Finance tips for the self-employed

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This is probably what you think self-employed looks like:

I’m at an amusement park with my kids, in the middle of the week, and I’m on a conference call while I watch my son try to get on a ride.

Being self-employed looks so nice at an amusement park. The self-employed are always free to go on a vacation. They pick up their friends at the airport in the middle of the day, they show up for poker night because they can stay out late, and they can plan their wedding without having to pretend they are working.

Close up, though, most self-employed people are completely stressed about money.

That money part is what I hate about being self-employed. Anyone who says they don’t love a steady paycheck is lying. A paycheck is so nice. It’s reliable like a friend, it makes you safe, it gives you a way to organize your life.

Here’s how I deal with the worrying:

1. Pretend you have an out.
Sometimes I have to calm myself down by telling myself I’ll solve my money problems by taking a regular job. One fantasy I have is getting a job at Microsoft. Once I was giving a speech at a human resource convention in Seattle. And a top HR guy from Microsoft was there. And he wanted to talk to me.

I thought, “Great, I’ll sell him something from Brazen Careerist.”

Then I thought, “No. I just want a job.” I thought I’d do anything—even read resumes all day—if he’d just give me a steady paycheck and access to the amazing health care they give autistic kids of employees.

I hear Microsoft is ending that insurance plan. I wonder if this will help me stay more focused on running my own company instead of looking for escape routes. Probably not.

2. Forget living in the moment. Instead, live five months in the future.
Your clients will take too long to make a decision, no matter how long they take, and they will never pay immediately. So instead of fighting the lag-time, you should always be earning money for five months out. If you are spending your days trying to drum up business to get revenue five months from now, you feel safe, knowing that it’s not an emergency. Any closer than that and you feel like if you don’t close you’re gonna die.

3. The only way to feel rich is to be able to dump an awful client.
Thinking five months out frees you to dump a client, and it’s so so fun to dump a client who misbehaves. It’s a way to assert your power as a freelancer even though you have no power because if you don’t get money you’ll starve and have to get a staff job somewhere (and you probably can’t – because most self-employed people are largely unmanageable in a corporate hierarchy).

I had a client that signed a contract to pay half up front, and then didn’t. And the company was so late it was almost time to give the speech. And I said, if you don’t pay this week, I’m not doing the speech. I loved that. I loved that because I don’t need the money from the speech. I’m okay for right now. Well, I mean, I’d really like the money this week. But I’m okay for next week, so I liked telling her to fuck off.

4. Have one great client.
You need a lot of schemes. You have to always be pitching different people different stuff because you don’t know what’ll stick. But you really need one client that is great, and pays on time, and makes you love doing your job. That client gives you sanity.

For me that is Federated Media. Really, I could write a whole post about how much I love them. They are so easy to work with and they sell ads that I’d never sell on my own, because I’d get impatient and tell the advertiser to fuck off before I collected any money. So Federated makes my life great, because I can blog about anything and say yes or no to anything and they just roll with it, and keep selling ads. Well, they did tell me to remove the word fuck from a post. But that’s how you know that Federated didn’t pay me to write this post. Because they allow pretty much anything except obscenities, which they say fuck qualifies as.

5. Self-employment stability requires doing stuff you hate.
Be a grown-up. Self-employed doesn’t mean you love everything you do. I have done stuff to appease editors that drove me crazy. I have given speeches to groups of people that were all at the conference with the sole purpose of cheating on their wives. I do lots of stuff I don’t like. I remind myself that I do it so that I can have a job that I pretty much love.

To cope with the bad stuff, you have to find a way to trick yourself. Like, I don’t love the pressure, but I love writing about the pressure.

 

89 replies
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  1. PepeLePew
    PepeLePew says:

    Dear Penelope,

    (I love that name! I guess some social conditioning, IDK)

    I got hooked up by “because most self-employed people are largely unmanageable in a corporate hierarchy”, and that is exactly what I feel myself trying to immerse again as some else employer, after some years being on my own survival instinct.

    And I can see yours (feeling) when you use  F# Off twice here. That type of proud you get being in your own and feel no attachment from above, below or any side. No conditioning when you know you are right and take your own direction.

    In this economic crisis, things for me got too thin to breath by, like a straw, and started few months ago to put my old dusty Resume, everywhere (I got 2 kids I’m responsible for and I’m proud to be).

    When I came to this country, read newspaper for job posted was like Penelope in Wonderland, em, I’m sorry, Alice. 14 years ago. They fight to give you the best opportunity, health plan, vacations…and even they put dollar amount what they are capable to pay you by hour (wooow…). No kidding. I remember that clearly.

    Now they ask you for eeeverything, no less than 4 Certifications, 29 socials skills, including the most standard: “work great under pressure” and of course ‘multitasking” for just $9.99.

    I’m praying, from one hand, nobody ever call me (and I guess my pray is working), on the other hand, I feel I got also too rusty on my profession and outdated, that honesty I have to face the truth to myself and get up and do my push up to get better, far better.

    One thing is feel that…uncertainty, that…insecurity about not get job to do or not getting pay, other too far away is feel that for long period of time, like is happening to me, and I guess many other Solopreneur (ey, sound more fancy that self-employee) are feeling the same.

    I feel like, I didn’t see this whole world chance this fast. Nothing is now what it used to be, and we need some great advise to get out of this fog.

  2. Helen
    Helen says:

    Wow, I`ve been absent from this blog for a few weeks, as I am trying to get a handle on my own new self employed status, and BOOM I come back and it`s like the post is written just for me!!  Boy, its been a transition time for sure, I quit my secure paycheque at the end of August and I`m swimming in start up debt, but I will tell you, I feel better and better as time goes on.  I`ve never been much of a worry wart thank goodness – I think this self employment stuff, its for me.  And yes, it does really help to be married to a steady paycheque with benefits, and I think I would really start to worry if that were to change.

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  5. Biffpow
    Biffpow says:

    As someone who’s been self-employed for many years, I can attest that all five of your tips are accurate and important. I have one or more of those thoughts go through my head each day (and have for about ten years now). Though I think, for me, #4 is the most important–as long as you have one great client that you like, can depend on, and can think of more as a partner than a regular client, you will be able to handle the worries and stress of going it on your own.

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  7. Finance
    Finance says:

    Thank you for this post! The tips are great and you kind of reminded me of what I signed up for when I decided to go into business. 

    I have only been self employed for 1 1/2 years and I have been thinking of getting a steady paying part time job recently. Business is not going so well, mainly because I work in finance and the economy is shit and people are scared to change anything, even if it means saving more money in the end. It really doesn’t help that I look young too. 

    Loved tip #5, just suck it up and keep working, right? Thanks again! 

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  9. Tashina Cross
    Tashina Cross says:

    i love you! and i don’t even know you!
    my friends and family all think that i live the dream. crazy! do they realize how hard it is to put all of your eggs in one basket. one dream. it’s a nightmare. a crazy nightmare! i did have that one client though. so essential!

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