HOO BOY, WHAT A YEAR, AMIRITE?
In these trying times, it’s good to know we can still come together to celebrate what’s most important in life: raising chickens and naming them after TV characters.
With record numbers of layoffs and unemployment rising like a helium-filled dumpster, a lot of us have turned to what we call survival entrepreneurism. That includes full-time self-employment, freelancing, and stringing gigs together like so many Hobby Lobby clearance rack seed beeds. Not only is this #entrepreneurlife a way to make ends meet when absolutely no one is hiring, but it’s a method of advancing one’s career. Starting your own business right now is the lemonade many have made out of the nasty-ass lemons 2020 has given us.
I myself transitioned to full-time self-employment when I lost my job just as the coronavirus hit the fan. Yet while this makes me a card-carrying millennial entrepreneur, it’s not something I’ve written (or thought) much about!
To be honest, starting my freelance business and then making it my full-time job was, in the words of our Lord and Savior Bob Ross, “a happy accident.”
As usual… I have no idea what I’m doing.
Every so often when I’m researching money topics, I sigh dramatically and collapse onto my fainting couch, limp wrist held to my clammy forehead in the very picture of Victorian femininity. “Oh woe!” cry I, “This money shit is so confusing and complicated! If only some genuine professional would do the research for me and just let me copy their homework!”
Which is usually when I decide to interview an expert instead of doing the work myself.
Enter Katelyn Magnuson, the self-styled Freelance CFO and Mother of Chickens (long may She reign). Katelyn’s whole thing is working with small business owners and freelancers to take the practical steps necessary to bring their passion to life. Her courses, Facebook group, and free resources are not just full of empty platitudes and cheerleading… she actually has made her own business out of setting up the businesses of others.
So when Bitch Nation clamored for information on becoming “solopreneurs” (Katelyn’s word, but I’m stealing it), I knew she was the hero we needed and deserved; someone to cut through the bullshit and give us some step-by-step guidance.
If you find today’s discussion helpful, you have our Patreon donors to thank. This topic lost out in our monthly content poll, but I could tell from the comments that it would be really helpful to some folks. So we did it anyway! (You’re welcome, Patrons Patricia, Lydia, Josh, and others.) Yuge, yuge thanks to our donors for their support and enthusiasm. If you want to ask us questions, or pitch cool article ideas to us, we’re always listening at Patreon.com!
Freelancing in plague times
Piggy: Are you ready for my first hard-hitting journalistic question?
Katelyn: Yep! Go for it.
Piggy: If you had any super power, what would it be and why?
Katelyn: Teleportation. I love to travel, but have a bad back, and frankly hate the time it takes to travel. Plus, convenience.
Piggy: Damn, that’s a good one. Ok you passed the test. We can continue the interview. Your nom de guerre is the Freelance CFO. What does that mean?
Katelyn: It means I’m a Chief Financial Officer both for freelancers, and on a contract basis. My core beliefs are education and empowerment without patronization.
Piggy: As you know, we’re living in The Plague Times™. How do you think things have changed for millennial freelancers since the coronavirus shut down so much of the economy?
Katelyn: Do I ever! In my opinion our world has changed dramatically both when it comes to business and finances, and socially.
Piggy: Girl PREACH.
Katelyn: However, I’ve seen so many other individuals taking the quarantine or stay-at-home order time to focus on self-development, improvement, and preparing both themselves and their businesses to relaunch anew as things “open back up.” So to that end, I’ve seen coaching and DIY/Get Your Shit Together programs thriving, while a lot of white glove or done-for-you services aren’t quite as robust as they were. I attribute this to people having more time than money, yet still wanting to implement changes.
Piggy: That’s such an optimistic outlook! I personally see more people embracing DIY and frugality, which gives me hope for the future. Do you think all this extra time will mean more millennials embracing freelancing after quarantine? Or even just taking charge of their careers?
Katelyn: YES! I think we’ll see more freelancers getting started both out of interest and out of necessity. I also think COVID has caused many of us to reflect on our career and life choices and make changes where things don’t align—such as with unfulfilling or demanding careers. I also think it’s been telling to see how current or prospective employers have handled themselves and employees during all of this.
Piggy: Totally! I’m hoping that more of our generation just realize they can advocate for themselves to their employers, let alone how.
