Shownotes

I have officially been a full-time business owner for 6 months!! And OH MY GOSH what a journey it has been. Today's podcast episode discusses the 7 steps I took with my money in order to quit my job and take my business full time.

Podcast Transcript:

What is up, everyone happy Tuesday. I hope that you are having an amazing start to your week. And bear with me a little bit on today's podcast episode, I was in a concert this last weekend. It was a ton of fun. It was a total blast, but I sang a little bit too hard. My voice is a little gone, so we're just going to have a little bit of a raspy voice podcast episode today. But it's going to be fun. today marks really close to the six month anniversary of me actually quitting my teaching job and taking Save Live Thrive full time. And while I was just kind of reflecting on that, I realized that I never walked you through what I did to help prepare my finances to become a full-time business owner and solo entrepreneur. So that's what we are going to talk about today for everyone out there that is interested in starting a business, or maybe you have a business and you're starting to brainstorm through like, well, how could you take your business full-time. I hope that just sharing a little bit about my experience and the steps that I took through the process and what I was brainstorming and thinking through can be supportive of you on your journey as well. So let's go ahead and just jump right in. 

Step #1: Pay off high interest debt

So the first step, and this is something that I had already done on my financial journey. And if you've been following Save Live Thrive for a while, this point is not going to come as a surprise to you. You might be working towards this already. But it is a very important step. It is to pay off high interest debt. Or any other type of debt that you feel like is going to be a significant burden on your monthly cash flow that would maybe cause more of a risk in your overall financial life. If your business took a revenue dip for a couple of months. 

And for me, this was just my credit cards. I've paid off all of my debt other than my student loans. And you've heard me talk about this previously. I'm not super worried about my student loans at this point in time. But I did pay off my high interest credit card debt back in like 2018, 2019, and I kept it paid off. 

So this wasn't something that I was really thinking through in 2021, when I was making plans to take Save Live thrive full-time, but it is definitely something that I would recommend doing if you have not done so already, and you want to become a full-time business owner. 

Step #2: Build up your emergency fund

The second step. And this was something that I was focusing on in 2021 was building up my emergency fund to six months worth of expenses to really make sure that I had that cushion in place to withstand any potential dips in income. Because when I was getting ready to take Save Live Thrive full time, I really wanted to set myself up in a position where if there was any type of revenue dip that happened for a season or a quarter,  I didn't want to corner myself into a position where I started thinking about my out opportunities, like how I would need to like pivot or close Save Live Thrive down sooner than I would need to, because I didn't have that financial cushion in place. Before building up my emergency fund to six months worth of expenses, I was pretty much living in like the three to four month of expenses area, but with taking my business full time, and my income can fluctuate as a business owner, I really wanted that full six months worth of support. So that is the next step. After paying off high interest at building up your emergency fund to a point where you feel really comfortable in your ability to cover your expenses, if you have any dips in your overall income. 

Step #3: Become comfortable with your revenue base

The next thing is I got very comfortable with my revenue base. So I wanted to make sure that the revenue that Save Live Thrive was generating was enough to be able to pay myself to continue working towards my financial goals, like traveling and my investments and hobbies and the house that we just moved into. I wanted to make sure that my revenue was supportive of all of that.

And one thing that was just so crazy to me about running my own business was the ability to take my income into my own hands. Like this was such a crazy money mindset shift that I had to work on and also am still working on today. I think that we're always on a journey of leveling up our money mindsets over time as we enter the new chapters of our lives. But it was so crazy. Just kind of learning about the different ways of making money that are out there because within less than a year, within less than 12 months of starting Save Live Thrive, I started having revenue months where I had multiple days, like single days within a month where I was making more money in one day than I did in an entire month of my paycheck, working as an elementary music teacher. 

