This Friday marks one year since I walked away from my career to become self-employed. I can’t believe it – it seems like it’s only been a few months! I’m taking some time this week to reflect on where I came from, where I am now, and where I hope to go from here.
Yesterday I shared some of the circumstances that led me to quit my job and become self-employed. When I look back at the post where I confessed that I had put in my notice, it’s kind of funny to note the reactions. Most people were like, “Yeah, good luck with that.” And they were probably thinking, Wow, you’re going to crash and burn, dumbass. To be honest, I doubt anyone thought that as often as I did!
The first two months of 2012 were great. I had a bunch of freelance writing jobs, I was selling ads like crazy, and I didn’t have to touch my emergency fund. Then March came and the great Google PageRank slap happened. I won’t spend a ton of time talking about it because plenty of other bloggers have already done so, but my site was one of the “lucky” ones affected.
The penalty dropped my PageRank to zero, which made the site look spammy and low-quality to advertisers. I lost a ton of my freelance jobs because the site owners were (understandably) afraid to be connected to a site that had been penalized. Basically, my income disappeared almost overnight.
As if that wasn’t a big enough kick in the face, I couldn’t find a job to save my life. I filled out nearly 400 job applications and did not receive a single callback. As the weeks passed, my emergency fund evaporated at a disturbing rate. I didn’t want to take on more freelance work in case I actually did get a job because I knew I wouldn’t be able to keep up with the workload. It was a yucky situation with no good choices, and I started thinking maybe I made a mistake.
Remembering Plan B
One night a friend asked me to make a cover photo for her Facebook profile. Afterward she tried to pay me for it, and I told her, “I might be broke and jobless right now, but I’m not desperate enough to take your money.”
“But what about Plan B?” she asked. “Remember, you were talking about charging for design work if freelance writing didn’t pan out.”
Oh yeah, that’s right…. The funny thing about my coding and design skills is that I forgot I have them. It’s kind of like learning to read – once you do it long enough, you forget that not everyone can. Still, it felt weird to charge my friend for something that only took a few minutes, and I refused to take her money. But I did get serious about planning a web design business.
I cringe when I think back to how little I charged for my work in the beginning. I didn’t have a lot of choice – I didn’t have a portfolio and no one knew who I was; I had to
bribe convince my friends to be my guinea pigs. Then as outside work started coming in, I felt guilty charging strangers more than I charged my friends. I ended up stuck in a cycle where I had to take on more projects than I could handle in order to pay my bills. Sure, it was stressful, but I was just happy to keep getting work.
The Business Becomes a Real Business
I have spent the last 8 months in a state of perpetual motion. Working on projects with clients. Redesigning my business site from the crappy one I put up in the beginning to the rather gorgeous creature it is now (pats self on back). Adding web hosting to the list of services I provide and moving servers to keep up with the growth – twice! Implementing systems for billing, quotes, and accounting. Filing LLC paperwork. Planning ahead. Debating whether to hire a virtual assistant. Napping occasionally.
I have worked with some of the most delightful people on the planet. I absolutely love watching someone’s idea turn into reality. That said, I have also worked with some people that made me want to pull out my hair. I have learned more on the fly than I ever could have learned in other circumstances. And every experience, good or bad, has taught me a LOT about working for myself.
During the course of all the chaos, Nuts and Bolts Media transformed from a single mom trying desperately to remain self-employed to a real business with expenses, accountants, and disclaimers (run by a single mom trying desperately to remain self-employed). I’ve been very cautious not to expand too quickly, and my business is still very much a one-woman show, but it is completely different today than it was when I started.
One Year Later: Where I Stand Financially
Self-employment has been amazing, but it has definitely wreaked havoc on my finances. Especially since my carefully saved emergency fund was KOed within the first few months! But since this blog started out about money, it only makes sense that I discuss that a little bit.
As of today, I have made $24,000 this year after taxes. That doesn’t sound like a lot, but consider my 2011 post tax income of $19,800 from my full-time job (not counting my online income). Oh yeah, that’s how bad the paycheck situation was. And don’t forget the fact that I had at least two months with no income at all. The great thing about living in a low COL area is that $24k in my pocket isn’t too bad – I only needed about $16k to cover all my living expenses.
The biggest adjustment for me has been the irregularity of my income. As I write this post, for example, I’m at 110% of my income goal for December and it’s not even halfway through the month. However, with Christmas coming up, I could very well go 2 or 3 weeks before I make anything else. I cannot stress enough how important it has been for me to allocate every dollar responsibly.
That means using credit cards again, but only for my personal and business expenses (NOT shopping!). Then making sure I move enough money into the appropriate accounts to pay the cards off each month. That means taking money away from myself as quickly as I earn it, just in case I hit a dry spell for a few weeks. I’ve earned enough for a few luxuries here and there, and I definitely haven’t gone without anything I needed, but I have to be aware of my finances at all times.
I’ve made very little progress in paying down my remaining debt (my car loan and student loan) this year. I deferred my student loans last fall when my paychecks were crazy and I’ve opted to leave them that way until things are more stable. I had to cut back to the regular payment on my car loan instead of the huge overpayment I was making before. (The balance is down to $7600, though. Yay!) I also sucked at contributing to my Roth IRA this year; I only saved about $1000.
While I’m not thrilled with my financial progress in 2012, I can’t help being pleased that (1) all my bills were paid, (2) I haven’t taken on any new debt, and (3) I still saved money despite the circumstances. All I can do is push myself to do better in 2013.
The State of the Whitmer Household
One year after I left my job to become self-employed, I look at my life and wonder how all this is possible.
I spend all day doing something I love. I’m finally able to be home with my son and his grades have improved dramatically. I get stressed, but not on the same level as before. I have so much to be thankful for and I try not to take this experience for granted.
Even before my last day at my former job, I seriously doubted my ability to remain self-employed for an entire year. I knew I was willing to work hard, but I still didn’t have much confidence that I could accomplish anything like this. I pictured myself trying really valiantly, then admitting defeat and slinking back to a job as a therapist. And at the time, I was okay with that – I just needed to find out for myself if I could do it.
Today, my attitude has changed. While I am always aware that my business could fail at any time (knock on wood), I don’t doubt my capabilities like I did before. I don’t wonder whether I’ll be able to handle the chaos because I know I can. And while my goals for 2013 will still include “remain self-employed for a whole year” like they did for 2012, there’s so much more on the list.
I appreciate all of you for allowing me this slightly self-absorbed walk down memory lane… No matter what comes next, I never want to forget where I came from, and I can’t wait to find out how far I can still go. Tomorrow I’ll share some of my plans for myself and my business in 2013.