October 2023: everyone hail to the pumpkin song
A very special entrepreneur-focused newsletter.... this house is handing out full-sized business money guides!
Hello friends!
Happy spooky (or as my 3 y/o says, “smooky” — please don’t tell her otherwise because it’s too cute, and also she will definitely fight you about it) season to all who celebrate!
This newsletter is a lil different because it’s about the hallowed magic of entrepreneurship. As a special treat, it includes a super sweet free resource that can help entrepreneurs (and those who love and support them) to think about business money in a whole new way. I’ve also got some musings on entrepreneur best practices (most of which are based on mistakes I’ve made and seen), and the tricks and treats of this particular way of doing business.
(If you’re like “shut up and give me the candy,” just skip down to the Cash Flow and Grow section and start clickin’.)
Where it started
As you may know, I was invited to speak on an entrepreneur panel a couple of months ago (hi, Eat the Elephant friends, you are my muses this month!). And I couldn’t get a few of their questions out of my head.
The question that haunted me the most: how do you know when you should invest in growing your business?
This is a tough question to answer on the fly, because it’s intensely situation-specific and relies on a few different variables: how much you’re making, what your expenses already are, what you want to invest in, and how much risk you’re carrying elsewhere. And I didn’t want to give an “it depends” answer without being able to tell you what it depends on.
I’d like to think I had a few insights to offer that night, but I went home knowing I had more to say. I started writing notes and playing with spreadsheets… and I called my dear friend Kendall.
Kendall is a brilliant, badass businesswoman who is also probably the only dolphin-trainer-turned-bookkeeper you’ll ever meet. She is the founder and CEO of IQ Bookkeeping, and we have been nurturing a friendship and collaborationship ever since we discovered a shared love of Brené Brown while watching our kids play at the neighborhood pool a couple years ago. (If you were at ETE, she was the gorgeous blonde in the pink “On Wednesdays, We Smash The Patriarchy” shirt.)
Kendall and I are both incredibly passionate about supporting our fellow entrepreneurs, and with our powers combined, we’ve created something special here.
Cash Flow & Grow
“Cash Flow and Grow” is a guide tailored to newer entrepreneurs who don’t personally have a bookkeeping/business financials background. It provides a simple, straightforward way to evaluate your business finances to confidently make investments for your business growth… without taking on unnecessary risks or overextending yourself.
You can get the guide by clicking this button:
Request access, and we’ll grant it to you ASAP (you’ll be notified when we do).
Once you have access, you’ll find the Cash Flow and Grow Guide (PDF) & Calculator (Google Sheet), and a tutorial video walking you through the calculator.
The files are locked for everyone’s safety, which means that you need to click “File” and then either click a) “Make a copy” of the Google Sheet and save it to your own Google Drive, or b) “Download” to save it as an Excel spreadsheet.
If you have any technical issues with any of these steps or with using the guide itself, please email jenny@fortunamoney.com and I will help you out!
Tricks and treats of the trade
I used to joke that I didn’t have an entrepreneurial bone in my body. I laugh about it now, because ever since I realized that the only way to do what I really, really wanted to do, all the time, was to build my own business… I’ve been lowkey in love with entrepreneurship.
It’s full of passion, possibility, creativity, and connection. It’s thrilling and energizing and most days I find myself thanking my lucky stars that I get to run my own business. I’m sure there’s some new relationship energy at play, but it’s been two and a half years and I’m only getting more excited about what I do here, so I think this is a love that’s built to last.
That being said, like any relationship, it takes work — and not just “this is my job, yay!” technically-counts-as-work, but administrative, grinding, frustrating things that go bump in the night.
And being overall financially secure doesn’t insulate you against that. I have to do the frustrating stuff too, even though I am in a privileged position thanks to a combination of wildly unearned blessings and careful choices. Thanks to this, my household is in a position where I can build my business slowly, in a way that’s aligned with my values, and without tremendous financial pressure to succeed right away. I know this is not where everyone will start, and that’s part of why I’m so passionate about helping entrepreneurs — both by helping you shore up your personal financial lives to absorb the increased risk of having your own business, and by sharing good practices that can help you with your business. (Some of which are based on lessons I learned the hard way!)
Things I learned in the first couple years
A key truth of entrepreneurship, that I say all the time:
Just because you are good at doing a thing, does not mean that you are good at businessing that thing.
This means that you might be the most magical photographer, dog trainer, flower farmer, life coach, yoga instructor, freelance writer, or interior designer in the actual universe (and if you are my client and you are one of these things, know that I do in fact believe this to be true about you, please don’t argue with me, xoxo).
But being an absolute genius at your calling does not automatically equip you with bookkeeping, marketing, sales, advertising, brand strategy, web design, IT, social media management, or tax strategy skills (or any of the other random skills you might need to business your business successfully).
This does not mean that you are a bad entrepreneur! It, in fact, means you are extremely not alone. These things are (to some extent or another) often required to run a business, but they are not inborn gifts like having perfect pitch. These are actual skills and expertises that people must acquire through education and many hours of experience. You might start out with a knack, but even a knack needs refinement.