Like that was just completely mind boggling to me about that. And I was doing that while getting to sleep until nine in the morning, as opposed to having to get up at like 5:45 AM. I was able to rest and relax during the day I was, I had way more control over my schedule. I was able to eat a lunch that made me feel like an adult.  I was able to take time for myself and. It was just a complete energetic shift. Being able to have that income coming in in a month when compared to what my workload looked like when I was teaching and the income that I was making during that time as well. And you know, those revenue days where I was making more money in a day in Save Live Thrive than I did in a month of teaching like that didn't happen every day. I don't want to give you any false expectations or lead you on to think that that's something that happens every day in my business, but I was able to scale Save Live Thrive quickly enough to a place where it just no longer made sense for me to continue teaching. 

Teaching started becoming such a time commitment that it didn't make sense to continue teaching for me anymore from an energetic standpoint, from a mental health standpoint and also from supporting my dreams and goals and aspirations standpoint as well. 

Step #4: Organizing my business budget

The next point and understanding and creating a comfortable revenue base was really getting crystal clear on my business budget. 

And business budgeting: I like it as much as I like personal budgeting. 

I just think it's so much fun to see where numbers are going to and where they're coming from. And just to like, take all of that in. But even if budgeting is not your favorite thing in the world, it is so important to understand the financials of your business. I also talked to a tax advisor to make sure that I understood everything that I needed to about paying taxes as a self-employed individual really understood kind of the paperwork and bookkeeping and all of that as well, so that I had a really solid base about that aspect, that administrative aspect of my business. And I also took some time to research and understand different retirement savings options for self-employed individuals. I think a misconception that a lot of people have when they're starting a business, or they're thinking about self-employment is that you lose all of your retirement plan options, but that is not true. There are a couple of different account options that people can look into to save for retirement. There are individual retirement accounts, solo 401k. SEP IRA simple IRA. And there's a couple more different accounts that I could even add to this list, but the moral of the story is that there are retirement account options available for self-employed individuals. It's just important that, as a self-employed person, you keep up the motivation to continue to take action towards your retirement savings. But those options are out there. And if you have any questions about any of that, you know, you can talk to a financial planner to kind of guide you through that process and see what account options might make the most sense for you. 

Step #5: Insurance

And the next item is insurance. And as a self-employed individual, I was no longer on a company health insurance, dental, vision, life insurance plan. I had to set all of that up for myself. And the costs did go up in this area. I wasn't on the cheapest health insurance plan or the most affordable health insurance plan, because the one that my employer had was not very inexpensive. So that wasn't a huge shift. I think I went from paying like $220, maybe dollars a month to $308 a month for health insurance when I changed health insurance. But of course this can really vary by state and by, you know, health circumstances, family circumstances, and all of that. I am a single individual. I'm in my twenties. I'm very healthy. So that's something to just kind of keep in mind as well. But I did have to get an individual health insurance plan, which I signed up for during the open enrollment period for health insurance at the end of 2021. 

Step #6: Business insurance

And kind of on this topic as well. You want to make sure that your business is properly insured. That you have whatever types of insurance policies that your business needs to protect itself financially. You definitely want to have all of that in place as well. 

So once I had all of those different things lined up, I also wanted to spend a little bit of time just kind of playing around with what my new monthly budget as a self-employed individual would look like. And I wanted to get very comfortable planning for those fluctuations. Luckily, I'd done a lot of side hustling before starting Save Live Thrive, and working in the music space in general. Even before I was teaching, I was very familiar with what an irregular income could look like. So this wasn't a huge shift for me financially and from a budgeting perspective. But I did want to take a little bit of time and practice and plan out what is this new budget with me being a solo entrepreneur, running Save Live Thrive, what is that budget going to look like? So. I experimented with that a little bit, just to make sure I was feeling very, very comfortable in that area. 

Step #7: Get a backup plan

And then finally. I brainstormed what my backup plan could be, because you've heard me say it before. You're going to hear me say it again. Even after this podcast episode, I am just such a big believer in preparing for the worst and hoping for the best. And for me, I wanted to make sure that I knew what my backup plan would be if Save Live Thrive folded, or if it was no longer able to support me financially, and maybe if I needed to go back to a side hustle or whatever. And you know, that very well could happen. Obviously I can't tell the future. I hope it doesn't happen, but that's why we have backup plans. 

