. And I still wasn’t registered with the govt. (see below), BUT I consider this my anniversary date because this was the month I finally just started.

I took some cash I had saved (no debt in this business), and purchased my first year of website hosting and domain name with Squarespace, and started just writing up a list of tasks I could make a part of my business. Now I only do a handful of what I originally wrote, BUT that list got my juices flowing and helped me to continue to pull together my website. If I hadn’t just started, I’d still be without business, no Instagram, and no clients.

No cash saved? Ok, well work what little side hustle you can to start saving up, or you can get a free website, or even just a Facebook page. But excuses aren’t going to get you anywhere.

2. Getting legit is great, but paying taxes sucks.

It’s probably the sh*ttiest part of owning a business, but becoming a legal entity with your state not only makes you sound more professional (hello, LLC!) but protects your personal assets from your business assets in the event that god forbid you go bankrupt or get sued. The sucky part is that you gotta make sure you continue to put a portion of your revenue away for taxes. Of course, whether you register or not you still need to pay taxes, so make sure you plan accordingly.

My accountant (not necessary if you’re good with your books and organization, and you’re the only one getting paid), said to put away close to 50% just to be safe. It’s my first year, and since thankfully we’re not too dependent on my income, so it’s easy to do. But keep that in mind when you’re pricing a service or a product - close to half of what you pay yourself will need to go to taxes!

3. Have a few key systems in place before you get too busy.

I created a blog post a while ago with a list of tasks you should have in place before you get started, and I pretty much still stand by it. Wish I had them a little more cemented, and more of these in place before I started, but like my first bullet says, “just start”. So I did, and don’t regret it.

4. Get well organized.

I’m a really organized person. But for some reason, I didn’t really have a plan for how I was going to organize, save, and share back my client’s work. Once it started coming, I kinda just put it on my computer, and sometimes on my Gdrive too, but nothing was, and kinda still isn’t, consistent. Like my systems, I wish I had planned this out before getting too deep with too many clients, and now I need to go back and reorganize.

5. Really think about how much work you can take on.

Granted, I had 2 little kids when I started my side-hustle, while working a full-time job, and then baby #3 joined us pretty early on in my business venture, however, I did plan for how many hours I could take on each week (“Ok, so I can work evenings, when the kids are asleep, during naptime, and weekends…”) However, things don’t always go as planned. So with a baby who didn’t nap well, me being too exhausted to work too late, and at the same exact time Brooks was born, my husband’s workload increased substantially, I wasn’t pulling the hours I thought I would.

Thankfully, I didn’t have clients knocking down my door. I managed with what I had, and at a point, decided not to take on anymore new ones. But even today, I don’t work the hours I once thought I’d be able to - that is, not yet. As soon as this 6 month old starts dosing off for longer stretches I may be able to fit some more time in.

6. As long as you’re productive, it doesn’t matter how nice your office or your hardware is.

If you follow me on Instagram, you probably know my laptop is failing. I’ve been using it for as long as I can, but when it restarts itself during a video conference with a client, you kinda give it the last straw. You may also know my office is far from Pinterest worthy… BUT you know what? Besides a conference call delay, I’ve been able to get all the tasks I need to get done without problem. Sure, I may not have as many likes when I post a picture of my free IKEA desk I scored on Facebook, and it’s certainly not getting any re-shares, but I’m also making the same amount of money, and not spending it on new stuff for my office… yet. I do have plans to invest a little, but I’ll be using my husband’s old laptop (new to me) once I save everything over, and I’ll be painting and decorating myself.

7. Do what’s right for you and your business.

Let me say it this way:

Name the top 3 closest grocery stores to your home. For me, it’s a Klein’s Shop Rite, a Safeway, and another Klein’s Shop Rite. But you know what? Today, I drove all the way to Aldi’s Grocery because they’re WAY cheaper, and have just as good produce as anywhere else. (WAY cheaper meaning my grocery bill is only 2/3 what it was, even with Walmart, and most of which is healthy veggies!)

“OK, so what?”, you say. “They’re a cheaper grocery store.” Yeah, but do you know how they get their prices so much cheaper? 90% of their products are Aldi branded but meet big brand standards, they have a cart “rental” system so they don’t need to hire someone to continue to collect carts, and encourage customers to bring their own bags by charging for their paper or plastic bags, all of which create savings that are then passed onto the customer.

My point? They are running a grocery store - one of the most common and long-time businesses there is. BUT they’re doing it differently, and the customers notice!

There are tons of others out there doing services or selling products that are similar to yours. Trust me, I’m right there with you. Figure out what sets you apart, and what’s right for your business, and of course makes you happy. However, I’m pretty sure if it makes your customer’s happy, it’ll make you happy too

For me, it’s that I have a strong love for branding, but I have the long-term professional experience to back it up. Not many can say that. So sure, I can do graphics, and social media, and websites, but I understand how to make it cohesive, and how to incorporate and strengthen your brand. How many can say they worked with well known brands for 13 years?

I hope this information has taught you something, or if anything given you a heads of of some things you might encounter on your first year of business. Have you started yet? Or are you in your first year? Let me know in the comments or shoot me an email - I’d love to hear and respond to you.

