As we head into the new year, goals and to-do lists getting worn in, there’s one BIG thing I want to chat about.
Mistakes. I’ve made tons of them. I’m not talking about that guy I dated in college or the lie I told in elementary school, I’m talking about pitfalls and fears that I’ve crumbled into over the last six years of being a creative business owner.
Like the time I said yes to that job because I was desperate to pay the bills, but deep down I knew the client would be a nightmare.
That time I decided to take a risk in my business and start offering a service that was TOTALLY not in my lane, and it landed me NO customers and put my business in debt that took me over a year to come out of.
Mistakes are a part of the game! They happen to everyone.
While I’m super grateful for all of the mistakes I’ve made over the last six years in my business, there is ONE mistake that I wish someone would’ve warned me about, so here I am telling YOU:
The biggest mistake every new creative entrepreneur makes when starting out is giving in to the FEAR OF FINANCES.
Yep. It’s freaky, it’s intimidating and believe me…I know you’ve got a million things going on at once! You’re focusing on your craft, growing your social media numbers and getting that next big client, but what are your profits?
When was the last time you looked at your income and expenses and did some bookkeeping or created a budget for your business?
The icky truth is, and maybe this is just me, but, in the beginning, I was wayyy more focused on the numbers under my Instagram handle than I was about profits. WHAT?! I know.
It’s exciting, it’s something people recognize you by, it calls for a level of respect this day in age and it’s so easy to just hit post and become consumed with the numbers, when all the while, your business can actually be just barely hanging on by a thread financially.
Trust me, taking a good, hard look at your finances is icky. It hurts and it can be incredibly humbling, but I am SO grateful I did this. In fact, it wasn’t until just over a year that I really started taking this seriously, and you know what’s happened?! My business and my income have tripled.
Just last quarter alone, I made more profits in my business than I did in the first three YEARS combined and it wasn’t because I landed this or that deal, or that big name client, etc… it was because I’ve finally set up financial systems in my business that have made me OWN and not FEAR finances.
So, what are my biggest tips to help you OWN your finances and not fear them in 2019?!
1. Hire an accountant.
This one is huge. I am a creative person. I am not a numbers person…The amount of time and energy it takes me to research and file my taxes, stay on top of my books, etc. is time and energy that is poorly spent. This was the first bit of my business I started outsourcing because that money I spend each quarter on an accountant is allowing me more TIME to do what I’m good at and spend those hours making more money with clients, spending my energy researching my industry, growing my craft, etc. It was a scary thing to let go of at first and to start paying someone, but, in the long run, it’s made me more money. PS: If you’re a brand new business owner, make sure you at least use accounting software like Quickbooks, Honeybook or Dubsado to track your income and expenses, send invoices, etc.!
2. Open a separate bank account for your business.
Oh the chaos that is co-mingling. Truth be told, we comingled our personal and business funds in the same account for YEARS. This made tax time extra painful, because we could never quite stay on top of saving enough for what I’d owe each quarter. Don’t do this. Have a separate account for your business and personal expenses, so you can track income and expenses much easier, AND save for tax time!
3. Save for taxes!
In our case, for where my business is located, the amount I make, etc. we reserve about 45% of whatever the business has made that quarter for taxes. This is much easier to do and keep track of when you have a separate account for business funds! The money is left in that account each quarter and doesn’t get touched for any personal spending! Sounds so basic and simple, but SOOOO many creatives forget to do this.
I know it’s exciting when you get asked to work on that project, or your Instagram numbers start to climb, etc. but trust me, getting a grasp on your finances is even more thrilling. And it’s necessary. I see so many passion projects, side hustles and kitchen table hobbies DIE because of this one mistake. It’s daunting to and maybe not a part of the brain you like to use, but it has to be done.
I hope this gets you refocused on driving profits and not followers and gets you excited to tackle your fear of finances! Let’s make this YOUR year for growth! Are you in?
PS. If you’re an illustrator or stationery designer, check out my course Pen to Press. If you’re needing help with attracting clients, onboarding and business systems and more, I teach you the EXACT systems I use, and how to grow your profits designing paper products. Click HERE to read more!