Most people dream of starting their own businesses and while some are too apprehensive to ever start, others are too willing to jump in feet first without knowing what they’re getting into! Here are five harsh truths I learned in the past two years of being a beginner business owner.
1. This will not replace your full-time job… yet.
This one is for those of you who are still in the 9-5 grind. No, you can’t just immediately jump from a steady, stable income to opening your own business and expect to keep the same pay, it just doesn’t work that way. Instead, what you should be doing is executing a side business that will later become your full-time business. This means if you want to become an independent author, or a freelance ghostwriter or editor, you better be writing/editing/reading/studying in your off hours.
Yes, this is exhausting. I know first hand, as I had been plotting and writing the first book I wrote (and still plan to publish) while simultaneously working overtime at a call center. Honestly, at the time, I knew I wanted to self-publish (self-publishing authors on Youtube were just starting to become a thing, think 2015-2016ish…) but I didn’t know when that would happen or how, but I kept writing because I realized it was making me HAPPIER.
That’s my honest advice: if you’re working full-time because you HAVE to to survive, then just nurture the hobby that will later become the business. Now is not forever, and you have no idea how the work you did as a hobby now will pay you back in the future.
For example, the samples I pulled from that book I wrote as a hobby got me a significant amount of clients, including clients for genres that I wouldn’t have had any other work to apply with otherwise.
2. Baby’s-First-Business mistakes will happen!
Mistakes happen, there’s no way around it. My best advice is to try to mitigate them from COSTING you money. For example, I not only ghostwrite/edit full-time I also run an Etsy Store called Notes of Nature Co where I sell handmade candles (made by yours truly) as well as direct-to-print home-goods that I’ve designed/are in the creative commons.
When I made my first international sale to Ireland I was so excited! I couldn’t believe someone in Ireland was going to be wearing the hoodie with my company’s logo on it, it was so cool!
Then I looked at my business account and realized that the direct-to-print company pulled the money out to create the hoodie before the Etsy payment came through, and it overdrafted my business account costing me $35 in charges!!!!
I was so upset! How could a milestone like this bite me so hard?
Because, I made a baby’s-first-business mistake. I didn’t pay attention to how the direct-to-print company worked with Etsy, and I didn’t give myself the grace to have an extra $500+ rolling in that bank account at least at all times (like I do now).
Being a business owner means making mistakes. My advice is to try to mitigate how COSTLY these mistakes are.
Another Mistake: My LLC’s name.
My husband told me earlier: “You should just drop the Ghostwriting & Editing and just make it Ethereal Quill Co.”
Guess who didn’t listen.
Guess who spent $70 bucks on a DBA just to turn around and spend another $70 to file a proper name change.
There is a reason I have NO business debt for my LLC and I might not ever lol.
3. Everything costs more than you think.
Let’s say you’ve been writing or sewing or painting as a hobby for years, you’ve been doing the market research, you know the websites you’re going to use to work/ the avenues to sell your goods in person, and you’re ready to jump in. Woohoo!
You’ve gone on your state website and filed your business paperwork, but you find that you have to pay extra to be an LLC, something you’ve been advised to do (because it protects your personal assets from your business, essentially, if your LLC gets into financial trouble the creditors are not entitled to anything beyond the business: they cannot go after your home, your car, your personal savings, retirements, or investments. In discussions of lawsuits it’s generally accepted advice that LLC’s protect your personal assets from litigation as well, but there are some circumstances where this is not the case).
Now you see that filing an LLC is nearly twice the price as the Sole Proprietorship, though? What gives?
And when you go to open your business account you realize they want another $100 to establish the account “in good faith” what the fuck?!
And, under the advice of someone with your best interest at heart, they tell you to go to a formal tax professional to file your taxes, as the tax office will certify the authenticity and handle any audits you may receive from the IRS. When you get the bill for that it’s an eye watering $500?!
I am here to tell you the cold hard fact: everything costs more than you think. In budgeting it’s common to pad the budget, and when you’re a business owner there is no truer fact. As I stated above I over-drafted my business account and had to pay 35 bucks extra out of pocket instead of being excited about my first international sale because I didn’t give myself enough padding.
Financial padding helps. You can’t let yourself get caught up in the “oh a new book, oh a new desk, oh a new keyboard”, you need to keep yourself focused on your growth goals and your goal trajectory.
Otherwise, you’ve just given yourself a very expensive hobby.
4. RESEARCH IS REQUIRED BEFORE YOU START.
This is all caps FOR A REASON. You should NEVER be jumping into starting a business without doing the proper research of EVERYTHING that will be necessary including laws, documentation, and proper business practices in your field. You need to understand your state laws, the federal laws and all of the paperwork you’ll be required to file as a business.
This isn’t all the research you need to do though: you need to do market research to know the entire ins-and-outs of the industry you’re about to launch head first into. If you don’t have any business courses under your belt, you might want to consider taking a few to familiarize yourself with how businesses are structured and managed. You might want to take a few courses to get some certifications or credentials under your belt relative to your field (like I did by getting my certification in copyediting). If you’re gunning to be an author, you’ll most certainly want to look at workshops and classes held by authors both independent and traditional to understand the publishing industry as a whole.
All of the research you do pays you back 1000-fold. The more knowledge you have the less likely you are to be caught flat-footed, and that’s worth the missed sleep or groggy mornings.
5. On-going learning is mandatory.
You will never be ahead if you’re not researching, researching, RESEARCHING.
Here’s one last hard line tip for you: THE MARKET NEVER STOPS. You are either ahead of the curve or behind and following along. You need to be plugged into social media (even if you’re just an introverted lurker) because then you can see where the market is shifting and what’s becoming popular.
Jumping on a popular trend before the swell? That’s the ticket to success!
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