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How To Go Full-Time With A Side-Hustle

A majority of small business owners will tell you their business first started as a small side hustle, or maybe even just a hobby at the beginning. They enjoyed doing X, Y, and Z for others, made a decent income from it or knew they could, and decided the idea of freedom from being an employee for someone else sound like a great idea. But what they don’t explain is how to make that jump - from hobby to full-time. It’s a piece of the story that many, like me, wanted to hear from those who had done it successfully. I figured the more I knew, the less risk there would be, and I wanted to be as prepared as I could to avoid failure. 

Over 50% of small businesses fail in the first four years. And not surprisingly, 82% off those that fail do so because of cash-flow problems (source). If you can’t stay in the green, it’s not going to work out. And I certainly did not want to spend time working hard and apply myself, and have all that time and effort to go to waste. So I took my time, planned it out, and although I’m only 9 months into my “side hustle”, I’d say so far I’ve been successful.

All my preparation, planning, and full transition are still fresh in my mind, and I’m able to take a wider look back with better perspective to give you insight in how to go full time.

Just Start

It’s simple. Like NIKE, "Just Do It.” You can talk all you want about becoming a legit business, but talking isn’t going to help you get there. My biggest piece of advice for any one who wants to start their own business it to just start. Start by getting a free website. Start by finding your first clients or customers - maybe they’re family or friends. Start by making your first product to sell on Etsy. If you don’t start, you’re no better off than you were yesterday.

Get Official

Whether you want to be an LLC or S-Corp (do some research on what’s best for you), you gotta get official with the government. Not only do you need to for tax purposes but it tells your clients and customers your professional. The process is pretty easy. I just Googled “Register A Business In Maryland” (where I reside) and found a Maryland government website that is for exactly that. There’s some small fees, but the process is pretty simple and all said and done was under $200, which includes your EIN number. You’ll need this to pay taxes.

Sure, maybe your Aunt Mildred knits gloves and only sells a few pairs at a Christmas Craft Fair, and doesn’t officially have to register as an actual business because she makes a such a small income on those few pairs each season. But you know what? She still has to pay the IRS taxes on any income she makes. Yes, there are plenty of people that run their self-made businesses off the books and don’t pay taxes, but it’s illegal, and it can catch up with you. Before you start bringing in the income, get legit.

Don’t Quit Your Day Job

It’s a very romantic notion to just pick up and quit your cushy full-time job and focus full time into your passion, with the goal of achieving greatness doing what you love. But it’s not realistic. There’s bills to be paid. And if you’re like me, a family to help support. You can’t tell what the future will hold, and starting from scratch before you’re bringing in cash from your new venture is a big gamble. Unless you have a large savings cushion it’s just not wise. And even then, why would you want to chance having to tap into your savings when there’s a smarter, safer way?

First piece of advice - keep your side-hustle just that, a side-hustle. A very busy, hard-working side-hustle. Work as much as you can in your “free-time”. Make that money in the evenings, weekends, and even lunchtime! Ask any small business owner and they’ll tell you that starting a business is hard work and take a lot of time. By keeping your day job you’ll still be bringing in a steady paycheck and making extra cash in your “free-time”. Work until your new business is doing so well that you’re over-loaded. Even then, it may be wise to hire help from a few employees before actually quitting your day-job and going full-time.

Do The Calculations

When it comes down to it, it’s all about the numbers.

So you’ve been doing this side hustle thing for a while, you’re “free time” hours are completely filled up with client work or production on products. You’re bringing in the cash and your business bank account is filling up. Now what? Get a piece of paper and your calculator out, and start running the numbers. 

First, calculate how much you need to pay yourself to live the way you want to live. Maybe you don’t want to quit your day job until you side-hustle is bringing in the same amount, or maybe you’re able to take a little hit, and live on a tighter budget as long as you’re doing what you love. Make sure you take all your existing benefits into account (i.e. health, 401k, etc.) and plan ahead! If you’re lucky, maybe you can switch to your spouses insurance instead. Unfortunately, my health insurance was with my previous day-job, and my husband owns his own business too, so we had to get private health insurance - and it’s not cheap!

Also, just because you’re able to make say, $6000 in net revenue or net sales, doesn’t mean that’s how much you get to pay yourself. After you account for all your business expenses (supplies, bills, etc.), taxes (my accountant has suggested to save 50% to be safe), plus any you want to continue to invest back in your business, you’re left with net profit or net income. That’s how much you can pay yourself.

Yep - that’s the downfall of small business ownership. It’s expensive to own a business. But when you charge the right amount, and when it’s calculated and budgeted right, you can grow, invest back in your company, and get to reap the benefits of small business ownership.

Make The Jump

So you know how much you need to make, you’re pulling the money, everything’s going great, but you just don’t have enough hours in the day to grow. So now what?

It’s time to make the jump to full-time small business ownership!

First, it’s probably a good idea to have a cushion on money in you bank account, just in case your 40-hours a week doesn’t quite fill up - with client hours, or products selling - right away. And if you can book those hours in advance, or have sales prior to making them, that’s great too!

Now it’s time to put in your 2-week notice with your job, schedule your new health insurance starting, and get to work! It’s scary, but one of the best things you can do is talk to someone who’s been successful in doing it. Not only will they be able to help you with any questions you may have, but knowing they’re been successful in making the jump should give you motivation to do it too.

So, are you just thinking about starting a side hustle? Are you considering making the jump to full-time soon, or have you done it successfully? Share your story in the comments! The more small business owners help other small business owners, the more chance we can all become successful!