Katelyn had no way of knowing this at the time of our interview, but getting laid off forced me to do just what she hoped for millennial entrepreneurs: contemplate my overly demanding, under-compensated, and unfulfilling employment.
Whether or not it was your choice to leave 9-5 employment, having the opportunity to start your own business even in the middle of a pandemic is an opportunity to reinvent your career. So contemplate your future financial and career goals like it’s literally your job.
Piggy: We get lots of questions from freelancers on how to manage their money. What do you think is the first step to money management as a millennial freelancer?
Katelyn: That’s a great question. The first step to money management as a millennial freelancer is to know your money. At the very least, you need to have a separate checking account for your biz that all transactions are run through. This gives you separation to see what your profitability actually looks like. Furthermore, you need to review your income and expenses to understand what offerings are truly profitable and enjoyable, and where you might unexpectedly be bleeding money. Hello subscription software fees!
Piggy: Let’s say I’m a brand new baby freelancer. What are the first steps I should take when opening my business?
Here are Katelyn’s three first steps:
- Register your business in both your state and with the IRS. In general I recommend a single member LLC. This keeps things simple come tax time, but provides some inherent liability protection that being a sole proprietor doesn’t. This will cost $0-$200 at the state level and is free with the IRS. That said, I don’t necessarily recommend an SMLLC in Massachusetts, Illinois, or California—the first two because they can be cost prohibitive when you’re registering, and CA because of an additional 8% tax on all profit.
- Open a separate bank account (in person when possible), and run all of your business transactions through it. This is especially important if you’re a single member LLC. If you don’t use a separate bank account for your biz, you can actually waive a ton of the liability protection, which is the reason most of us have an LLC in the first place.
- Hire someone sooner rather than later to help you set up your [accounting] books. This can make sure you’ve reviewed your chart of accounts (the categories you use for your expenses), how things get categorized, how much to set aside for quarterly estimated taxes, etc.
Fun fact! When we registered our LLC for Bitches Get Riches, we did it in my state instead of in Kitty’s because it literally cost ten times as much where she lives and we were like NOPE. Just one of the many advantages to having a two-member LLC.
For more of Katelyn’s step-by-step guidance on setting up all the paperwork and bureaucratic nonsense associated with starting a business, you can download her free Business Finance Checklist.
How (and why) to pivot, innovate, and get creative
Piggy: It sounds like an intimidating amount of work for a brand new baby business owner. But you and I know that it’s actually pretty doable. I think this ties back to financial ignorance simply holding millennials back from starting a business, among other things. What would you say to encourage a millennial who doesn’t yet have the financial education, and feels overwhelmed by these three steps?
Katelyn: I’d say to take them one step at a time. Both the state and IRS registration take less than an hour total, and can be done online! Once those are done, the feeling of being official helps give some confidence and momentum, and you can always hire a professional (like me!) to do it for you, or my personal favorite, to walk through the process with you!
Piggy: That sounds so heckin comforting. Guide us into the light of financial solvency, Katelyn! What advice do you have for millennials who have lost a job or income because of the pandemic?
Katelyn: It’s the reason I’m so fired up about education and empowerment. Why have someone do it all for you, when you can learn with a trusted guide who loves puns and is obsessed with their chickens?
Piggy: WAIT. HOLD THE PHONE. I’ll come back to my pandemic question. First you need to tell me about your chickens. Kitty and I both have chickens and we love their dumb feathery butts.
Katelyn: LOL YASSSSS. Talk clucky to me! I currently have eight, but I’ve had as many as eighteen. I love them so much, I’ve now done two photoshoots with them. I tend to name them in batches based on what TV shows I’m currently watching. The youngest batch was named after Westworld, so we have Clementine, Maeve, and Dolores, but D was too damn sweet, so she’s now Dory. They’re just the best and I’m obsessed with them. Glad you both are, too!!
Piggy: I knew I liked you. I could talk clucky to you all day, but we’re on a mission. Your advice to millennials in the time of coronavirus?
Katelyn: One, deep breaths. Two, now is the time to get creative AF. Not to go all woo on you all, but money is literally everywhere. So you’ve been laid off, or lost a ton (or all) of your freelance income? That sucks. Take a day or two to have all of the feelings, and then it’s time to get shit done. First, go apply for unemployment or Pandemic Unemployment Assistance, aka PUA, if you’re self-employed. PUA is a creation of the CARES Act and is pretty groundbreaking in that it provides unemployment assistance to the self-employed, freelancers, and gig economy workers, who would normally not be eligible for unemployment assistance.
