Category Archives: Career Focus

Making money as a creative entrepreneur: how I make money, where I spend my time, and what I’ve learned from launching my own ventures.

When I was four weeks old, my mother and father took our then-family-of-four from Germany to Idaho Falls, little baby and tiny toddler in tow. We were standing around in the living room, as my mother recalls (to be be fair, I can't recall and I certainly wasn’t standing—more likely drooling), talking about the insane temperatures sweeping in. My grandfather looked out the window at the temperature: it was minus 30 degrees Fahrenheit. Indoors, the heater warmed the house to 70 degrees.

“That’s a temperature differential of 100 degrees on either side of that glass pane,” my grandfather remarked, tall and lanky, white hair puffing out of each side of his head.

“That’s pretty impressive,” he chuckled.

Across the states, temperatures have been dropping and reeling – with 40-degree changes in mere hours as cold fronts sweep down invisible air channels and smother cities with their frozen molecules.

As a small-business entrepreneur, these temperature swings are analogous to the feast-and-famine cycle that can be all too familiar when you're getting your business off the ground and becoming friendly with the ideas of cash flow, budgets, expenses, projections, and launches.

Dealing with the volatile ups-and-downs of entrepreneurship: it's a bit windy out there.

Some days and months are big days full of courses sold, booked with clients, resulting in high-cash-flow months. "I’ve made it!" You think, gleefully, unwilling to look at how much you’ve spent to generate that cash flow (and just how far it really goes—because if you knew that it would only last a couple of months, you'd be back on the streets selling again the next day).

Other months are buckle-down, negative-zero income periods where you spend what money you have on resources and materials that you need (labor, equipment, time, skills)—in order to invest in and make what you want. It doesn’t matter if you’re a brick-and-mortar shop owner, an online retailer, a consultant, or a freelancer—creating a life you love involves seeking and finding customers and clients, understanding the highs and lows of business, deciding what you need to spend money on now and what can wait, and—for better or worse—'making it work.'

"Make it work!" — Tim Gunn.

So how DO you make your money as a creative entrepreneur?

What does it take to branch out and start your own side hustle, business, or creative endeavor? As a long-time “side-hustler” who started both a consulting practice and more recently an online teaching business, I've been invited to participate in a "blog tour" of people writing about their reflections on life as an entrepreneur.

While I still stumble over the words “entrepreneur” and “founder,” I’ve started a number of projects that have turned into profits. This month, as part of the Laser Launch Blog Party, Halley at Evolve-Succeed asked me to contribute to a collection of stories from small-business owners with all my tips for making your first and second year as a business owner fun and profitable. This post is part of a collection of essays with reflections, wisdom, and lessons from the journey it takes to become an entrepreneur.  (If you’re curious about the rest of the collection, check out the footnotes at the end of the post to see more.)

Here’s a behind-the-scenes look at what I’ve learned so far about “making it” as a creative entrepreneur. Some of the questions people ask me all the time include:

  • How are you making your money right now as a creative entrepreneur?

(Right to the point: they want to know where the money is — and I don't blame them! Things in life cost money.)

  • What were some of the biggest surprises about starting your own business?

(Oh yes, there were plenty).

And often longingly:

  • I wish I could do whatever I wanted—do you get to just sit around in your pajamas? 

(Hah! I wish. Nope, that's not my life right now). 

I wish I could say the last one were true — except I love learning and creating far too much to sit around all the time. In addition, the job of finding, getting, and retaining customers is a full-time job, so while I might write early in the morning in my pajamas and preferentially wear yoga pants during the day, I don't just sit in my pajamas at home all day (and we don't have a TV at home, either).

A quick disclaimer: I don't have the magic recipe for everyone, but I do have a few nuggets of wisdom from learning and making mistakes along the way. Take what you will and enjoy.

Getting started (money-wise) as a creative entrepreneur:

As I shared with Brazen last month, these are the big 3 things you need to make it as a creative entrepreneur:

  • First: reduce your costs.
  • Second, save a bit of runway (emergency savings), and
  • Third, start with a side hustle to test your ideas.

People often think you need a big plan, a giant 30-point strategic framework, or have it all figured out to get going. The reality (in my opinion), is that you start small, test and iterate, and get smart about not spending too much money where you don’t need to.

First, reduce your costs — live on the cheap:

Live minimally. Gain freedom from your job by not needing the paycheck. The more expensive your lifestyle, the riskier it is to jump to something new and uncertain that could have a potentially low income at start. The more you can reduce your overhead, the less risky it is to make that jump.

"The more expensive your lifestyle, the riskier it is to jump to something new and uncertain that could have a potentially low income at the start."

If you want to start something new or break out of a dead-end job, follow the path of the Ramen-eating hackers who live cheaply. If you live an elaborate lifestyle, you may burn through your paychecks. See how much you can cut.

