I have been asked a few times in the last 2 months if I would have jumped into self employment if I knew Google would hit my clients and advertisers in March and April 2012. Yes, yes I would. Self employment obviously has its ups and downs, but quite frankly, I feel that a bad day working for myself is better than a great day working for someone else. Period.
Just Have a Plan
That said, bad months need to be planned for. Here is what I have concentrated on:
- Diversification. We have many clients and many advertiser contacts. That helps lessen the risk. I also have started a side commenting business, can go back to staff writing, and have a few other ideas in the shoot. In short, there are backups – lots of backups.
- Save. We make sure to keep cash on hand to cover bad months and build this padding up during the good ones. We also used extra to pay down our mortgage so we’d have less debt liability overall. We’ll be buying a new home, but will be renting out our current home and a room in our new house, which will cover the new mortgage, taxes, and expenses.
- Pay yourself a salary. The reason we could save and pay down mortgage debt during the good months is that we didn’t spend the extra we were making then. We pay ourselves a salary that relies on us making way less than normal and stick to it. I swear by this method and would suggest it to anyone.
Overall, self employment is NOT for everyone. Some of my friends actually like their regular day jobs, and I think that’s awesome. Really. I just want everyone to love what they do.
No matter what you choose, I would suggest having a plan. Plan for good months. Plan for bad months. Plan for layoffs. And make sure to budget in some fun. Just have a plan.