Dollar and Cents

Why should you think about saving if your business isn't making much money to begin with? Because of the time value of money. Let's take a look:

Let’s say you save $2,000 every year for 20 years, and your investments earn 8 percent annually. If you start at age 25 and contribute until age 45 and then save nothing further, by age 65 you’d have roughly $426,000. But if you wait until age 35 to begin saving $2,000 a year for 20 years and then retire at 65, your kitty would amount to about $198,000. In both scenarios your out-of-pocket contribution is $40,000. In other words, the sooner you start saving and letting your money work for you, the more you'll have when it's time to retire.

Though I use my income for current living expenses, I'm also very serious about taking advanatage of the time value of money and maxing out how much I can put away for retirement. It's not always comfortable putting a chunk of change away in a retirement account where I can't touch it without penalty, but I've done it each year since I started my business 11 years ago and now I do it without thinking. It's become a habit--one I like very much now that I can see the results of a decade of saving.

If you're not saving, now is the time to figure out how you can. Start with $10 or $20 per week. But start. You'll be glad you did!

Financially Yours,

Pay Yourself First

Though paying yourself first is one of the common things financial planners recommend, my experience is that very few at-home-entrepreneurs do this with their business. But it's a powerful tactic to strengthen your financial position for three reasons:

1. You'll build a fund that you can use when it is time to upgrade or buy new equipment, and you won't have to borrow to do it.
2. You'll have a cushion so that you won't feel pinched when estimated taxes are due or other payments are required.
3. You'll be able to weather the dry spells that come (and they always do!) between income checks.

When I first started my at-home work, I put everything I earned into a checking account. My goal was not to touch the money for six months. And, if I remember correctly, I almost made it. Doing this enabled me to build a financial reserve which I maintain to this day. I've never regretted it.

Too many entrepreneurs are living paycheck to paycheck. And that's stressful. If this has been your pattern in the past, I want you to get servious about building a reserve by paying yourself first. I don't care if you deposit 5%, 10% 20% or 50% in a savings account for your business. I just care that you do it. Paying yourself first works because you don't miss money you don't have. In other words, if you get a check for $500 and put $50 of it in savings, you won't be tempted to spend the $50 because you no longer have easy access to it. This makes it easier to build savings quickly.

In my next post, we'll look at how saving now puts money in your pocket later. In the meantime, I'd like to know: Are you saving? And if so, do you put away a flat fee or a percentage each time you get paid? Hit the comment button and let us know!

Financially Yours,

Getting Serious About Money

I'm starting a series about money for at-home entrepreneurs today. I hope you'll find the information to be valauble enough that you'll forward it to other at-home workers. More importantly, I hope you'll make some changes in your business so that you can keep more of what you make.

I have two simple ideas for you to consider today. One is so basic that I'm almost embarassed to mention it. But I'm surprised by how many people don't do this. Are you ready? Here's tip number one: keep a separate checking account for your business. This prevents you from comingling personal and business money, makes it easier to handle the bookkeeping for your business, and, if you're ever audited, makes it easier to convince the IRS you're handling your business finances professionally. If you don't have a separate account for your business, make this a priority. Many banks offer free small-business checking so shop around if your bank wants to charge you for opening an account with them.

The second idea is also simple. But it requires self-discipline and therefore it isn't always easy. Pay yourself first. Decide what portion of your income you'll set aside in savings and then do so every time you deposit income. You can use this money to open an IRA, to create a rainy day fund for your business, or to invest in equipment and supplies. We'll discuss this more in my next post, but right now I want you to start thinking about what percentage you'd like to begin saving.

Financially Yours,

Talk the Walk

In response to my last post about marketing, Laurie wrote:

I try to talk about what I do to everyone I know. Even people who are my friends often don't realize the work that I do. It is a challenge to do this. I am also trying to say what I do when introducing myself rather than I'm just a wife or mom.

Notice her words: Even people who are my friends often don't realize the work that I do. Is this true for you, too? Some of the best referrals I've gotten have come from friends, which illustrates the importance of letting those you love know what you do.

Like many people, I find it difficult to talk about my work. I don't want to sound like I'm bragging, or pushy, or in need of work. But the truth is, if I don't Talk the Walk, how are others supposed to know that they can call on me for presentations or writing projects?

If talking to others doesn't come easily for you, consider these tips:

• Keep it short. You don't have to have a lengthy speech ready. Simply answer this question, "I help people_______." It's the perfect answer when people ask what you do.


• Add it on. If you usually say, "I'm a stay-at-home mom," when asked what you do, add the above to your statement so that it sounds like this: I'm a stay-at-home mom and I provide products for people who want to make their homes more lovely and inviting.


• Move on. Most conversations will end at this point. So move on. But IF, and only if, the individual you are talking to seems interested and asks a follow up question, then it's permissible to share additional information about your work. This is especially important if you are a network marketer or are talking to someone who is a potential customer--or who connect you to possible clients.

