Wednesday, 3 April 2013

Self-Employment: How it Works (or Doesn't!)

(awesome print by Popcorny, we have this on our wall!)

Right, so this post is kind of an extension of my 'Self-Employment Update: Six Months in' post from last week. It's most likely only going to interest people who feel they might like to be self-employed/free-lance, but you never know! I, for one, am always intrigued to hear about other peoples' lives, even if they aren't doing something I'm directly interested in doing myself (which is probably why I love Tilly's 'A Day in the Life Of' series of posts as much as I do; I seriously think they are some of the best stuff on the internets!).

So please believe when I say that I'm writing this post very far from the perspective of an 'expert' at self-employment, or as someone who is even doing it very successfully. But I do think that sharing some of my experiences and thoughts on this subject will be useful to someone considering venturing into creative self-employment specifically, and perhaps some other kind of self-employment or free-lancedom more generally.

Our Situation

I think it is important to explain that both myself AND Pat (Mr So Zo) became self-employed around the same time last year. Therefore our experience might be very different from someone who has a salaried partner/financial dependents/is single. I bring in income from a variety of sources (see last post) but Pat is a writer who works with one single publisher.

How it Works (or Doesn't!) Financially

It may be considered vulgar (like as a hangover from the 50's or something!) to discussed finances, but I can't really give a thorough picture of life as a self-employed person/couple without addressing the subject. Obvs I'm not going to go into figures, but here's how the income arrives:

Me:

  • Most of my income presently comes from teaching sewing and pattern cutting classes. I don't teach regularly, my schedule is mixed. A few weeks could go by with no classes, or I could find myself teaching three or even four times a week. I invoice Sew Over It for my teaching every week or two weeks worth of work. I use eventbrite to organise my profits from classes I organise and teach at Super+Super HQ. 
  • A few days after each Brighton Craftaganza event I organise I pay any outstanding invoices and calculate the profit I've made. These bursts of income are obviously as regular as the events themselves. Plus, the amount I end up with has a lot of variables, the main one being whether it was a one-day or two-day event (not as simple as two days being double the profit!). The profit I get from organising these events may be quite little compared to the amount of hours I put in, but the amount always makes that month a bit easier!
  • I get a small amount of income from the selected sponsors of this blog. 
Pat:
  • Pat completes a title approx. every six weeks/two months. When he finishes a title he can invoice for an advance. 'An advance' sounds very impressive, but isn't really unless you are Stephen King or something. Presently it compares to about one month's wages from his old shitty job in telesales. 
  • Occasionally he is asked to do a small amount of work for other titles, like writing the introduction or something. This will be for a small one-off amount. 
  • The books then take a whole bunch of months to be released. The ones he wrote all the copy for will then earn him royalties after the advance has been recouped. Obviously depending on how popular the title becomes but also how the book distributors have been dealt with, the monthly royalty cheques could be the equivalent of several month's worth of of shitty telesales wages or a small fraction of it!
As you can imagine (or maybe relate to), it can be difficult when we are both having 'lean' months. But when either of us are having a flush time, I employ a very important technique: squirrelling. As you may imagine from the name I have given it, squirrelling involves taking chunks of money to distribute into other (less accessible) places for the future. When I was a waitress getting paid in cash at the end of the week and receiving my tips in coins at the end of each shift, I literally had a multitude of envelopes, boxes and drawers to squirrel money away in. These days I have four active bank accounts for the purposes of squirrelling. It makes me feel secure knowing there are a few 'pads' of money around, even if I've been allocating some of it for a holiday or something. 

But there has been some scary patches since we became self-employed. Plus if your partner is going through a lean period, the urge can be to step up your own earnings, but that isn't always possible and can lead to extra stress. Likewise, knowing your own contribution is way down can make you feel guilty and stressed in a different way! Sometimes it feels like you really can't win. But when you do have a good month, knowing that your creativity and skills are solely responsible for that makes it all the sweeter and more exhilarating. As scary as it can be not knowing if your bills will be covered next month and as messed up as my sleep pattern can get because of it, NOT having the safety net of a dollop of a set salary to expect at the end of the month makes me feel much more alive, and somehow more adult. I feel like I'm participating in life more somehow. 

