When you first started your business, you probably put some effort into your finances. Maybe you set up a spreadsheet, downloaded a receipt tracking app, and even had grand plans of doing your bookkeeping monthly. And then everything just sat there gathering dust while you gathered clients.
As more and more designers and creatives take the freelance route, knowing how to start and run a business can be overwhelming. And because we, not so secretly, want freelancers to take over the world, we devoted an entire night with the Dribble SF meetup to tackling the dreaded topic of freelance finances.
The best part? We live-streamed the event, which means you can finally fulfill your dream of time travel and watch all three sessions here.
This was our first attempt at showcasing real stories about freelancers who elevated their game. We also wanted financial experts to share tips and examples that could help freelancers increase their overall revenue and save big on taxes.
Three Informative Sessions That Can Seriously Help Freelancers
We hosted three different sessions at the Dribbble event.
Two of the sessions were led by finance experts who’ve helped hundreds of freelancers with the money side of their business. The last session was an interview with a freelancer who is currently running a podcast for freelance designers and developers.
Being a Business
The first session was led by Andrew Carroll, CPA, who specializes in working with freelancers.
If you were to walk away with one thing from Andrew’s talk, it would be this: “Be and act like a business.”
Besides making freelancers look more professional, acting like a business also helps them save some serious money on taxes..
These are the key takeaways from Andrews’s talk:
- S Corps are the best corporate entity option for freelancers. He walked us through the steps a freelancer has to take in order to set up their business, proving that it doesn’t have to be a difficult process.
- “Act like a business,” means that, as a freelancer, you’re doing payroll, you’re doing your “books,” and you have the necessary permits and licensing for your business.
- Businesses exist to create a profit, and a profit is more than just a wage. Tax-saving strategies (like the ones Andrew discusses) increase profit. What’s the most important strategy? Freelancers should be treating themselves like a business.
The second session was led by Andi Smiles, a small business financial consultant who’s worked with freelancers for over 10 years. She shared four secrets to organizing freelance finances to maximize your tax savings.
The overarching theme for Andi’s presentation was that bookkeeping is done to track your money for taxes, and to track your money for information that helps you make informed decisions about your business.
Her top recommendations for freelancers are:
- Open a business checking account that would be used solely for paying business expenses and depositing business income.
- Open a tax savings account that can help prevent you from spending your tax savings on something that isn’t worthwhile or strategic for your business.
- Start using a bookkeeping program to automate reconciliations, save time, and avoid missing deductions.
- Set up a bookkeeping routine that involves updating your accounts at least once a week for about 30 minutes.
Insights from a Successful Entrepreneur
The last session took place in an interview-style format. Ugur Kaner, Hyke’s CEO, interviewed Sarah Jackson. Sarah shares her experiences starting a variety of businesses, including her most recent endeavor, Spec.fm, which produces top-rated podcasts and content for developers and designers at every stage of their career.
Sarah is dedicated to helping designers and developers learn, find great resources, and connect with one another. In her interview Sarah shares:
- How Spec.fm took off and grew over time.
- How she started working with sponsors, and navigated the new territory of accepting money for the work that she and her team were doing.
- Some fantastic stories about successes and challenges from her early days, which are worth hearing if you’re a freelancer just starting out or aiming to expand.
Feel free to listen to this interview on the live stream, where she also talks about PixelFox and Mule Design Studio.
A Little Bit of Data About the Dribbble Event
We mentioned that we’d share some of the statistics that we gathered during the registration process. Because who doesn’t love numbers (shout out to all your data nerds)?
Out of the total number of registrations (n = 141), we had some fascinating stats (see below).
The majority of the people interested in this event were sole proprietors, with roughly 50% of them making above $50K. Here’s a detailed breakdown:
Revenue expected from 2019
Less than $50K = 50.35%
$50K – $75K = 16.31%
$75K – $100K = 12.77%
$100K – $150K = 12.06%
$150K+ = 8.51%
Type of business
Sole proprietorship = 63.12%
LLC – single = 18.44%
LLC – multi = 2.84%
C corp = 2.13%
S corp = 7.80%
Cooperative = 0.71%
Other / no answer = 4.25%
Not freelancing = 0.71%
Overall, we’re extremely proud of our first live streaming event. We hope that those who attended, as well as those who watch the replay, will benefit from the information and advice shared by our panel of experts.
If you’d like more information on the Dribbble event, or if you’d like us to email you the slide presentations, feel free to contact us at [email protected]
Ugur Kaner is the co-founder and CEO of Hyke, the online platform that helps freelancers save $15,000 or more in taxes every year