You’ve probably heard some version of this story — a young professional creates online content, builds a following, and suddenly goes from their corporate cubical to full-time influencer. Perhaps you have a similar story (or you’re headed in this direction.)
First of all, we think you’re awesome. As a financial app and platform designed for creative business owners, nothing makes us happier than creators and freelancers doing work they love. But if you happen to find yourself transitioning from a steady salary to a contractor-based income, managing your financial earnings can get a little murky.
You may be looking for answers to questions like…
— How much of this money should I spend?
— What’s the best way to pay my virtual assistant?
— Will my ducks be in a row come tax seasons?
These are all important questions, and Lumanu is here to help. We’re outlining an easy-to-implement plan and providing insight & solutions for managing your income — because when you stop guessing when it comes to the numbers, you can finally focus on growing your business.
Project your annual earnings
Before you can get a clear picture of how much to pay yourself, you have to determine the amount of money you expect to earn.
We understand it’s a challenge to estimate your annual income as a freelancer or influencer, but you probably have more context than you think. Analyze your past earnings to get an idea of the cadence and average amount of your engagements. Financial forecasting will help you determine the approximate amount you’ll make in the coming year. Then, you can choose your paycheck amount based on those results.
Be sure to account for taxes, your team members, and the amount you’d like to invest in business growth (think investments like a business coach, a course, or a networking trip). Whatever it is, set your goals and crunch those numbers before you determine your salary.
Pro tip: Make sure your pricing meets the industry standard. This is the key to sustainability — and if you’re not being paid well for the work you deliver, you may be well on your way to burnout.
Pay yourself a salary
The awesome part about being a full-time creator, influencer, and freelancer is the flexibility. It’s also the biggest challenge.
You don’t miss your old job, but if you left a salaried position, you might miss the stability of a bi-weekly direct deposit. But just because brand deals and content collaborations don’t roll in with a consistent cadence doesn’t mean you can pay yourself like they do.
That’s our best advice when it comes to paying yourself a salary — adopt the same mindset you had with your salaried position. Once you’ve projected your earnings, you can set your business account to transfer a designated amount on your chosen “payday.”
This may seem like a conservative approach, but it’s going to provide stability. And you’ll be thanking yourself when you have no problem paying taxes. Perhaps you’ll even have extra funds for a bonus at the end of the year!
Pay your team
You’ve been at this influencer thing for a while now, and business is busy, so you’ve probably hired some help. Whether it’s a virtual assistant, social media manager, or talent rep — at this point, you’re paying a person or two.
Of course, you took this into account when you projected your earnings, but you may be searching for a hassle-free way to organize the backend of being an employer.
For example, if your virtual assistant invoices you monthly, you want to ensure they get paid on time and that there is a paper trail of the details so your quarterly or annual reporting isn’t a massive headache.
Well, Lumanu for Business thought of all of that and more. Lumanu is a free app for your virtual assistant to download and use to send invoices and receive payments. And Lumanu for Business is the membership platform that pays your employees (ideally anyone who’s considered to be a 1099 employee) in one click and keeps the important paperwork and forms automated and organized. Get ready for a huge sigh of relief when you finally have a simple, reliable, and efficient way to pay and get paid.
Stick to the plan
Our last piece of advice: stick to the plan.
Even if you have a month of exponential earnings, don’t spend all the extra cash in one place. It’s amazing that your business is growing, but when you stay consistent with your financial plan, you create sustainable growth and build wealth.
You can give yourself a raise any time (perks of being your own boss!) — just ensure you’ve covered all your bases first. You’ll rest easy knowing your earnings are accounted for, your income is consistent, and your team is paid.
You got this!