Make it a game. Buy a $75 sewing machine and give up buying clothes for a year (which is something I did—and now I don’t buy new clothes very often, if ever). Learn from the family in San Francisco that lives with no trash. Eat on the cheap. Give up restaurants and alcohol for a year, or even a few months. Track all your purchases and decide whether that night out with friends or new pair of shoes is more valuable to you than your freedom.

The nomadic entrepreneurs who live around the world and work from anywhere are often working in places where the cost of living is low. They’re not somehow richer than everyone else; instead, they’ve often worked the airline systems to get thousands of frequent flyer miles and travel on the cheap. The life they’ve built is incredibly inexpensive, making the need for a giant business (and lots of possessions) unnecessary. My fiancé and I talk about and analyze ways to live with less—figuring out what we truly "need" and what makes us happiest, often discovering that things are not synonymous with happiness. The more I interview and meet people as well, the more I realize that the happiest people don't "have it all"—they have what they want, and skip the rest.

Sound like too much to give up? Consider how much you want to leave your job or chase your business idea. What’s it worth to you? How much do you want to start this business? When you want it, you’ll make it happen.

Second, shore up your emergency savings for when you *will* have low-cash-flow months.

This is part two: save up a nest egg or a "freedom fund" while you're on the job, if you can. Cobble together several different income streams (bartending, teaching, coaching, waitressing, and many other side hustles kept me in positive cash streams).

When I started my first job after school, I actually made less than the cost of my rent and loans. In order to make it work, I picked up two side jobs: teaching swim lessons on the weekends and tutoring high school students in the evenings after work by posting an advertisement on Craigslist as a geometry and algebra tutor. That extra $200 a week was my savings and food budget, and I was able to save a little bit each month—and eat. To get started on your next project, create a freedom fund. 

After a year, I had saved $4,000 on the side from little side jobs. It was just the cushion I needed for the next step: several months where I used that same night and weekend time to concentrate on tweaking my side business endeavors. Soon I started making thousands of dollars on the side.

More recently, I left San Francisco to head to New York to start my next business adventures. To make it happen, I sold my car for $12,000 and had about the same amount in liquid cash savings that I was willing to use towards building my next set of projects. I also tested the projects I wanted to build in advance, demonstrating that people were willing to buy what I wanted to make—and then, not leaving until cash flow was positive and knowing that the buffer funding was there for the variant months of lower-than-expected income (or higher-than-expected costs).

In an ideal world, you'll have about a 6-month buffer so you don’t work month-to-month, but in the real world, you do the best you can. Nearly every one I've talked to has said it takes longer than they expect to generate consistent income—so that cash savings helps during the buffer months when you're making money—but not as much as you need. The less your life costs, the longer the money lasts. 

The lower your expenses, the longer you can stretch your savings. If every paycheck goes straight to paying your expenses, consider taking on a small side job to boost your income, even while building your project.

Third: build it as a side hustle, if you can.

Does it make more sense to start your business from scratch or build it as a side hustle?

I recommend that everyone have a side hustle. It’s called moonlighting, and it’s a great way to test whether something you want to do is feasible. For some it's a paper route or a nail salon job; for others, it's taking care of elderly on the weekends, for me, it was teaching swim lessons and tutoring high school kids. It's a great space to make a little side money, keep your options open, and develop your skills in a particular area when you're thinking of changing careers.

 The best time to try out your new project is now. 

Test the market viability by seeing if there’s any traction for your ideas, and tweak each iteration a bit to improve the offering. Perhaps you want to start a side culinary and health business. Set up evening showcases on the weekends for friends and family and let people know you’re doing a cooking class at a discount to raise awareness. Pitch your services to local vendors. Offer to teach at a high school. Spread the word about private lessons.

After a couple of months, reevaluate and see if you’ve made a profit. Tweak your project to build something people want that you also enjoy doing. If you need to, stay home and do things no one else is doing to make it work.

How do you know it's time to finally take the leap?

There are times when you need to make the leap without a nest egg, without changing your costs, and without a plan. This happens, and people make it work. Sometimes the intensity of the jump forces laser-like clarity and an immediate reduction in expenses. But if your goal is to set out on your own by next summer, start building your business and reducing your overhead right now. 

Most folks running their own businesses and building the life of their dreams are always in the process of doing that — running and building. These are active verbs, which take time, energy and innovation. It’s not about pulling all-nighters or creating an endless stream of energy; it’s about being smart about building something a little bit at a time.

People who are working on new projects or problems aren’t immune to risk. But they’ve mitigated potential risks by using strategic tools, building up their savings, creating clever cost-saving lifestyles and forming plans to tweak their systems to get what they want.

Leave your job when you need more space in your business or venture and when you have a few leads. I knew it was time to head out on my own after I made almost half of my full-time income on the side—I decided to trust that if I put my day-time energy into my side-hustle, that I’d be able to make up the difference. I also kept trying to get my expenses down to make it easier to make the transition.

