The Blog Of TL Wall Accounting

Archive for January, 2016

5 Things To Know About Self Employment

Over the last 5 years, there have been a lot of people who have decided to work for themselves. Luckily a few have succeeded, but the rate of attrition is over 95% for those who didn’t make it 5 years. Self employment can be enjoyable, but it can also be hard. Like everything else, there are some things you should know about it before you start and once you’ve started. Here are 5 of those things.

self employment

1. No matter what you’re good at, unless you already have clients willing to work with you your biggest issue isn’t going to be skill or product quality but marketing. This takes place before selling because you have to get the attention of those who could possibly hire you to work with them.

Luckily there are many articles online and local classes in every major city that you can take, some of them for free. However, knowing how to do it is a lot easier than actually doing it. This more than anything else will determine your long term success.

2. The first thing you “shouldn’t” do is buy a lot of office supplies. That’s the tendency for a lot of people because when they were working other jobs there was always a lot of things such as pens and paper around. Most self employed people find that they buy a lot of these things and, if they last in business, will still have a lot of it hanging around 10 years later. Only buy the essentials when you start and determine what you might need as things move along. Buy pens though; there’s never enough pens when you need one.

3. You can’t do it all on your own. Okay maybe you can, but some things you should really think about letting someone else do for you. Paying an accountant to help you get started and to do your taxes makes a lot more sense than doing them on your own. Services such as cutting your lawn and snow removal are partially tax deductible. If you can afford it, hiring someone to come in and do some minor cleaning for you might alleviate some stress to do it all. Did we mention the tax write-offs?

4. Figure out how you’re going to track both all of your expenses and mileage. There are many apps that can help if you have a smartphone but many of them are going to cost you a little bit of money and it’s a monthly fee rather than a one-off charge. Smartphones, schedulers, even your receipts from having to buy supplies can help you figure out where you’ve been. Keeping a notebook or a calendar or even using an app like Evernote (which is free) can help you out. Also, buy a binder of some kind to stuff all those receipts in unless you want to take pictures of all your receipts and save those files somewhere.

5. Try to never spend a lot of your money up front unless you know the equipment you’re using and that you absolutely need it to progress. This is where a lot of people hurt themselves initially, spending money while not bringing in any money and feeling an immediate monetary crunch. Stress is a horrible way to get a business going but there’s no getting around that. Adding money to the stress will make you burn out quicker.

The Correct Way To Go For Your Money Goals

Back in November we wrote a post giving our advice about some financial goals to shoot for in 2016. Those are good goals at any time, and in that article we shared other goals we’ve recommended over the years.

The best thing about goals is they help us to keep on track for what we hope to accomplish. The worst thing about them is that, if we don’t reach them, sometimes we get depressed or frustrated, which leads us to giving them up.

Recently there was an article that talked about financial goals in a way that makes a lot of sense. In essence, the person who wrote the article said that most people look at the big picture when it comes to goals. For instance, if they want to make $10,000 more a year than the previous year, they start at the end, which is the $10,000, instead of at the beginning, which is figuring out how to generate more income in the first place. That’s the difference between having an actual goal and having a dream to shoot for; it’s an important distinction.

Let’s take that $10,000 as an example. If you work at a corporation making $40,000 a year and your goal is $50,000, yet the company usually only gives 3% raises every year, you don’t have a chance to hit your goal if that’s all you have to count on. This means you have to either get another job, a part time job or find another way of making money on the side.

Let’s say you did either of these things.

A part time job might do it for you, and it’s probably your best immediate option. If you found a job paying $10 an hour and committed to 100 hours a month you’d earn $12,000 in a year, which would put you at your financial goal. Or maybe you could try to find a way to create your own income. Either option is viable, as long as you recognize one important thing – it’s going to take some time.

That’s not a bad thing, but it’s something that’s hard for a lot of people to consider. That’s why goals need plans, because the plan will help you realize how long it may take you to achieve your financial goal, whether it’s making money, reducing debt, or saving money. If you invest $10 a month into stock options, it’s going to take a very long time to get that money to grow; if you could afford to pay $1,000 a month it’ll grow faster, but even there if you have big dreams for great wealth it’s going to take time to realize it.

The article recommended people get used to the idea of financial growth by thinking in small increments. If you’re looking to reduce debt, concentrate on one bill at a time as the one to pay off while still making payments on the rest. If you’re trying to increase your income, start by trying to find a way to make $100 of extra money, then see if you can expound on it.

We want to see everyone living in comfort and financial responsibility. We’re not dream providers but, as accountants, we can help you learn where you are and figure out where you might want to be financially. After that, the skies the limit if you have the patience to ride out the time.