Have you ever wondered why other creatives find massive success online and business but you still sit in oblivion? Is it luck? Fate? Do the search engine gods just love them? Nope. This is why having a business savings account will be the hardest and best thing you will do.
Actually what it all comes down to is money and that is why this week we are going to talk about finances. Specifically about having a savings account for your creative business. Finances are a very important part of a creative’s life and not just what you are bringing in from your business.
Why do I need a business savings account?
One of the best tips I can give any creative starting out is start a savings account for your business. This is crucial. If you don’t have money in savings to spend on important marketing aspects of your business and other various things, you will sit in a dark cave of oblivion on the internet.
I’ll be honest, this has been me for the past several years with this blog. When I first started out writing and publishing books, I knew I had to have a web site. However, no one told me about SEO, having an opt-in to give newsletter subscribers, running ads, etc. These are key elements to success in a business. You have to learn how to market yourself and your products. No one else will do it for you. I wish I had known about these things sooner. I am slowly but surely fixing my mistakes.
Mistakes I have fixed so far are…
- Recently upgraded my opt-in from a checklist to an e-book for new subscribers. (Don’t get me wrong, checklists are fine. When you are first starting out, this will work. I just wanted to level up a little bit and give more value to my new subscribers.) Cost: $35
- I’m currently working on new covers for all my poetry books so they look more like other books in the genre. Cost: $17
In the near future I plan to:
- Hire someone to help with my SEO next month. SEO has always been a mystery to me that I can’t figure out so I’ll be beyond happy to have help with this.
- Hire someone to make my Instagram graphics for me. I am definitely graphically challenged, it’s just not something that’s in my skill set. I’ve tried various times but I can never get it right.
- Hire someone to manage my social media accounts and drive traffic to them.
These are just the tip of the iceberg that the money in my savings will be used for. I will also spend this money on book covers, formatting, illustrations, ads, promotions, etc. I also want to point out that there is nothing wrong with hiring people to do the things you can’t or do not want to do. It’s better to hire an expert than to keep spinning your wheels trying to learn something you don’t understand. Hire experts and move on.
How much savings do you need?
Ideally I would say at least $1500-$2000 to start. However, start small, every little bit helps. It could be $25 a paycheck each week, $50 a paycheck if you’re paid bi-weekly. You could also wait until the end of the month and split the leftover money you have between your normal savings account and one you set up for your business. It’s up to you. Take three to six months and start saving, you may be surprised by how fast it adds up. You could even pick up extra hours at work or take an extra weekend job to raise funds faster. The website RealWaystoEarnMoneyOnline has a lot of ideas for extra gigs and side jobs you can do to make money. Like you, I’m in this boat right now, saving for the upcoming expenses I will have next month and throughout the rest of the year.
It’s also important to have a budget. Sit down and figure out what you can cut out or cut down on. Making a few changes could save you significant dollars that you could put towards your savings account. I’m a fan of budgeting guru Dave Ramsey, you can find out more about budgeting on his site.
Expenses add up.
Will I really go through $1500-$2000? It’s a very good possibility. Hiring people and paying for things definitely add up. For example, here are my estimated expenses for the next month.
Stock Photo Site Subscription: $69
SEO Person: $40 (Starting with a basic package to see what kind of results I get over a three month period.)
IG Graphics Person: $125
Terms/Policies Kit: $150.00
A $1500 savings account will cover about six months of just these expenses minus the terms/policies kit because that is a one time purchase. It’s best to plan ahead for things so you don’t get overwhelmed. Add a new service (SEO, traffic, social media management,etc) every month or every other month if it’s easier. You don’t have to have everything at once. This is like putting a puzzle together, one piece at a time. Each piece builds on the one before it so everything works together in order for you to create more product or help your business get noticed.
Since I’m an author, I’m going to list common expenses in an author business. These are just examples of what you may be spending your money on. You have to decide for yourself which expenses fit your business.
- Web site Hosting (monthly or yearly, this is a must have)
- Domain Name Renewal (monthly or yearly, this is a must have)
- Stock Photo Site
- Social Media Graphics Designer ( Instagram/Pinterest)
- Social Media Traffic Expert (Instagram/Pinterest)
- Terms/Policies Kit for web site/blog (one time purchase)
- SEO Expert (Monthly)
- Book Cover Design
- Book Copies (for author events)
- Web site promotions
- Web site management (Monthly-This person works in the back end of your site to make sure everything is working correctly-plug ins, security, etc)
- Software (Grammarly, ProWritingAide, Scrivener, etc)
- Paid Email Program (Mailchimp, ConvertKit, Constant Contact for your newsletter)
- Author Swag (Bookmarks, business cards, promotional banners/signs, etc for author events)
- Review Software (Book Review Targeter, Book Connect Premium)
- Publisher Rocket or KDP Spy (used for ideas, keyword research, categories, etc-one time purchase)
- Courses and books (Tip: It’s great to take new courses and learn lots of things but don’t get caught up in learning and not applying. Also, don’t get caught up in shiny object syndrome and buy more learning materials than you can get through.)
These are just some of the expenses that indie authors have to consider in their business.
As you can see, having a savings account for your business is crucial for success. Here are some steps you can take to get your first few dollars in your account.
Start making a list of all the things you will need and people you will need to hire to do things for you. Then look at the products you will need (software, courses,etc) and go online to a site like Fiverr and research people that do the specific thing you need. I always look at Level 1 and Level 2 sellers, paying close attention to how many reviews they have and what the feedback is. This should be a fun activity and get you excited about your future. I know I get excited about hiring people to take some tasks off my plate.
Take some time to sit down and either make a budget or go over your budget to see where you may be able to cut costs. I use budget sheets from the book Total Money Makeover by Dave Ramsey. However, you can use your favorite budgeting tool or whatever works for you.
Start small, even just $25-$50 a week or so is enough to grow into something decent in a few months. Don’t stress out about it, every little bit helps.
Think about an extra job or side hustle you can do to make extra money.
I hope this post helps you understand why saving money for your biz is so important. Remember, I’m in this with you and I think we are going to have a fantastic year once we hire some help. We got this.
Are you feeling a little overwhelmed? No worries, next week I will be writing a post breaking this all down so you know what you need to do step by step.