However, you may also not yet be in a position where you can afford to outsource those things yet. (Or you might not know if you are — in which case, I refer you to the Cash Flow & Grow guide!) You also might be struggling to prioritize where to invest your time and/or your money, or even where to begin.
It’s ok to start small (and free!), and put pieces in place that will support you growing more easily later. Here are a few low-cost things that I encourage my entrepreneur clients to do, and that I did/do myself (or realized later that I should have done… oops). It’s more about mindset and how you think about your business, and less about “hacks,” although there are action steps. So here you go:
Give yourself a long runway before takeoff
If at all possible, give yourself a “both/and” period to build up speed, where you build your business while relying on a separate source of financial support before your business needs to be your main source of financial support. This will give you significant freedom to maneuver (and may save you a lot of money if it means you get to keep access to employer benefits).
I highly recommend knowing the ins and outs of your personal monthly money before you make any changes, which might look like:
keeping your full-time job and work on your business in your off-time
cutting back on your hours at your main job to do a part-time blend of both
relying solely on your partner’s income while you’re in the building phase, changing your household spending if necessary
self-funding a sabbatical period by saving up enough money to take a hiatus from your day job
I would not be doing my job if I endorsed using debt to finance your life while you build a business, although I know that’s a popular choice that’s heavily normalized in the entrepreneur world. Here at Fortuna Money, we’re all about reducing your risk and stress so you and your business are in a position to thrive. There are many ways to bet on yourself that don’t involve borrowing money to keep your lights on — and if you’re here, I know you’re not afraid to do things the wise way, even if it’s not the easy way.
If you only do one thing on this list: keep your business and personal money separate
Begin separating your business and personal finances early on. This can be done without spending any money, and will pay off in peace of mind.
You should have a separate checking and savings account to keep your business money in and pay business bills out of, and (if desired) a credit card that you use only for business things (and pay off in full every month).
If you get stuck here because you or your bank feel like your business isn’t “real” enough yet, it’s perfectly fine to use accounts that are technically branded as “personal” accounts, as long as you dedicate those accounts solely to business use; you can change things later if needed. We want to treat your business like a business, which means not mingling your personal and business money. If you are a sole proprietor/single person LLC, the IRS will legally view you and your business as the same thing, but this does not mean you should do that. You will thank me for this come tax time, but also probably sooner than that. Speaking of which…
Set aside money for taxes, even if you’re not sure you will actually need to pay them
If you are a new entrepreneur who hasn’t yet cleared the threshold for paying estimated quarterly taxes, the prevailing wisdom is that you should set aside about 30% of your net business income for taxes, to be on the safe side. (You will owe 15.3% on your profits just to cover your Social Security/Medicare contribution; the rest would technically depend on your household tax bracket and situation.)
We talk about this in Cash Flow & Grow a bit, and in our calculator you can change the set-aside percentage to reflect your risk threshold, but I’m foot stomping it here because it’s that important. I was a VITA tax volunteer last year and saw too many people earning self-employment money who got absolutely hammered by self-employment taxes that they had no idea they would owe.
(Note: your best defense against this is tracking your income and all your expenses, so you are only paying taxes on your true profit. A CPA will be able to help you with this as part of preparing your regular taxes, but their job will be made much easier if you’re doing the tracking already — or paying a bookkeeper to do it — and keeping your business money separate.)
In practice, this means that if your side hustle revenue was $1000 this month but your expenses were $200, you made $800 in profit. Of that money, you should set aside $240 (not $300 - remember, you’re just paying taxes on profit) in a separate savings account to hedge against owing the tax man. Depending on your individual situation, you may not wind up needing to use it (like if your household refund is big enough to cover what you owe). If that happens, you can treat it like a self-paid business tax refund, or keep it set it aside for future taxes.
Professionalize what you can afford to
Opt for professionalization, even if it’s low-cost professionalization.
You don’t necessarily have to pay for a full Google Workspace with your domain name, but you can make a “mybusiness@gmail.com” address instead of using your regular personal email. (This will also help you stay organized; not doing this initially was one of my regrets!)
You don’t have to opt for a paid website package, but make the website you do have look clean, and get your most grammatically-particular friend to proofread it. (If you don’t have that friend, I can send you referrals.)
You don’t have to opt for a payment processor if you really can’t afford the fees, but the time and stress I save in exchange for letting Square take their percentage off my invoices has been amazing. (I’m not saying Square is who you should use, just that they’re who I use — you need to use the best option for you.) I also don’t think it’s a coincidence that my business experienced explosive growth once I introduced that process. There was a major confidence shift for me in doing that: it helped me feel like I was truly a “real business,” and I started acting more like it.
Build your “board of directors,” even if it’s just in your head
I’ve been unbelievably lucky to have amazing people in my life who are willing to proofread, offer brass-tacks business advice, gut-check a decision, and serve as sounding boards for thorny problems. These people don’t have to be your best friends or family or your “I will follow you off a bridge” fans (although it’s amazing if they are any or all of those things) — they should be people who are smart, skilled, thoughtful, and not afraid to tell you like it is, even if it’s not what you want to hear.
