Tips for running a membership business during an economic downturn

June 18, 2022

Welcome to The Loaf - a weekly newsletter sharing money and business tips for creators & freelancers​

Creator Crumbs

Business: How to Build a Well-Funded Content Studio [article]

Growth as a creative looks different for everyone. If you have dreams of building a small studio, you'll need to learn how to run a multi-person business & manage money.

Money: Fees to Watch Out for in the Finance Industry [article]

The finance world is notorious for hidden fees.

But what can we do? I believe the best thing is to be educated and aware of what fees exist so that you can ask questions and figure out what you're truly being charged.​

Free Financial Advice*

Topic of the week: ​​Are a CPA and bookkeeper the same thing?

While a CPA may offer bookkeeping services, they're technically two separate roles.

A CPA is a Certified Public Accountant and they typically help business owners with tax planning & tax filing.

You don't need to work with a CPA to file your taxes because of the DIY tools out there, but as your business grows and you have more complexity, it usually makes sense to start getting tax advice.

Enrolled Agents (EAs) are another tax professional similar to CPAs, but they focus more on tax-specific scenarios than they do accounting. The EA certification is the highest credential awarded by the IRS.

On the other hand, a standard bookkeeper doesn't do tax prep or filing and they only help with the finances inside of your business. Some of their tasks may include managing your accounting software, categorizing tax-deductible expenses, or sending you cash flow and profit & loss reports.

Many bookkeepers are also CPAs or EAs, but there isn't a specific license to become a bookkeeper. This means you need to do some research and due diligence before choosing one.

For me, I would look for an EA that has experience with my style of business & provides the services I'm looking for, get a feel for how they communicate, ask other business owners for recommendations, and go with whoever feels like the best fit after meeting with them.

Have a question about money or business? Submit it here

money matters

A new addition to The Loaf, I'll be doing short interviews with freelancers, creators, and solopreneurs to give you insights & advice around managing money & building a sustainable business.

For the inaugural edition, here's a quick interview with one of my favorite freelancers, Liz Froment:

What’s one piece of advice you would give to someone just starting out?

Take consistent action. Build a system that makes it easy for you to accomplish 1-3 things a day to build your business. A huge part of that should be marketing. When you start, no one knows you, so after you get your site set up you have to build a ton of marketing into your systems.

It's uncomfortable for new freelancers to promote themselves, and I definitely struggled with it. But where things took off for me was working with my business coach and setting up a system of doing daily marketing activities.

Marketing is a lagging indicator. The work you put in today may pay off 2 weeks, 2 months, 2 years down the road. What you do right now will compound and pay off and if you ignore the marketing part it's going to take that much longer to build success.

It's kind of like the power of compound interest, the earlier and sooner you take advantage of it, the better otherwise you may have to play a lot of catch-up.

What’s the best investment you’ve made in your freelance business?

Hiring a business coach, Taylor Pearson. It was expensive, but I had been stagnating in my business for a few years, making around $55k-60k, which is still really solid but I knew I was missing opportunities to generate more.

Taylor is really good is building systems and that's something that doesn't come naturally to me. I've always been a work harder not smarter type. So I wanted a coach who excelled where I struggled. I spent 6 months working with him and it was like a light switch went on. I was able to learn a lot of productivity/systems building stuff that let me work less and my income made a huge jump, now I've earned 6 figures for each of the past 3 years and am on track for that in 2022 too.

His course the Effective Entrepreneur is a more affordable option. In general, I'm a big proponent of buying personal/business development courses if they are right for you. If you follow through you'll almost always make your money back.

What’s one thing you wish you knew about money before becoming a freelancer?

Moving from a 9-5 paycheck to doing it on your own is a complete shock to the system. I way underestimated my taxes and didn't really set anything aside. Every freelancer can tell you about the look on their faces for that first tax bill. I use Catch.co for automating the taxes part now (thanks to Treyton for recommending it!).

I think a big thing is having some runway and money in the bank before you make the leap. I spent nearly a year in my 9-5 with an end date in my head and used that stable income to save and build a client base after work and on the weekends.

I think becoming a freelancer can bring a lot of stress, especially at the start, so building some savings can help alleviate some of that stress.

Bonus - What's your favorite thing to spend money on?

Books. I love to read and even when my budget was super tight as a new freelancer I never said no to buying a book because it's one of the best investments out there. I was struggling when I spent $10 on Ramit Sethi's I Will Teach You to Be Rich and it legit changed my entire approach to finances. That's ROI.
Right now, I pay $25 a month on Patreon to a guy who went to Oxford and gives lectures on classic books during planned read-a-longs, it's so nerdy but I love it. If I had to cut expenses that would be pretty far down the list.

Connect with Liz on Twitter & view her work here

..more crumbs

💰 Asking Colin & Samir How To Make $1,000,000 On YouTube (video)

🖤 Tips for running a membership business during an economic downturn

✍🏼 15 writing tips from a professional editor

🎥 How to create a successful webinar (and sell more products)

Freelance Finds: What kind of freelance business do you really want to build?

Source

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Keep creating,

Treyton DeVore

treytondevore.com

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