Secret #4: You Need to Have a Good Grasp on Finances

What is this equation called? a2 + b2 = c2

(Hint — it’s used to identify the length of the sides of a right triangle.)

Well, if you know, more power to you. If not, the answer is at the bottom of this article. And I ask this because in my last article, I talked about overcoming fears of negotiation.

Well, with my copywriting business, I had to overcome my (clear throat) “love” of math.

If you’re like me, math was not your favorite subject in school. You’d pretty much like to be doing anything rather than solving algebraic equations like the one above.

But surprisingly, that all changed for the better when my copywriting business took off. And this brings me to my last secret in this series:

You need to have a good grasp on finances.

While math might not be your strong suit (especially as a creative writer), there are certain aspects of it that you need to learn to run a successful copywriting business. After all, if you can’t manage your finances correctly, your business is doomed (and how are you going to know how much money you are really making?!).

“But Melanie, I can just hire a CPA or money manager to take care of everything for me!”

Sure you can. But, you’ll probably pay a lot in service fees and not really know where your money is going. Plus, if you have a good grasp on your finances, you can work less, negotiate higher fees, and simplify your life.

How?

Review your current status.

If you don’t have a budget set up, it’s time to review your current situation. Use a simple, Excel spreadsheet or Word table and write down all your expenses each month. Then, write down all the money you have coming in each month. Subtract your expenses from your income.

Are you left with oodles of cash? If so, you can stop reading this article (No, just kidding.)

Not too much spending money left?

Well, you’re not alone. Most people are living paycheck to paycheck or have a minimal amount left over each month for savings and spending.

According to a recent study by The Federal Reserve Board, “Nearly half of adults are ill-prepared for a financial disruption and would struggle to cover emergency expenses should they arise,” and “ … 76 million adults, are either ‘struggling to get by’ or are ‘just getting by,’”

And if you’re in this group, don’t worry. You’re a copywriter, and you can change your situation.

Start by updating and checking your budget sheet each month. And …

Talk to a CPA or tax professional.

Depending on where you run your business, there are going to be certain fees and taxes involved. Meet with a credible licensed CPA to get this information as soon as you consider starting a business. This is essential because if you don’t make these required payments on time, you can get stuck with huge late fees, penalties, and more.

Plus, a CPA can help you:

• • Organize your business to reduce your taxes;
  • Set up payment processes for new clients;
  • Tell you about state and federal taxes you need to pay throughout the year;
  • Provide savings tips; and
  • Teach you important financial information as a business owner and more!

And guess what?

There are many free services available for small business owners. When I started my business, I met with an attorney and a CPA for free through SCORE, which is a great organization that provides free business education and mentoring. Conduct research online and check with local small business organizations for other helpful organizations and guidance.

Watch income and expenses.

Once you have your budget and tax payment schedule in place, you can move forward with your business. This will help you set your fees and give you the motivation to find new clients that meet your specific financial needs.

Perhaps you need to start with many small clients to make a certain amount each month to pay your bills and increase your confidence? That’s fine. You can always move on to larger clients as your business grows.

The key is to ensure you have enough clients and money coming in to pay all your expenses. If you need to cut costs on entertainment, eating out, clothing, and more until your income goes up, can you do it?

While you might start your business with a good income (or on a part-time basis), it’s important to be able to make sacrifices as needed and watch your budget carefully. After all, your business will have ups and downs, and life tends to throw emergencies and unexpected issues at us when we least expect them.

And if you understand what is going on with your finances each month, you can gauge where your business is and what you need to do to pay your bills on time. It might not be a lot of fun, but it’s an essential part of being a successful business owner.

Look for other opportunities.

Over time, you’ll find that your business will expand into something much more than just writing content. As you grow your reputation and expertise, you can make more money, help others, and work with great people on many different kinds of projects.

Opportunities open up as you build your reputation and expertise. For example, you can:

• • Set up referral agreements with friends and associates;
  • Create affiliate agreements with products and services that you like;
  • Help your favorite charities and nonprofit organizations;
  • Team up with other professionals to offer group projects at a larger fee; and
  • Write books and other content, post podcasts and webinars, create subscription/membership sites, and more!

The possibilities are endless … but only if you can manage your finances and know how much money you have coming in and going out!

Math is no fun, but making money is!

No, I’m not a big fan of math. But when it comes to finances, that’s a different story. I know the basics of how much I owe and when, how to save for the future and emergencies, and how to pursue opportunities to increase my income in the world of copywriting. (Today, I even write for many financial companies!)

You don’t hear about this very often when you start a copywriting business, but it’s really important … Know how to manage your money.

If you don’t have a grasp on your finances, it’s impossible to tell if your business is growing or if you need to cut back just to pay your rent or mortgage for the month.

Instead of struggling to pay bills, stay ahead of the situation. Write down what your income and expenses are and track them on a regular basis. Meet with a professional CPA and learn how to manage your money.

Only then can you pursue the right clients, charge the appropriate fees, and run a successful business. And when you don’t need to worry about finances, you can pursue interesting opportunities and take your business wherever you want to go!

The Secrets Are Out!

With these four articles, I’ve revealed some of the secrets you rarely hear about running your own copywriting business. I hope they have been helpful. And while some of these insights might seem scary to you, there is no need to fear. Now you know how to prepare and can avoid some of the problems that many new business owners face.

Running a business is much like a roller coaster ride with many unexpected turns, drops, and elevations. But if you like to face challenges head on and are willing to work hard, go for it!

I started my own copywriting business over twelve years ago and have never looked back! It has given me many exciting opportunities and once-in-a-lifetime experiences I never dreamed of happening. With this in mind …

What are you waiting for? The world awaits … .

(Answer to question at beginning of article: Pythagorean Theorem)