This is a collaborative post with Experian about running your own business and the lessons I've learnt.
I started my blog back in 2010 as a way to stay accountable when it comes to earning money online. By November 2015 I was earning more from my blog than my full-time job and I made the leap into going self-employed full time. I then started a limited company in May 2017 and right now in the first quarter of 2019 we have office space and our first full-time employee.
Running your own business can be scary, so today I'm teaming up with Experian to share my journey and biggest lessons I've learned.
Whilst I am extremely grateful for taking control of my own income and working harder to put more money in my pocket, there have been a lot of financial lessons that I have learned along the way.
Running your own business
Nothing beats the feeling of being my own boss. The biggest thing for me is being able to take a mental health day (or week) when my mental health says ‘nope'. Taking days off in a traditional job left me with lots of guilt, but with my own business, I know that I have worked hard for this freedom.
I also love the challenge of finding ways to grow my business and grow my income. Blogging is still such a new venture and new industry that I love trying out new things and seeing what works and what doesn't.
I also love no longer doing a 50-mile round trip commute!
Managing Cashflow in my business
If you ask any small business owner what their top struggles are, I bet cashflow would be high up there. Managing cashflow when it was just myself and Tony was okay – we could pay ourselves late if we needed to. However now that our business has expanded, we have more outgoings to pay for, like office space and a full-time employee. Rent, wages, and insurances need to be paid on time meaning cash flow is really important to manage.
When I work on a sponsorship then the invoice is raised once the work is completed, and then due 30 days after the invoice – in some cases, it is 60 days or even 90 days. This means that I have to think carefully about where money is coming from.
The longer the business goes on, the more we learn how to navigate this.
A few things that have helped me to manage my cashflow better are:
- Raising my invoices promptly
- Chasing up unpaid invoices
- Diversifying my income
- Having a strategy in place for quieter months
Diversifying income
It is so important for bloggers to diversify their income because you never know when one income stream will take a hit. I have been working hard to diversify my income so that it comes from more streams. This includes:
- Sponsorships
- Affiliate income
- Course sales
- Coaching
- Adverts
- Other products
Managing quieter months
For all businesses, there are times of the year that are generally quieter. Since I have diversified my income it does usually mean that when one income stream is quiet, like sponsored posts, another income stream is picking up the slack, like adverts.
When you're running your own business, it's really important to know when your quieter months are. You could choose to take that month off or use it to invest time in development and research. Or you could run a sale on a product, or push a particular service.
Dealing with unpaid invoices
You complete the work, raise an invoice and wait for the payment to arrive. It is a well-oiled process that should just work.
However, if that payment that you were relying on doesn't arrive then you could be really stuck. Not only does it impact your cashflow, but it also means you need to spend more time on admin chasing up that unpaid invoice.
If invoices are late you can add statutory late fees, and you can go to small claims court to recover what is owed to you. However, it is a really long process.
Having a system in place to deal with unpaid invoices has really helped us to know what to do. We have issued a few letters before starting small claims court proceedings, but thankfully they have been promptly paid after receiving those letters.
Reducing expenses
I am not afraid to spend money if it helps to grow my business, but every quarter I go through my business expenses and see what can be trimmed. Perhaps there is a service I loved but that I no longer need, or switching hosts could save me a few hundred pounds.
I regularly monitor the business outgoings and make changes where we can save money.
Find credit
After paying off £15,000 worth of credit card debt I am in no rush to get into any further debt. However, running your own business and managing cash flow alongside quieter months and unpaid invoices means that I am always aware of where we could turn to if we did need to get credit. I've also kept track of my credit score using CreditExpert.
Get your free 1% at a time printable
This simple trick helped us to clear £15,000 worth of credit card debt. Simply take your savings goal and divide it by 100 to get your 1% at a time. Once you have saved or earned 1%, cross it off. Download this free printable to keep you on track.
Collaborative post
