When you , you join millions of other business owners hoping to materialize their dreams. However, navigating the murky waters of self-employment can be challenging, especially during the early stages.
While there are no guarantees in business, there are some strategies that could increase your chances of success, especially financially. Here are a few mistakes to avoid as a self-employed person.
1. NOT DELEGATING OR PRIORITIZING
Self-employed people often act as their own stunt doubles in their business during the incipient stages because of budget constraints. However, trying to do it all on your own may be a mistake, says Ronne Brown, owner of Girl CEO and Herlistic in Washington, D.C.
91裸聊视频淲e have to understand that we go fast by ourselves, but we go far as a team,91裸聊视频� she says. For people who feel they can91裸聊视频檛 afford to delegate, Brown says to keep your expenses low until you can afford to do so.
If you do decide to delegate, it91裸聊视频檚 key to spend your dollars in ways that help your business grow. To do this, people should consider focusing on the business operations and systems versus just aesthetics, Brown says. Doing this effectively often requires prioritization.
91裸聊视频淚n the beginning, people are always focused on the look. But that91裸聊视频檚 not what truly creates the income in business,91裸聊视频� she says.
Brown suggests prioritizing bookkeepers and accountants, building automations or hiring someone to generate leads. Also, keep in mind that you can usually deduct the cost of contracted labor from your business taxes.
2. NOT SAVING FOR RETIREMENT
Saving for retirement as an entrepreneur can easily fall to the bottom of your priority list. This is a common mistake self-employed people make, says Preston Cherry, a certified financial planner in Green Bay, Wisconsin. While it can be smart to reinvest income you generate into your business, it may be equally important to build an emergency fund with three to six months91裸聊视频� worth of expenses and invest in your retirement savings.
Cherry says self-employed people have multiple retirement savings accounts to choose from, including an IRA or a solo 401(k).
91裸聊视频淣ot only are you as a business owner saving for your retirement, you are also getting to deduct the contributions (for) tax planning as well,91裸聊视频� Cherry says.
Contributions made to traditional solo 401(k)s and traditional SIMPLE IRAs can provide tax advantages like lowering your taxable income and enabling your investments to grow tax-deferred. That means your tax bill is deferred until you withdraw the money in retirement.
SEP IRAs are designed for self-employed people or small businesses with few or no employees and have similar characteristics.
3. SPENDING MONEY ON COURSES YOU DON91裸聊视频橳 TAKE
As a new entrepreneur, you may want to amp up your knowledge to make your business more profitable. That could mean spending money on courses or training, which can sometimes cost a pretty penny. While investing in yourself can be worthwhile, you may not get a return on your investment if you don91裸聊视频檛 take the courses and apply the knowledge.
91裸聊视频淢ake sure that you are fully committed and that you are dedicated to actually doing the work and sitting down and making time before you invest in any course or class,91裸聊视频� says Brown. 91裸聊视频淵ou can91裸聊视频檛 have excuses. People buy stuff with an excuse in mind.91裸聊视频�
Brown also recommends doing your homework before investing in a course, especially on social media. You can do this by looking beyond good content and ensuring the person you91裸聊视频檙e buying courses from has a proven track record of delivering results.
91裸聊视频淔or me, when I91裸聊视频檓 looking for a mentorship or I91裸聊视频檓 looking for people to train me, I91裸聊视频檓 looking at the personal success that they are having in the area that I am looking to grow in,91裸聊视频� she says.
4. NOT CONSIDERING HEALTH CARE COSTS
Health care may be a worry for self-employed people, especially when they don91裸聊视频檛 have employer support. A health savings account is one way to make the financial load lighter since there are many tax benefits.
91裸聊视频淭here91裸聊视频檚 no tax going in. There91裸聊视频檚 no tax while in it, and there91裸聊视频檚 no tax coming out,91裸聊视频� Cherry says.
With HSAs, contributions are made pretax, interest grows tax-free and qualified withdrawals are tax-free. In 2024, single individuals can contribute up to $4,150, while families can contribute up to $8,300.
You must have a high-deductible health care plan to be eligible to open an HSA as a self-employed person. Another option to make health care more affordable is taking the self-employed health insurance deduction if you qualify.
5. NOT HAVING A CLEAR 91裸聊视频榃HY91裸聊视频�
Entrepreneurship can be a way to make extra money or materialize your dreams, but it can also become a money pit. For this reason, it91裸聊视频檚 important to have a clear 91裸聊视频渨hy,91裸聊视频� Cherry says. Having a clear purpose can also help you know when to keep pushing through difficulties and when to stop.
91裸聊视频淓ntrepreneurship is not for everyone. It91裸聊视频檚 not supposed to be. It91裸聊视频檚 not the only way to wealth.91裸聊视频�
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