As I continue to make the journey from being a self-employed freelance copywriter to an actual business owner I’m realizing I have a lot of old “self-employed” mindsets I need to change.
One of them has to do with how I think about money.
Even though I’ve always maintained separate bank accounts for my business and personal finances it all sort of felt the same.
When I needed to pay myself I would just see how much money was in the business account and then I’d subtract any upcoming expenses (there wasn’t much) and then I’d decide how much I could pay myself that month.
I never really paid attention to how quickly clients paid or how much profit I was making, because frankly it all felt like profit since I was just a one-man show.
But now things are different.
I still write a fair amount of copy but I’m slowly transitioning my business into an agency model. And this means I find myself spending a lot more time looking at my finances.
For example, before I can even submit a proposal to a client for a digital marketing package (website, automated campaigns and PPC management) I have to first find out what my hard costs are going to be.
And of course the biggest cost is man hours. People cost. And as an employee in my own company I have to include myself in those calculations.
So I get my spreadsheet out and start crunching numbers until it all makes sense. I also have to not only make sure that the projects I take on are profitable but they have to be profitable at the right time (cash flow).
I realize how important it is to be paid quickly and to wait until you have to pay something to pay it. This is all new for me and it’s not what “excites” me but something tells me I must master this skill-set if I’m to really reach the promised land of owning a business instead of owning a job.
I still have a bookkeeper and a CPA I use. But I think it’s important to really get a feel for how cash flows in and out of my business. It helps me make smarter decisions.
Anyway, it’s late and I’m tired but I just wanted to post this update to let you know this is something that’s been on my mind lately. And I’ll probably be writing about it more in the coming weeks so I can “learn out loud.”