In my post last week on staying motivated with “big, hairy, audacious goals (BHAGs)” I mentioned that one thing I was planning to start doing around here was a monthly wrap-up post to keep you posted on my progress towards becoming self-employed again and on the projects I’ve been busy with.
As you know, one of my goals with this site has always been to show you what life as an internet business owner is really like (not the mythical version most sales letters would have you believe!), so I hope that you find these posts interesting as a “glimpse into the life of an internet marketer”.
Unfortunately, I’m still having trouble coming up with a good name for this monthly update, so if anyone can think of a better option than “Sarah’s Corner,” “Sarah Shoots the Shit,” or “Sarah Rambles for An Inappropriately Long Time”, I’d love to hear it 🙂
Anyways – let’s get started! This month, I published nine posts here on the Common Sense Marketing site, and I’m pretty pleased with the balance of actionable marketing/writing strategies and touchy-feeley business development advice. If you missed any of these posts, check them out here:
Are You a Conversions Ninja? Easy Ways to Increase Your Affiliate Income
How to Get Motivated with BHAGs
Taking a Wider View on World Humanitarian Day
How to Split Test – The What, Where and How Guide to Making More Money
15 Ways to Get Paid to Write
Psst – I Want to Tell You a Secret (or 27) About Me…
Internet Marketing Cliches – Stop Taking Massive Action and Start Taking the Right Actions!
Case Study 3 – Final Tips and Tricks on Outsourcing Effectively
On Near Death Experiences, Marketing & Life Lessons
I’m also excited to announce my first guest post in ages, published by the super-awesome Oni at YoungPrePro. If you haven’t seen it yet, check it out here: 9 Ways to Find Freelance Writing Clients Who Will Actually Pay You. Thanks again, Oni!
In other Common Sense Marketing news, I’ve been making a few changes around here to help improve the user experience for you guys. There’s a new “Start Here” page, plus I’ve dramatically expanded the “Work with Sarah” page to include info on guest posting here, ways to learn my affiliate marketing strategies and more. I’ve also added better social media sharing tools, so if you see something you like on the site, I hope you’ll take a second to share it on your favorite social networking site!
The result of all these changes has been a dramatic increase in reader engagement. For the month of July 2011, the average time each visitor spent on the site was just 2:30:
But with some of the tweaks I’ve been making, I was able to more than double that, with an average time on site for the month of August 2011 of 5:47. Way cool, and thanks to all of you that have been spending more time hanging out with me here 🙂
But besides all of the work I’ve been doing here, I’ve been busy with plenty of other projects – as is the life of an internet professional! Here’s what else I’ve been up to:
* I’ve taken on two new long-term writing clients in niches that I enjoy writing about that should equal between $2,000-$3,000/month in income. Both of these clients were found through the Problogger Job Board, and although it’ll be a challenge managing this increased writing load with my commitments here and at my day job, I’m excited about how much debt these contracts will let me pay off.
* I’ve been quietly buying up minisites on Flippa with the goal of turning them around increasing my passive income portfolio again. This month’s project was a site that sells an ebook in the skin care niche. It’s an older site, but it still gets traffic from articles, so I’m working on introducing some new features (like a blog) and split testing different elements on the landing page (right now, I’m testing the headline text).
Now, for the update on how I’m progressing with my goals of becoming self-employed by July 26, 2011. Unfortunately, August wound up being a more expensive month than anticipated, thanks to a mini-vacation and some unforeseen car repairs, but I was still able to put $1,000 towards my credit card debt, bringing the total debt remaining to around $11,400.
However, preparing for self-employment is about more than just paying off debt for me. As I discussed in the “My Dirty Little Secret” post, I’m doing a lot more to prepare for being self-employed than I did the first time around, in the hopes of not failing quite as miserably as I did the first time around!
So over the next few months, I’ll be investigating a number of different things, including the best way to set up the legal structure of my business for self-employment (basically, should I switch from a sole proprietorship to an LLC), how to handle things like disability insurance, life insurance and retirement contributions as a self-employed professional and how to recreate the social atmosphere of an office while working on my own.
But my project for this month was to get an accurate understanding of what my expenses will be like when I’m on my own, so that I know how much income I’ll need to bring in to cover everything. And while I can go through my checkbook and see what I pay for my mortgage each month, how much my cable and energy bills are and so on, my bigger interest was in understanding my regular expenditures outside of these set bills. Basically, what do I spend on intangibles, like groceries, eating out, gas, library fees, vet bills and so on?
I’ve been tracking my income and expenses on Mint (go get an account if you don’t already have one!) for about a year now, and I’ve been diligently categorizing each transaction so figuring this out wasn’t that difficult. To do it, I exported all of my transactions to Excel, separated them by month and then deleted all of the transactions that related to the recurring expenses I’ll still have when I’m self-employed .
That left me with a real estimate of what I spend outside of my regular bills, and provided much more insight than just estimating, “Well, if I eat out once a week, I’ll spend this much at restaurants…” (Lesson learned – I eat out *wayyyyy* more than once a week!)
This is where things got interesting…
From these numbers, I was able to total up a monthly figure of what I spend outside of my regular bills. The numbers range from $945.68 (April 2011) to $2,512.23 (August 2011 – damn you, Ford Focus lock cylinder!), with an average of $1,390.55 and a median of $1,240.90.
So what conclusions can I draw from this? For one, when I’m estimating how much monthly income I need as a self-employed internet business professional, I know to anticipate at least $1,390.55/month beyond my regular bills, which average around $1,700/month. But I also know that my expenses could go as high as $2,512.23, so it might be a good idea to have a liquid savings account with at least $1,100.00 set aside so that I don’t have to tap into my regular savings account if I have a more expensive month.
Altogether, this brings my estimated necessary monthly income to around $3,090/month. Of course, this number is just a starting point – over the next few months, I’ll be adding to it as I get better estimates on what to set aside for taxes, insurance, retirement contributions and so on. But in the meantime, being more aware of these extra expenses means that I can focus on bringing this average down. For example, my goal for next month is to eat out no more than twice a week (one lunch and one dinner), which I estimate should save me $100-$200/month.
If you’re looking forward to self-employment as well (heck – even if you’re not!), I highly recommend this exercise in terms of quantifying all those extra expenditures that don’t always find a place in your budget. It’s eye-opening, for sure, and I think you’ll be amazed by how much you’re able to cut back in certain areas.
Are you working towards being self-employed? If so, have you ever conducted an analysis like this to determine how much you’ll need to make each month to be successful? If you have, or if you have any good budgeting tricks to share, I’d love to hear more in the comments below!