If you can save a little, cut your costs, and test your ideas on the side, you’ll be excited about what’s ahead because you’ll have already planned for the risks and confirmed that project has the potential for success.

How I started teaching online and in-person:

I’ve always loved teaching and coaching—from one-on-one tutoring in high school to assistant teaching in graduate school. After I left school, I kept teaching by signing up for workshops and events and volunteering my time to run events.

I started teaching on the side—in the evenings and on weekends—by putting up an advertising on Craigslist as a tutor, by pitching conferences and workshops as a workshop leader, by running lunchtime events at my company, and by reaching out to places like General Assembly, Skillshare, and Udemy to work with them. As I built both my teaching experience and reputation over several years, I was able to test my curriculum, build ideas, practice presenting, and later teach more through my own website.

What if you have savings and a side hustle, but you like your job? When did you know it was the right time to quit your job?

I liked what I did in my day job—I got to manage the communications and work on our marketing efforts at a 200-person architecture firm. It had it’s own challenges and entrepreneurial endeavors—we created a new blog, redesigned a website, and launched a journal from scratch, and I got to work with some of the most respected names in landscape architectural design. It was intense, demanding, and rigorous. 

Yet I knew I needed to leave when I got too tired I couldn’t see straight, and when enough people were asking me for what I had—and I couldn’t answer their responses quickly enough during my night hours.

(It was also convenient that my then-boyfriend and I decided that living in the same city might be nicer that cross-country dating, so the universe conspired to get me to head out to New York. Life tells you to move and change, if you’ll listen to the call). 

Financially, I knew it was the right time to work for myself when I was able to draw clients, fill up my classes on a regular basis, and when I wanted to chase the next challenge in front of me.

What do you do now as your business—how do you make money?

Ahh yes, the money question. (I suppose I thought I could get away with not answering this!)

I do three things: I run a teaching and media company (SKP Media), I consult, and I coach. From time to time I take on additional creative and collaborative projects as well—depending on what needs to be made in the world, how much time I have, and how exciting (read: "Hell Yes!") the project is and the people are.

SKP Media is the bulk of my current time and energy. It’s where I teach writing workshops, content strategy workshops, and my newest course—Grace and Gratitude, a two-week course on cultivating kindness and gratitude in your life. We have sold-out (and over-sold) each of the courses, and during teaching months I spend a fair amount of time interacting with participants, reading and grading, running the program, and researching new examples to share with the crew.

This is where I spend about half my time, and it brings in about half of my yearly business income. With this business income, I invest in teaching equipment, the fees and hosting charges for each of the platforms I use (in addition to processing fees), pay taxes, hire a teaching assistant, and collaborate with a number of other freelancers (like proofreaders, web designers, and graphic designers)—who help get everything up and running. It's important to note—business revenue is not the same as income, by any means. If my business is making $60,000, I might only be paying myself $30,000 depending on the variables of expenses. So reducing your expenses and living costs is a great way to help in the early stages of building.

In addition, I consult from time to time with clients who are interested in publishing, writing, content development, and social media movements—my typical clients are people interested in developing their own thought leadership platforms, need help running a multiple-month PR campaign, or want help understanding and developing their social media and content strategy.

I also take on a select number of coaching clients if there's space in the schedule, but I’ve been keeping this part of my business quite small as I ramp up the teaching and media company, which is taking up the majority of my time at the moment.

It should also be noted that not all time is spent on activities that make money directly—writing, for example (such as this post) isn't something that necessarily generates a lead or a sale directly, but takes a fair amount of time. Learning how to balance business-generating activities with other activities that don't directly generate income (writing, social media posting, meeting people at conferences)—is a balancing act, and one that's been subject to a lot of finessing.

What else do you spend your time on?

The above strategies for how I earn my income and spend my time add up to about 60-70% of my time—but I spend a fair amount of time writing, as well (as much as 30-40% of my time, if I’m lucky).

I write about 100,000 words on this blog and my essays annually, and I write an additional 30-40,000 words for each of the various program platforms I create as well, which doesn't include the amount of writing that's left on the cutting room floor when I go back to edit and revise.

Each morning I get up early and write, for as much time as I have time in my schedule. (Some days are booked solid with client and teaching work, so my writing window is from 7-8:30AM before my day gets off to a roaring start). Other days are luxurious when I spent 7AM—11AM writing, before getting in to begin my work. I still have a habit of writing on Friday evenings and Saturdays, as those times are "me" times that are often undisturbed by regular work calls.

There are other parts of my life that take up significant portions of time — sleeping, eating, meeting with people face to face, yoga teacher training, traveling — but this list is focused on what I do in my business life.

What about you? Do you have any other questions about making money as a creative entrepreneur?

What have you done that’s worked? Do you have any advice for small-and medium sized business owners that would be helpful?

Leave a note in the comments! 

For more from this series on entrepreneurship, small-business success, and business wisdom, check out the posts going live this month over at Evolve and Succeed

 

 

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