Piggy: It’s groundbreaking! One of the things I hope stays after the pandemic is over.
Katelyn: Once you’ve applied for one of those programs, it’s time to pivot, innovate, and get creative! Where can you change your prior offerings up if you’re self-employed to cater to current needs? If you were formerly employed, where can your skillsets be used online? UpWork, Craigslist, even a ton of Facebook groups have fantastic audiences for getting a new business off the ground, and now is a great time to start one. Plus, starting a new business or adding to your current offerings should give you more income stability if/when things bounce back to the new normal.
The new normal
Piggy: Do you think those who start a business or side job during coronavirus should hold onto that extra income stream when things go back to “normal”?
Katelyn: I think they should hold onto at least half of it (if we’re talking profit, not just topline income). I’m a big proponent of both saving and treating yourself, and 50/50 has always felt good to me. The “fun” half could be used for purely frivolous things, investing/spending in businesses you passionately want to support, or maybe dabbling with some investing apps.
Piggy: Treating yourself and self-care are things we harp on a lot. What’s the importance of saving and treating yourself, even when you’re not making buttloads of money?
Katelyn: PREACH. Because none of us know how long we’re here for, and I want to both save for future me, and enjoy the hell out of the now.
Piggy: YASS. What’s your favorite way to treat yourself?
Katelyn: During normal times, travel. Currently, really great food and spa time. One of my commitments this year is to get a facial at least once a quarter at my favorite low waste organic spa here in Boise.
Piggy: That sounds fucking delightful. You’re a big advocate for nontraditional employment, and I think that resonates with a lot of us who started our careers post-2008 Recession. What are the advantages to thinking creatively re: employment and careers?
Katelyn: I’m an advocate for following the money and your passion. I’ve held several W2 day jobs over the years, while simultaneously running my business. But I think the flexibility and out of the box thinking is especially important for Zoomers and Millennials because of socioeconomic changes over the past 40 years. Many of us can’t get by with just one W2 job (and no partner or roommate, especially in high cost of living areas). But when you start your own business, the sky is the limit when it comes to both profit, working conditions, hours, ethos, and more. I’ve worked for some truly wonderful and not-so-wonderful managers, but nothing is sweeter than being the creator of your own future.
Piggy: Well said! I think that willingness and need to be flexible is unique to our generation and the Zoomers. Our parents are like “Go door to door filling out applications!” while completely ignoring the sheer competitiveness of a market where a lot of those jobs just don’t exist anymore.
Katelyn: Exactly. You can be scared as hell right now, or super damn excited at all of the opportunities to innovate. One is expansive, the other not so much. I’m continuing to choose to find things to be grateful for every day, and to put my genius out into the world to help propel others forward. You have a genius that needs to shared with the world, so what are you waiting for?
What are you waiting for indeed?
Obviously, there’s a lot more to starting a business. I’m grateful to Katelyn for demystifying the first steps and injecting a little motivation into those of us who might be hesitant. I can’t stress enough how breathtakingly useful, comforting, and empowering her resources and programs are if you’re even considering branching out into entrepreneurship. So make sure you go check her out!
As to my own bumbling progress as an entrepreneur? Katelyn has inspired me to make it a teachable moment. Our community is clearly thirsty for more information on survival entrepreneurism. So I’ll revisit this topic again soon to let you learn from my mistakes and warn you what NOT to do if you want to successfully start your own freelance business!
We’re inching toward our goal of 500 patrons to record the third season of our podcast. We only need 64 more people! You can be one of them.
You know what’s cool? The fact that we have no financial relationship with Katelyn. She’s not an affiliate or sponsor. She’s also not a big bank, or life insurance company, or startup investing platform trying to drink our readers’ money up as der Vampyr drinks das Blut. She’s just a pal we genuinely find to be cool and knowledgable. (You know gals and their pals!)
We can do this only because YOU, our readers, support us instead. So if you vibe with our mission, and value financial advice that’s truly independent of commercial influences, please consider becoming one of the 64 more folks we need to grow!