Tag Archives: self employment

Business

Should You Have A Home Office Or Rented Space?

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At some point every sole entrepreneur thinks about where they should be working. Sometimes it’s at the beginning; sometimes it’s after a year or so. There are multiple considerations to think about if you’re looking to move into a rented space for your office. Let’s take a look at some of those concerns.

1. Income

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Income is the biggest consideration when it comes to making this kind of decision. If you’re new and don’t have any clients, it’s nothing you should even consider. What you’ll learn early on is that it’s harder being self employed at the beginning of your new career, and you want any funds you have to help give you time to get your business up and going.
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Business

5 More Things To Know About Self Employment

Two years ago we wrote a post titled 5 Things To Know About Self Employment. It covered some pretty good ground, but there’s so many more things that we can share which will help you if you’re not already working on your own and are thinking about exploring it. As with everything else in life, some of it’s good, some of it’s scary. Let’s take a look at 5 more things regarding self employment.

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1. You need to plan for the possibility of making a lot of money. One client of ours spent the first few years basically floundering; he wasn’t a client at that time. Then he struck virtual gold and over the next two years he made more than $350,000 total; sounds great, right?
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Business

What You Need To Know When Starting Your New Business

If I were to start a new business again, I would hope to first read the book Before You Quit Your Job by Robert Kiyosaki. It talks about the reality of what it takes to get into the proper mindset of self employment. It’s not all that easy for the majority of people. Over 95% of all new businesses shut down with 3 years of starting.

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We’ll let Kiyosaki handle the mindset part of this. What we’re going to touch upon are more tangible things you need to think about that will help you transition from what you were doing before to set yourself up properly for what you want to do now.
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Business

What Is Your Self Employment Worth?

This looks like a strange question being asked, especially if you’ve been thinking about going into business for yourself or you’ve been in business for a while, but it’s got a big meaning. Moreso for those new to business than those who’ve been in business for a long time, it seems most people have a problem in figuring out not only how much they should charge for services but how much their worth… aka, what their value is worth.

Premier Wynne announced the successful completion of Project Advantage; a program that enabled a group of four medium-sized, family-owned bakeries to collaborate to increase production and create new jobs.
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Even though every business is different, there needs to be a starting point one should look at when they first get into self employment, and then try to grow from there. We’re going to offer a few things to consider.

The first thing to consider is how much you’re making working for someone else. If you’re making at least 25,000 a year, your initial goal should be trying to earn at least 50% more than you’re making now, with your goal within a couple of years to be making at least 100% more.

Why? You have to consider what you’re losing by working for your present company. The cost of health insurance, even if you’re paying some amount for coverage at work, is going to go up drastically, at least 50% over what you’re presently paying. You’re also expected to pay it in a larger lump sum monthly as opposed to paying a little bit every week or two weeks. True, you’ll have options for coverage, and in most states there are multiple choices based on your state’s ACA (affordable care act) exchange, but it’s something to consider.

While we’re on insurance, if you had dental, vision, or any other type of insurance that’s now coming out of your pocket as well. These aren’t overly expensive to buy on your own unless you have a physician you already like, which can be problematic in some states or smaller communities; then you’ll likely have to pay more to keep that person.

The second thing to consider are office supplies and other equipment. You don’t have an employer to rely on for these items, and even though you get to write them off on your taxes, the amount up front doesn’t benefit you.

The third thing to consider is time off. Right now you probably get vacation and sick pay; that’s not happening when you work for yourself. This means you’re going to have to be disciplined enough to put some money aside for those rainy days unless you can work from home, possibly in bed via a laptop or tablet… although you might not feel like it.

All other bills aren’t mentioned because if you started off making the same amount of money you were making while working for someone else you’d probably already figured out how to pay those bills while still being able to eat and put gas in your vehicle.

Now, notice we started talking about making more than 25K. If you’re making less than that, or not even close to that amount, you’re going to want to think about making at least 75% to 100% more up front to cover those same items as above. The difference maker is that you’ll probably qualify for a bigger subsidy from the ACA, thus you won’t have to worry about paying for health care, and you might even get a reduction on dental coverage; vision care is still on you.

These aren’t set in stone, but it’s a pretty good guide to start with. What you have to do if you consider working for yourself is change your mindset from employee mode to professional mode. Professionals have the right to make more money because they have more expenses. As long as you have a place to start, you can determine what you want to make from there for your products or services.
 

Business

Figuring Out When To Pay Someone Else For Work You Can Do

A common event with many business owners is when something either goes wrong or needs fixing and, instead of hiring out, they decide to take care of it themselves. Even if they can take care of the issue, one has to ask themselves if it’s always the wisest choice at the time.

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If income is a problem then there’s no question that if something needs to be taken care of and you can do the work that you should do it. However, even here, sometimes it might pay off to have someone else do at least a portion of it.

For instance, let’s say that part of your marketing campaign is to send out 50 letters a week for a month. You have a standard letter already set up and all you have to do is fill out the envelopes. The thing is, even if you’ve already printed out the letters, folding, sealing and putting stamps on those letters could take you 3 hours to do. If your hourly billable rate is $100 an hour, you just lost the opportunity to make $300.

In this case someone like a virtual assistant might have been the way to go. Many VA’s cost less than $20 an hour, and whether you supply them with the paper, envelopes and stamps beforehand, those are things you’d have had to purchase yourself. This means that not only would your costs have only been $60, which you could have written off, but you might have been earning money during that same time which means you’d have made $240 off the deal.

Let’s look at something much bigger. One of my clients recently realized that a few of his websites were losing traffic because he hadn’t upgraded them to the new Google standards of mobile speed capability. The cost for hiring this work out would have cost at least $2,000, which is a hefty sum.

Since he had the technical capability to do it himself, he decided to take that task on. The thing is, even though he knew a lot, things had changed over the years so he had to do a lot of research and testing. In the end, he put in at least 120 hours on those websites, and though he got things taken care of, since his billable hourly rate is $125, if he’d had a client or been working towards a client he could have possibly made $15,000. At the very least he could have been marketing his business and attained a new client.

It’s hard to decide when to let things go that you can do, but sometimes it’s worth taking another look at your projects and trying to figure out whether it’s cost effective to have someone else do it instead of doing it yourself. Always remember that you can write off all paid services that relate to your business and that might help you make a different decision if you need to.