Jul 25, 2018
Episode 198: Generating revenue in the "Shared
Economy"- (On the Road Edition)
While behind the torch there is nothing worse then stressing
about anything, especially bills. On this episode I discuss the
different aspects and the importance of keeping a day job or
generating revenue until you can TRULY afford to support yourself
as a full-time glass artist.
Dave Ramsey, who has helped millions
get out of debt and changed families finances for the last two
decades, preaches the importance of an emergency fund. He describes
the emergency fund as this... "An emergency fund is simply money
you’ve set aside for unexpected events in life. We’re talking about
true emergencies here, like a car wreck, a hospital visit, or a
leaky roof........you’re self-employed, or you earn straight
commission, then a six-month emergency fund is probably a better
idea for you since a job loss could make you unable to pay the
bills." Dave suggests 3-6 months worth of savings should be
able to pay all of your bills, groceries and any other
necessity that will get you through whatever emergency you may
have.
https://daveramsey.com/blog/quick-guide-to-your-emergency-fund
When starting any business you should already have put away
90-days of savings to pay for the business expenses alone in the
case you have Little to No sales. That way you can at least pay the
rent, keep the power on and hope that patrons visit and spend
money. In the case of the self employed artist you should
have 2-separate accounts, one personal and one-business, each
containing a 90-day emergency fund. This all depends on the
type of business you have whether solo-preneur or a larger
scaled business with lots of overhead. Either way there are
many variables for each situation that will ultimately decide which
type of emergency fund is nedded.
The 3-6 month emergency fund is there to get you through
the slow months but also there in case you burn yourself and can't
work for a few days or even worse, weeks. What if you severed a
nerve in your hand from a sharp rod of glass or something even as
simple as slipping and landing on your wrist and spraining
it. If you can't take the time off to allow your body to heal
the injury will be prolonged and inevitably not heal properly.
Below is a simple method to help you calculate how much you will
need to put in savings.
Here's a way to calculate you basic needs for the
business: Sit down and write everything you pay to keep your
shop running. This includes you average oxygen and propane costs,
power(if it's separate from the house or at a studio location),
average material bill(refer to B), rent (if paying), est monthly
shipping costs, etc..
Once you have this written down plug your number into the PDF
form I've made available for printing. You should have a folder
dedicated to your business expenses to be able to keep track of
your monthly average expenses. REMEMBER- This is a monthly
average so you need to take into consideration the slow times and
busy times plus the importance of keeping your books up to
date. This will make the process of calculating these
expenses simplified. PDF
LINK
I hope this helps you think about the seriousness of
saving. This is an area that isn't easy to start but once you
do it becomes routine and habit. Art is supposed to be
enjoyed. Even wen its production. There is no reason to be stressed
out while being creative as it will hinder your imagination and
your glass will know it. Free yourself with a safety net and
feel proud that you busted your butt and were able to save a
substantial amount of money. This might take 3 to 6 to 9 months to
accomplish but as Dave Ramsey says "Live like no one else
so later you can live like no one else. Good
luck..You got this
any questions check out Dave
Ramsey's website and give his syndicated show or podcast a
listen
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SHARED ECONOMY
COMPANIES
HERE'S A GREAT ARTICLE AND LIST OF
100 PEER-TO-PEER COMPANIES