In My Experience... /Points to Consider 

There are some other points to make and lessons I've learnt over the last six months that I'd like to mention that could be relevant if you are trying to decide whether or not to quit your day job:

  • Pat and I comparatively don't have much in the way of overheads, no loan repayments or credit cards to pay off. We don't have a car to run or keep taxed and insured. 
  • Pat works entirely from home or a local cafe with good wifi, therefore his transportation costs are zilch. My work locations are more mixed. I work from home or Super+Super which is in walking distance. When I work in London the classes are always at weekends or in the evenings so my train fares (which can be extortionate in the UK) are always off-peak fares so I don't have to work for very long before I've recouped that outlay. 
  • Recently we moved into a bigger (and therefore more costly) flat, even though we have chosen to live in one of the most expensive areas of one of the most expensive countries you could pick to live in! We made that decision because, seeing as both of us work from home at least some of the time, it was going to be better for our mental health to have some more space. Our new place has a little separate room that is now my sewing studio. To afford and justify this I no longer have a desk space at Super+Super HQ, which was a hard decision to make because I love those peops so much. But I found I wasn't using that desk space as often as I could've and it was being used in part as very expensive storage for my sewing patterns and laptop! Nowadays we can work in effectively the same room but he's at the other end so my sewing machine and swearing don't disturb his concentration as much as they used to! Plus our living room and bedroom aren't filled with bags of fabric constantly in sight like the last flat we lived in had become. 
  • Going back to finances, although this of course makes sense anyway, being self-employed makes it particularly essential to have a clear idea of how much is in your bank account/s at all times! You have to either keep in your mind (which I am good at) or check regularly (which Pat has taught himself to do) what work you've completed, who you've invoiced and when you can expect to get paid. 
  • Similarly, you need to keep a eye on when big outlays are looming. Whether that's something big and scary like your self-assessment tax bill, or a bi-annual utility bill, or something fun like a holiday or trip to visit friends you've planned. It helps you assess exactly how flush or lean things currently are and theoretically helps you get prepared. 
  • Keeping an eye on how much work is coming up in the near to mid-future is a good idea too. If I know I've got a whole bunch of classes coming up for example, can help me decide whether or not I need to release some squirrelled away funds in the meantime or not.  
  • This may be controversial, but unless you're running a business that relies on a long term business plan for momentum, I would suggest not to stress or even bother thinking about anything say, six to nine months or more into the future. Crazy I know but I think it just a waste of time. If there is anything that life taught me last year is that it can catch you off guard and throw up all kinds of potholes, but also exciting opportunities. Plus you'll naturally do some evaluating at regular intervals, so why bother to plan deep into the future when it may become clear that one element isn't working or you want/need to change tack from the path you'd previously set yourself on?
  • There are HEAPS of awesome resources out there to help a self-employed person, be they of the crafty persuasion or not! Red Velvet has a lovely, inspiration e-course for carving out your dream creative job. The Design Trust is a killer website for aspiring self-employed designers/designer-makers, I well recommend signing up to their newsletter. Anyone who works from home could find support, advice and inspiration from this site, following the site author @judyheminsley on twitter is a good idea. 

24 comments:

Carolyn said...

These posts are really interesting to read- even though I'm not self-employed or planning to be in the near future-- I feel like I'm squirreling away this info into my brain for possible future use.

By 'titles' do you mean entire books? Because that's kinda crazy (in a good way) if Pat writes one every 2 months!

Anthea said...

I really like reading your posts about self-employment.

I'm impressed how you and Pat are coping with all the things that comes with being self employed.

Helen said...

I too find these really interesting. I'd be interested to know (if you don't find this rude of me to ask) how you plan to fit Childcare into this? After our mortgage, Childcare is our second biggest overhead, and it's not far off the mortgage tbh! And I find that so scary, as if I lost my job, I know I'd NEED to make enough to cover that, or I would not be able to work at all, which we can't afford either. I hope that's not rude, I'm just always intrigued to discover how others make things work! (So I can figure out if I'm going wrong somewhere!

I am jealous tho that you both get to do exactly what you want, and you can more or less make it work for you!

redpointtailor said...

Thanks for sharing your experience. I had long ago my own company and I worked from home - unless I had to go onsite (I organised courses, workshops, congresses, etc. - long, long ago). I loved (and still I love) work at home. Since I have moved to the NL I have regular job however few last days when I was working home (sewing and making jewellery) I realised how much I miss working for myslef, at home, doing what I love. So step by step I am going in the direction of self-emlpoyment - own company - working for myslef. I know it is not easy and costs a lot of time and efforts - but you get so much energy out of it.... SUCCESS!

cucicucicoo said...

this is fascinating! i am slowly trying to work towards working from home, though it is tough going because with my kids i have very little time. thanks for this post! :) lisa

Stevie said...

Really good post Zo! I've been on casual work for over six months and I really hate it. I've thought about going self employed but having the capital to do it can be tricky. Thank you for your really honest assessment. Its got to be tough on those lean months but I think after a while you guys will find a great balance! x

Kestrel said...

Thanks Zoe, this is really interesting to hear your experiences and about the reality of self-employment.

