I've finally come up with a use for this blog, more than just the typical "Hey look at this pretty photo I took" shtick. I'm going to blog about starting a business, as I try to start a business. I'm going to be completely, depressingly transparent, though where other people are concerned I'm not going to name names or give out specific information. Just my own.
So let's start from the beginning. A few weeks ago I graduated from college, which has put me $130,000 in debt, because art school. I've been freelancing as much as I could while in school, but now it's time to ramp up and hit the ground running, and maybe, just maybe, be able to afford rent AND those pesky student loan payments. Step one has been getting everything above the table. I'm gonna actually pay taxes and things.
In the state of Illinois you can operate as a sole proprietorship without having to file for a business license or any other paperwork, so long as I have no employees, no storefront/studio/permanent place of business, and I operate under my own name, so that's what I'm doing for now, though at some point I should really file for an LLC, so my personal assets aren't liable should the business get sued or declare bankruptcy or whatever.
I should probably take a moment to say I'm not a lawyer, nor have I spoken to one, this is just what I've been able to figure out on my own, and I'm pretty sure I'm right? I really, really should sit down with a lawyer. I'll do that when I have three grand to kick around.
Next I set up accounting and invoicing through Wave. It's free, and they take a very reasonable fee off of any invoices that get paid online via credit card (which, hey, now people can pay my invoices online via credit card if they want.) This will let me track everything, including expenses, so come tax time I can do it right.
Speaking of taxes, it looks like I'm going to have to set aside about half of my income, yikes. "Self Employment Tax" is currently 15.3%, and then because I'm a sole proprietorship I have to pay regular income tax on top of that. Honestly, for the time being I can probably get away with only putting aside 20-25%, I don't exactly make enough to pay much income tax.
It's also recommended to pay my taxes quarterly so as to not potentially be royally fucked come tax day, but I don't think I'm going to do that just yet. My early days priorities are being able to eat, and pay rent.
Right now my living expenses are zero. My wife is pulling out extra student loans to cover rent and other assorted living expenses, giving me some cushion to get going, and I have a six month grace period on the scary scary loans, so my only current payments are for this website and my other blog, and my credit card bills which aren't too bad (I'm only $2k in credit card debt, woo!)
My current project is maximizing revenue, and I'm doing that with the shotgun approach, chasing down every last income stream I can hoping that they'll add up to an amount I can live on. I'll focus on narrowing them down to the things I like/pay the most later. The biggest thing is it's vitally important that I stay freelance, no day job for me. I don't want to have to worry about calling off work, and I don't want to turn down any potential gigs in the industry because I can't get off last minute. I have to always be available to say yes, unless I've already said yes to someone else.
There's so much more to write about, but I think this is a long enough post for now. I'm going to try to write one every two weeks or so, including crunching numbers at the end of every month. So, I guess that will be my next post, how much money did I make in the month of January. (Spoiler, not much.)