I feel the above picture accurately represents what it feels like to get a paycheck as a self-employed person.
Pure JOY! Also coupled with wanting to fall down crying because by gawd you'll live to fight another day.
Today is particularly joyous for me because I haven't gotten a paycheck in 3 pay cycles (I pay myself twice per month....when there are funds...)
It's a GIANT freaking raw of sunlight in this dismal willnotend winter.
This year, 2019, I began running both of my businesses - High Spirits Dog Training, established in 2014 and full-time since 2017, and Danielle Lindblom Coaching, established 2018 - as actual businesses. What I mean by that is ACCOUNTING.
After attending a pretty awesome Rising Tide (Tuesday's Together) meetup in January, I was introduced to the concept described in the book, "Profit First." It. Changed. Everything.
I had been riding the peaks and valleys of my businesses for two long years. I think it's called being a human.
When times were slow, I would tighten the belt, scrimp, pinch, scrape, and generally be miserable as I waited for things to pick up. When they did, and I hit a good month, I'd be rollin' in it yo. Dolla dolla bills!! I'd promptly spend it all because it felt SO GOOD to finally have money again.
Well, guess what that particular system did NOT do well? Umm, yeah. I didn't save anything, so when another slow time hit I'd be repeating my cycle all over again.
With Profit First (and to be clear here, I am in no way endorsing or gaining anything from saying I like this book/method. you know that I only share here what I like. Nobody can buy me!!!!!! (gives William Wallace-like freedom scream)), I get to control my money and secure my future. And also give insane pleasure to my analytical engineer brain. Like seriously, I freaking love the two times each month when I get to do my accounting. Nerds unite!
I want to do two things with this blog post: first, I want to let you know about Profit First in the event you're a small biz owner of any kind and second, to let those who do not run small businesses (those who very smartly work for someone else and receive a reliable, steady source of income and job stability) get a glimpse of what it's like to be in these shoes. We should all treat small biz owners with kindness and empathy. They fuel our community's economy! #shoplocal
Ok, off that particular pedestal.
So, here's a quick snapshot of Profit First. (don't worry - it's NOT boring)
OK, so, instead of spending all of the money YOUR BUSINESS makes, you instead portion out your revenue into multiple bank accounts (dave ramsey envelope system anyone?) and only spend from each category. One of those accounts is your salary.
And guess what?
Small business owners only get about 50% of the money you pay them to use for themselves.
Yep. So if you've ever wondered (like the hundreds of people who contact me for dog training or coaching) why it costs what it does and secretly resent paying a small business because you think it just goes right in their pocket and they make way more than your paycheck thank you very much, realize that your company is taking care of all the other expenses that we have to account for.
Taxes are anywhere from 15 - 30% of what you pay me.
Operating Expenses, ie what it takes to actually run the business like advertising, website fees, materials and supplies, professional memberships and education, and so much more, is somewhere from 15 - 30% of what you pay a small business.
So, with just those two categories, you can see that funds go quickly. 50% for salary is actually quite high for a small business.
Here's another picture:
That's what it feels like to be self employed.
Please world! I'm open! Work with me! Please?!
With zero foreknowledge of if or when you might get a new client.
(so what the heck am I doing in that picture? I'm asking for free hugs. A story for another time...)
My dog training business is demonstrated to be seasonal. The winters are slow. For all of us. And the time of year is also depressing. So the combination just equal pure suckage.
I want to work. So DAMN bad. I had idleness. Being self-employed means you pretty much are hardwired to work all the time. Otherwise you'd never do something so crazy (brave, stupid, ...).
The uncertainty factor is definitely not for everyone.
This year, though...This year was even worse.
I've had ONE new client this year.
Thankfully, my life coaching business is starting to gain slow but steady traction, and it's starting to stand on its own two feet.
I've done some classes and random small services to fill in the gaps so that I don't starve, but I'm more than ready for things to pick up. Busy season let's DO THIS!
So, that gives you a little background into why I'm so ecstatic about getting paid today :D
And what it's like to take the dive and rely on other people for your ability to feed yourself (and your dogs). It's fun.
But honest, it is fun. I wouldn't trade a nailbiting moment of it.
Shameless Plug: Anyone interested in life coaching?? Head over here >> freedomseekers << and drop me a line. Let's chat!
Adventure On all ye peoples!