Sewing Princess said...

Thanks for sharing your experience. I think a sound financial management, e.g. squirrelling is paramount no matter if you are self-employed or not. I keep track of all my expenses and budget money for each expense area (utilities, transport, mortgage/rent) to make sure I don´t overspend. And credit card for me is just a means of payment...I never use the credit function to avoid getting in debt.

katherine h said...

This is a fabulous post! I have been wanting to know how the financial side has been working out for you, and I think that many contemplating self employment will appreciate your honesty. Good luck keeping it all going! Sounds like you are planning well.

Reana Louise said...

What a wonderful, honest post! So interesting--thank you for sharing x

johanna@projects by me said...

Thanks for sharing how self-employment is working out for you. It is interseting to know how you think and make ends meet. I could never be self-employed, too much of a scaredy-cat. I have a question though, about the financial situation comping up, how will it work when you have the baby? (If I may ask?) Here in Sweden we have a kick-ass system with a financial support system when you have a baby or you have to stay at home with sick kids, the state pays! :) How does it work in the UK?

thesecretlifeofseams said...

Thanks for sharing this insight into your (and Pat's) working life. It's really interesting to get more of the brass tacks side of it because creative self-employed bloggers often seem to present a slightly soft-focus version of their work, which isn't a bad thing, this is just a slightly different take on it.
I feel like being self-employed takes a lot of self-discipline and mental strength though!

Sewing Sveta said...

Zoe, thank you for this very detailed post!

gingermakes said...

Interesting! I'm really enjoying these posts! It's clear that there's a lot more that goes into self-employment than immediately meets the eye, but it's all very mystifying! Thanks for shedding some light on how this works for your family.

chris said...

I'm self employed too, similarly I teach sewing classes and sell online. Childcare costs can often cause me to take on less work though. As sometimes it makes more sense to mind my kids myself instead of working only to have enough to cover babysitting and travel costs! It's a constant juggling act really. As my children get older, I'm starting to take on bigger projects like some recent costuming. Thanks for sharing - it's interesting to see how others find self employment :)

EmSewCrazy said...

Thanks for sharing! Such good tips. Especially the one about not planning so far ahead into the future. You're right. Life changes rapidly and new plans need to be thought of.
Keep up the good work!

Adrienne said...

Cool! Thanks for all the wonderful advice and resources at the end. Look forward to looking into that!

Scruffybadger said...

Thank you so much Zoe for this really illuminating post. Really interesting and thought provoking. I'm so glad it's working out for you and Pat. You are model self employees :-)

Sarah said...

Thanks for taking the time to share your journey! I love reading these types of posts as I would like to take the self-employment leap at some point and thanks for the links at the end too x

Lovenicky said...

Thanks so much for this post. I find it very interesting. I'm thinking about self-employment in a few years when the kids are in school full time. I see from your post that it takes a lot of good organizational skills and discipline to make it work. I look forward to more news from you regarding this topic!

Anonymous said...

Thanks for mentioning my blog Work from Home Wisdom and my Twitter account, Zoe, I appreciate it :-)
It's great to read an article that's so truthful about the reality of self-employment and working from home.
For me you hit the nail on the head when you say you feel more alive being self-employed. There is a huge sense of achievement and fulfillment in it I never got from any job, and I was lucky to have some pretty nice ones.
Working from home is a dream for many people now, and with my blog and tweets I share the good, the bad and the ugly!
Readers contribute their own experiences and share photos of their work spaces so if you're having a bad day you know someone else has been there!
And there's plenty of inspiration too from people who are ahead of you on the journey.
Good luck, Zoe, and I'd love to see your sewing studio if you'd like to share on my home office gallery :-)

Anonymous said...

Thanks for mentioning my blog Work from Home Wisdom and my Twitter account, Zoe, I appreciate it :-)
It's great to read an article that's so truthful about the reality of self-employment and working from home.
For me you hit the nail on the head when you say you feel more alive being self-employed. There is a huge sense of achievement and fulfillment in it I never got from any job, and I was lucky to have some pretty nice ones.
Working from home is a dream for many people now, and with my blog and tweets I share the good, the bad and the ugly!
Readers contribute their own experiences and share photos of their work spaces so if you're having a bad day you know someone else has been there!
And there's plenty of inspiration too from people who are ahead of you on the journey.
Good luck, Zoe, and I'd love to see your sewing studio if you'd like to share on my home office gallery :-)

Jen said...

Zoe,I love this post!!!

I quit my awful job and have been 'self-employed' for a week now. I've reopened my Etsy shop but am very much in a transitional phase, trying to figure out what to do with my life.

This is such an inspirational post - thanks so much for sharing! I too love reading this kind of thing :)

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