Friday, April 17, 2015

From An Employee To Full Time Etsy Shop Owner

My Etsy shop, Purse O'nality by Mary, is not quite a full time, but more than just a part time job. I do work many hours in my shop either producing new items, tweaking current listings, taking  photos and listing new products. I'm also fortunate that my husband makes enough income that I don't to have to work out of necessity, but only by choice. Currently, I do daycare for my great grandson who lives with us, along with his mother. However, to get to this point, my husband and I had to make lots of sacrifices when we decided to live off of a single income after we were married. Our sacrifices have paid off and now we are living almost  debt free and have a nice rainy day fund. The reason for telling you this is because there are many people on Etsy who dream of quitting their day job and running a full time Etsy online shop. The idea of working from home, being your own boss, going to work in your pajamas, doing something that love to do and making money at it is all very appealing. Who wouldn't like that? I do. Still there is a downside of this as well. Being your boss also means that you have to pay for all of your medical and dental insurances, social security and other government taxes, pay an income to yourself and your employees (if you have any), unemployment insurance, and the list continues if you're the sole income provider. However, some things such as medical and dental insurance coverage might be taken care of if you have another source of income. 

Being a full time business owner, online or physical shop, is more than a 40 hour work week that you may already have with day job. Still, there is something to be said about having a full time Etsy shop and successfully living your dream. Therefore I would like to share with you some practical and basic tips for financial independence and for turning a dream of going from an employee to a full time Etsy shop owner into a reality.

1. Do a business plan. Some may be asking what is a business plan and is it necessary? A business plan is very necessary if you want to be successful. It's like a road map that provides directions on how to get from here to there and avoid many bumps along the way. In more technical terms, it's a written document that describes the business; has a sales and marketing strategy; contains the financial background and the projected profit and loss statement. It has objectives and goals that guides you and helps to stay you on track.  

2. Become financially independent. This one is a little harder, but doable. The reason for this is that you want to be able to have monies available in order to grow your shop. So how do you do this?

  • Sell anything you really don't need or you haven't used in over a year. Don't buy anything unless it's absolutely necessary.
  •  Down size your assets. For instance, can you live in a smaller house?  Get by on one car? Take public transportation more frequently?
  • Begin paying down your debt. This may seem a little overwhelming to some, but it's easier than you might think. Begin with your smallest monthly bill and pay a few dollars more then the minimal payment. For example, if you have a $10.00 payment, pay $15.00 every month until it's paid off. Then begin with your next lowest bill and pay the minimum payment plus the $15.00 that you were paying from the first bill. So if this bill has a minimum monthly payment of  $25.00, then pay the $25.00 plus the $15.00 for a total of forty dollars on that bill until it's paid off. Now you have freed up $40.00 to put with the minimum payment of the next lowest bill. Keep doing this until your debt is paid. You will find that you have now freed up all that money to put towards your business.
  • Don't forget to put 10%-15% of your freed up money away for starting up your rainy day fund.

3. Live off of a single income in a two income family. Now that you have freed up your debt, learn to live off one income. 

  • This will allow you to take the other income and put toward your business until you have sufficient amount of money to put towards your business. 
  • Living off one income will help you get through the harder times when business is slow.
4. Living off a single income family. This requires a little more planning because there isn't a fall back income. In most cases,  2-3 months wages in difficult times in normal circumstances such as a layoff, work related injury or a health issue is perfectly acceptable. However when you are the sole provider and a business owner,  you will need more than 2-3 months wages. Every business has yearly down time and downward economic trends. Therefore, you need to plan for at least double the normal acceptable wages.

5. Continuing working your online shop. While you are working on getting to your dream of quitting your day job, continue working your shop and on your business plan goals. Review your business plan every couple months and update it at least every year.

6. Say goodbye to your day job. Once you have done these steps, you are now ready to fly solo and live your dream. 

Following these steps is not an easy task and can't be done overnight. It takes determination and initiative. There will be setbacks, but staying on task and not being distracted by outside factors will help you achieve your dream. 

Your Style, Your Mood, Your Personality

source: Entrepreneur