Solo entrepreneurship offers independence and freedom — your professional future is truly in your hands. However, when business curveballs pop up, you’re the one who’s exclusively on the hook.
Educating yourself is one of the best ways, as emphasized in this solopreneur guide, to prepare for the unexpected — as best you can. Looking at potential pitfalls from every angle will be your best counteroffensive should you experience an unexpected financial hurdle.
Read on to learn about some common financial challenges that most solo entrepreneurs don’t see coming.
Broken Equipment
Whatever your avenue of work, you’ll likely use some equipment — whether it’s a laptop, expensive photography gear, video editing software, or otherwise.
Broken equipment will directly impact your workflow, throwing your timelines into disarray and potentially disappointing clients. It will likely impact your income, too. Keep on top of equipment repairs and updates, and don’t ignore any warning signs your equipment throws your way.
Unanticipated Sickness
An unanticipated illness can see you missing days, and in extreme cases, weeks, of work. It goes without saying that this will affect your finances.
Each month, set aside some of your income in an emergency fund. This can give you all the cushion you need should you fall ill and you need time to recuperate.
In the unfortunate case that you need medication or medical tests before you’ve put enough money aside, you can opt for a loan or a line of credit.
Putting energy towards securing emergency funds can be a true hurdle, especially if you’re battling illness. Fortunately, some loan providers will let you apply virtually. For one, Fora offers loans online; here, you can apply 24 hours a day, 7 days a week, and all from your laptop.
Failing to Consider Rising Costs
Costs are on the up for all of us. For a solo entrepreneur, price hikes might include an increase to your office rent, your Internet, insurance, and annual software renewals.
It’s a common oversight for many solo entrepreneurs to fail to factor in annual price hikes when you’re revisiting the charges for your services at the start of the year.
Most clients will understand that your prices will increase now and then. If your price increase is measured and fair, and you give your customers sufficient notice, you won’t offend, and you won’t lose any clients.
Don’t forget, and don’t shy away from reflecting your rising costs in your invoicing.
The Cost of Professional Services
It’s tempting to assume that you can go it alone when you start your entrepreneurship journey. While this is fair for the most part, on some occasions, you might require professional help to move forward.
This help might include legal assistance should a client fail to pay their invoice, and you’re pushed to pursue legal measures or accounting help during tax season when you’re too busy with clients to dedicate time to filing.
Bottom Line
Solo entrepreneurship can be incredibly rewarding, but it can all come crashing down when an unexpected financial hurdle presents itself. Seriously consider every facet of your business in your annual projections, setting up buffers when necessary. Doing so will empower you to sail over such hurdles with ease.