So I knew that I could always go back to teaching if I wanted to, because I know that I'm a really awesome teacher. I'm very good at what I do. That's part of the reason why I think I'm so good at financial counseling is because I am such a good teacher. And I have that skillset of being able to teach people new concepts and ideas and all of that. So I knew when I was taking, Save Live, Thrive full-time that I could always go back to teaching music if I wanted to. Also with pursuing the accredited financial counselor certification, if I didn't want to go back to teaching, I could probably get a job at some type of financial services company, if I wanted to. Which I don't really want to do that, but that's an option on the table for me. I could go back to college. I could get an MBA if I wanted to, I could maybe go straight into working for another company, but most importantly, when it comes to all of these different backup plans and, I hope that you're noticing that there are a couple of different options that are out there to fall back on, and one thing that Save Live Thrive has really shown me are that there are so many different money making opportunities around us. Money is all over the place. If we just kind of start opening up ourselves to be receptive to those opportunities. And worst case scenario. And I say that in total quotation marks, like I don't even really think that this is a worst case scenario at all. I feel so confident in my ability to start another business. If I needed to, if Save Live Thrive, ended up not being a thing. One day, I know how to start a business. I know how to monetize a business. I know how to monetize social media content and to build an audience and all of those different things. I know how to do all of those things now. So I could always start another business. If I wanted to down the road. And don't get me wrong. I absolutely love Save Live Thrive, and I do not want it to fold or close down or anything like that at all. But there are options if anything happened down the road and Save Live Thrive is no longer a viable income source. There are other things that I could do to support myself financially, because there are so many different money-making opportunities out there. So those are, I don't even know how many points I said, maybe like five or six. Those are the five or six points or action steps that I took when taking Save Live Thrive full time. 

It has been an absolute blast being a full-time business owner. These last six months, I cannot believe how quickly time has just flown by. And one thing that's been really, really cool since becoming a full-time entrepreneur are the other entrepreneurs that I've been able to connect with. And so many more of my clients are also entrepreneurs and business owners that want to learn about how to conceptualize their business finances and how that can relate to their personal finances, which are separate business finances and personal finances. They are separate and they should be for a lot of different reasons, but that's more than we can kind of get into and this particular episode, but it has been so amazing getting to meet other business owners, also getting to talk to people in this community that are starting their own businesses and have dreams of taking it full time one day. 

And if you would ever like any support on your journey, you already know about financial coaching opportunities. I do have limited one-on-one spaces for the summer 2022, and I also do business coaching behind the scenes as well. It's not something that I talk about as much on the front end. Those business coaching slots tend to get booked up more behind the scenes, but that is an option for you as well. If you are currently a business owner or you want to start a business and you are looking for a mentor to support you on your journey, just know that that is an option as well. If you are interested in learning more about any coaching opportunities with me, send me a message on Instagram. 

My handle is @savelivethrive to learn a little bit more, and I hope that this podcast episode was beneficial for you to just kind of learn about the things that I was thinking through and brainstorming from a financial perspective, getting ready to take Save Live Thrive full time. It's been an amazing journey. 

Thank you from the absolute bottom of my heart for being here and being a part of this community, because I could not be where I am today without your support. And I'm just so freaking grateful for you. I love you so so much. I will see you next week on Tuesday for our next podcast episode, and I hope you have a beautiful week. 

Interested in working with Charlotte?

The Wealth Building Bootcamp, A 12-week group coaching experience designed to teach you how to build wealth, pay off debt, and live the life of your dreams.

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Disclaimer: The content and information provided on this podcast is for educational purposes only and does not constitute professional financial, legal, investment, real estate, or tax advice. For recommendations on your specific financial situation, you must additionally seek the services of an appropriate licensed legal, accounting, tax, real estate, or investment professional.

Music written by Chris Glassman