One of the most exciting things that comes out of running your own business? The freedom to do all the things! Like, ALL the things. Gone are the days of answering to a nagging, annoying boss. YOU’RE your own boss, legend (cue gifting yourself a ‘Boss Of The Year’ mug)
Flipping your old employer off and starting your own business is INCREDIBLY satisfying. However, it is important to rein that excitement in a notch and acknowledge that you don’t need to do every single thing yourself. There are many expectations that I had for running my own business that turned out to be completely and utterly overwhelming when it came to actually doing them myself.
I have since learnt to contract certain areas of my business out and to pay experts to help me out. Since doing so my life (and my business) have become much more streamlined, and far less stressful. I’m here to shed a little light on the things I wish I had known sooner, in the hopes that you too, will learn something new!
When starting your own business, it is so easy to get caught up with thinking about all of the things you think you need.
Things such as business cards, a brand new MacBook, a top of the range camera – these are just a few of the things that you don’t necessarily need straight off the bat. The camera that I started out on was a 5-year-old Leica D-Lux 5. My laptop was a 2-year-old MacBook Air. Both devices served me super well, and it’s only been within the last 2 months that I have upgraded!
So many people enter the self-employed market thinking that you need custom designed websites and fancy business cards, when really, all you need is the essentials. My recommendation would be to spend your money on having a professional logo designed and a brand identity created. Not only will these carry you through the beginning of your journey, but they will give you a plethora of confidence to start your business on.
What actually is essential to starting a business is the foundations. Things such as the correct financial set up, registering your business, learning how to pay your taxes are just a few of the actual essentials that you need in order to get your business up and running.
Focus on the essentials and along the way as your business grows it will become clear what you need to invest in and what you don’t.
Okay this was one big lesson that I learnt fairly early on. If you are freelancing and working for yourself, it is super important to save 10-15% of each invoice that comes through. Your first $24,000 are tax-free and anything beyond that incurs a tax penalty.
In Australia if you earn over $75,000 a year you must register and pay GST. GST is a 10% on goods and services. Find out more.
This is something that I really recommend you do from the very start, because no one wants tax time to come around only to find that they have been whacked with a $6000 tax bill!
Thankfully, this never happened to me, however, I did learn from the mistakes of previous employers to keep an eye on your taxes and what your role is registered as, as it may not always be as it first seems. I hired an accountant pretty much from the get-go, just to ensure that everything is being done correctly and he has saved me a lot of time and worry.
One thing that I quickly learnt about running my own business and freelancing is that every pay week will be different. I found that it took around 8-12 weeks to really understand the ebbs and flows of my income, and how and where to start saving my money. I have found that by working out how much my living expenses are, how much I want to save, and how much I want to earn, I was able to easily then figure out what percentage to split my pay into. For example, each invoice I put 20% into my taxes, 30% into my bills and livings expenses, 30% into my savings and the remaining 20% into my spending account. This may not work for everyone, but for me…..it has worked a treat!
Don’t expect anything to happen over night, or over weeks for that matter. Things take time. Things don’t work out the way you thought they would in your head – but when they do, it’s worth it. By having a consistent stream of income already in place by the time I quit my full-time work, and 3 month’s worth of living expenses saved up, it was much easier for me to start my business off on the right foot. I worked hard, I networked and I went above and beyond for my clients. It’s from this hard work that my business is (and has always been) in a place where I get 90% of my work through word of mouth. Still, nearly a year on, I am in the fortunate position where I do not have to pitch for clients – and I firmly believe it is because I put so much hard work in at the start!
You really have to put the time and energy into making your business what you want it to be. If you want to figure out how to improve your website, research it. If you want to know how to improve your financial setup, google it. It’s as simple as that! I learnt everything I know either through asking friends within the industry, reading blogs from other creatives, or (yep – you guessed it) Googling it!
Register for an ABN (Australian Business Number)
Open a new bank account for your business expenses and invoices
Set up a spreadsheet for your Invoices and ExpensesOpen a Xero Account if your finances are more complicated
By: Gemma Ernst