As we've discussed before, word of mouth is the best form of advertising. It can be others talking about you, or it can be you talking about yourself. Either way, as a self-employed entrepreneur, it's important for you to Talk Your Walk.

P.S. I was pleased to see some great reviews of Making Work at Home Work online. If you'd like to read them, please head to: http://tinyurl.com/n4zmm4.

Do You Stink at Marketing?

Jane writes:

This year I have opened a Website/blog/podcast on prayer (my passion), and I realize that I now need to open another site for my freelance writing. I have one corporate client and want to develop more but feel stuck in how to go about this...I realize I am not good at marketing myself.

If you're like Jane and aren't good at marketing yourself, the following may help.

• Be clear about what you have to offer. When you try to be all things to all people, you end up being nothing to anyone. Outline your ideal client, make a list of where your ideal clients hang out (professional groups, conferences, etc.) and then make a plan to meet the individuals who can help steer work your way.
• Ask for refferals. Your current, satisfied clients are often your best marketing resource. Tell them you are actively seeking additional work and ask them if they can think of anyone who might benefit from your services. See if they would be willing to send an introductory e-mail on your behalf. Then, be sure to make a follow up call on your own.
• Join networking groups. Look for the associations who serve your market. Becauase I speak to a lot of association groups, I'm a member of the Illinois Society of Association Executives. This gives me the opportunity to connect with meeting planners who I might not otherwise meet.
• Always have a business card with you. I met an association executive at a Christmas party two years ago, shared by business card with her, and just facilitated a meeting for her last week. You never know how Christmas Charades may end up helping you get a job!
• Hire help. Though essential, marketing is time consuming and can be expensive. And I find that I'm so busy providing my services that marketing often drops to the bottom of my list, even though it should be one of the most important. When deciding what services to outsource recently, I noted this discrepancy and budgeted enough to hire a marketing assistant. Though I can't afford as much of her time as I'd like, I at least know I have someone working on this on a regular basis for me. As my business continues to grow, I hope to be able to increase my assistant's hours.

How have you handled the need to market yourself while trying to juggle all the other responsibilities of being an entrepreneur? Hit the comment button and let us know!

Lazy Days

Ahh...the last days before schools starts. As an at-home entrepreneur, I long for the regular schedule of the school year. My office hours will once again be predictable and I'll have my office back after sharing it all summer long. And yet.

In the hustle and bustle of the work world it's easy to lose sight of why I left the corporate work environment to begin with. I wanted to be available to my children. I wanted them near me. I wanted to hear about their school day, have the chance to know what's on their minds, etc. Like many at-home entrepreneurs, however, I struggle to balance client needs with kids' needs. And it doesn't seem to get any easier.

This week, I plan to do only the minimum amount of work so that I can drink in the last days of summer with my kids. If yours are school age and headed back to the classroom soon, why not join me? There's plenty of time for work. But the days and hours with children pass swiftly and I don't want to miss any of it. This week, I'm reminding myself why I choose to work at home to begin with. And then I plan to hold fast to this regained knowledge throughout the school year as we move from the lazy days of summer to the potential of fall and all that it brings. That's one of the great things about being my own boss: I can set my own priorities and take a break when I--and my family--need it most.

As you consider the transition from summer to fall, what's the one thing that would make the biggest difference for you if you were to do it? Let me know.

Back to School Heaven

Back-to-School time is my favorite as an entrepreneur. I've been going crazy at the sales and have restocked my office with inexpensive supplies. I've picked up spiral notebooks for a nickel, highlighters for a quarter a piece and red pens (every editor needs lots of these!) for just pennies. Though I don't need all of these items right now, I try to anticipate my needs for the upcoming year and then purchase accordingly. Heres' how to save money for your business too:

• Be alert for savings in every store you shop in over the next few weeks. I've noticed that there's not one BEST place to shop but that every store offers something inexpensive.
• Peruse sales flyers. This helps you know how much you can expect to pay.
• Be willing to shop at more than one store. Though I don't usually make multiple stops to complete my shopping, I did make a list of which stores had the items I needed. Then, when I was scheduled to shop at each of these stores, I was ready to do so.
• Watch for unexpected savings. Though we purchased sprial notebooks at one store for 50 cents each, I picked up another dozen when I found them unexpectedly for 5 cents each.
• Look for rebates. I've been thinking about purchasing vocie recognition software for a couple of years now. Today, I found it for half price after the mail-in rebate. That was incentive enough to buy it. Not only did I save money, but when my kids go back to school, I'll have the time to learn how to use it.

Shopping at back to school sales has become an annual tradition for me. If you haven't started saving for your business this way, consider doing so. I know I've saved lots of money over the years. And, when my kids are getting new supplies for learning, I'm getting new supplies for earning!