Seek those people out; tell them how much you value them; show up for them in return however you can. Despite what some internet strangers will tell us, community doesn’t have to be commodified. Which reminds me…
Manage your inputs
If you enjoy getting business advice from influencers, authors, coaches, or other internet strangers, don’t just think about their message: think about them. Before you follow their advice and enter a “post every day to build your presence” or “build an email marketing campaign” rhythm, you gotta ask:
What’s their business model, and what’s yours? It’s ok if the specific widget they make or subject they teach is different, but if you’re following someone who made their name as an influencer and you’re interested in leading retreats, you will need to plan your business time and money in radically different ways. (This piece on profitability models will help a lot with that thought process too.)
Does the way they describe spending time/money match up with how you envision running (or actually run) your business? Do you like their business model or does it feel out of alignment with who you are?
I had a consultation call with a couple of coaches two years ago who were running a model based heavily on creating and selling a coaching course to train other coaches to do the work that I knew I wanted and needed to be doing. Although their sales skills were top notch, I checked in with my board of directors and realized that wasn’t where I wanted to be at that point in my business. In the end, their specific model wasn’t aligned with my values and needs, and this clarity saved me a lot of money and time.Do you want to do things the way they’re doing it, at the pace they’re doing it? Are you resourced for “their” way, or is their way “being a nepo baby who doesn’t have a day job or kids but does have a trust fund”? Do you have a philosophical objection to the industries or practices that support their business model?
Ask these questions before you spend time and money applying an internet stranger’s advice. Which brings me to my last point…
Carefully weigh the costs and benefits of business coaching, mentorships, masterminds, and networking groups
There’s a lot of pressure out there to start paying for business coaching, mentorships, and mastermind/networking groups right out of the gate as an entrepreneur. These resources can be incredibly valuable, but they can also be sources of advice that isn’t necessarily a good fit for your particular business or situation. And these programs can often be costly, without guaranteeing a return of any type on your investment. There are a lot of great free and low-cost groups, containers, and resources created by skilled coaches/mentors/entrepreneurs out there, and it’s worth putting in the time here before you decide to put in any money.
I personally went a long time without paying for business coaching, but after a lot of deliberation and research, I’m now in Jessica Lackey’s group coaching program. (This is not even a tiny bit sponsored; I’m just having a great experience.) The business and profitability links above are actually free content from Jessica’s website — the thoughtful, deep quality of her work was a sign that she was the kind of coach I was looking for.
I didn’t just jump into the first coaching program that I’d heard about; I spent a lot of time thinking about this and engaging with the resources that showed me what various coaches were about. In Jessica’s case, that meant reading her newsletters and blogs for months, and attending her totally-free-but-seriously-why-are-you-giving-all-this-knowledge-away monthly Deeper Business Dialogue (links for all that here, if you’re interested).
The timing was such that I used the Cash Flow and Grow tool for myself to figure out whether or not I could afford the investment (Jessica actually reviewed an early draft and offered some incredibly helpful feedback, even before I had committed to being her coaching client; Jessica, if you’re reading this, thank you again!), and I asked myself all the questions in the guide before I took the leap.
So far, I’m really delighted by both the business community and connections I’m finding and the wisdom I’m receiving. I also think that this type of group (a very intentional, course-like structure, which is just what I need) would have been a poor investment for me personally if I hadn’t already put some miles behind me on building my business and working with clients. The reason I’m investing in this program is because I want help with some specific goals for building and growing my business, and I wouldn’t know what those were if I hadn’t done all the things I’ve already done.
It turns out that you have to actually do the thing to get better at doing the thing (ugh, I know). I could have tried to jump the line, but I personally would have had nothing to iterate on if I’d jumped into even a great program like this right out of the gate.
If you’re not someone in a business community or from a business background, it can be useful to pay for professional help in the area of “learning how to business,” which can shorten various learning curves and help you quickly learn best practices that might otherwise take months or years. But coaching, mentorships, masterminds, and networking groups can represent a large cost investment of both money and time, so treat it like it’s a big deal. There may also be a great coach or program or group out there who offers a tier of service that is free or priced for a starter-revenue-level business, but it might not be the first (or second or third) one you hear about. Any time and money you spend on these things, you may not get back, so it’s really important to be in a position where you are comfortable trading away both.
If you’ve read all the way to the end…
… you are amazing, and I hope your coffee/tea/warm drink stays perfectly hot in a way that is almost unnatural, and that you find money in one of your jacket pockets from last winter.
I promise this newsletter isn’t going to be all-entrepreneurs-all-the-time, but if you were into this type of content, tap the heart to like this post — and if you want more, drop me a note at hi@fortunamoney.com with questions or feedback.
And if you know anyone who might enjoy connecting with Fortuna Money, please forward this to them. Nobody should have to money alone!
And if you’re like “I get too many emails, I seriously can’t do another one, even if it’s just once per month,” I am an enthusiastic advocate of unsubscribing from all that does not serve you. You have my blessing to protect your inbox and hop off the mailing list, and I’ll still think you’re the cat’s pajamas.