In the Free 5 Day Website Challenge I share with you all the tech you need to build a website, but what about all the tech (and not-so-tech) you need to actually run a business? In this post I’m going to break down for you exactly how I run the business-side of WP+BFF!
Big, fat disclaimer: I’m not an attorney or an accountant and I did not stay at a Holiday Inn last night. This post does not contain legal or financial advice. Consult your lawyer and accountant with questions about your specific business.
*This post contains affiliate links, which means if you click on one of my links and make a purchase, I earn a commission which helps me to keep the 5 Day Website Challenge Free!
How I Formed My Business
When I first started freelancing, back in 2014 I didn’t have an actual legally recognized “business”. I just started exchanging website work for money, and I claimed that income and related expenses on my personal taxes. I didn’t know it at the time, but I was operating as a Sole Proprietor, I just wasn’t registered in my state, and I’m pretty sure that’s totally okay… If it wasn’t, oh well, too late now LOL!!
For the requirements in your state, check this link out.
But when I had the epiphany to call myself WP+BFF and create the Free 5 Day Website Challenge, I just had a gut feeling and sense of determination that it was going to work out, and I wanted it to be a legit business.
I used to work at a law firm, so I reached out to my friend Kathy who assisted a corporate attorney, and she walked me through what I needed to do to register my business in Ohio. I settled on a single-member LLC, Kathy gave me templates for the “Articles of Organization” documents I needed to file with the State and I filled them out and sent them off with a check. About a month later, I got a certificate back in the mail a boom! I had a business.
How Much It Cost Me to Start WP+BFF
I had to pay a filing fee to set up my business ($125), I had to pay for a domain and hosting ($100), for some premium plugins ($100), Camtasia to record my tutorials ($200), and MailChimp ($10/month)… and I really needed a legit laptop. The laptop we had was a used POS my husband bought from IT guys at the law firm where we both worked.
I bought my MacBook Pro from the Apple Certified Refurbished store online and I paid for all of those things with the money I had made freelancing.
I never went into debt to start WP+BFF, I didn’t use money out of our personal accounts, and I’ll never go into debt for WP+BFF. Will it take me longer to bootstrap it? Sure. But having no debt gives me total freedom, and that’s why I’m doing this in the first place.
How I Pay For Stuff
My mom helped me open up my very first checking account after I got my first job at age 16. In fact, I think her name might still be on it… When I got married back in 2012, I left my bank and moved all my stuff onto my husband’s account, but I kept that checking account open because of sentimental reasons!
When I started WP+BFF, I just started using that account specifically for business. I haven’t yet changed it to a business checking account, but the only money that goes in is business money and the only money that comes out is business money (with the exception paying myself). I don’t buy anything for myself out of that account.
So I had that checking account, and also a PayPal account. And I would pay for stuff with my debit card, and with PayPal, and then I’d move money from PayPal to the checking account, and I’d have deposits coming in from sales on my website going to both PayPal and the bank account, and it was a hot mess!!! Can you imagine trying to keep track of actually how much I’m making and spending when everything’s repeated in 4 different places? It was a mess.
So here’s what I did: I opened up a Southwest Rapid Rewards Business credit card. All my expenses run through this card and I get tons of Southwest Miles. Not my debit card, not PayPal, and I pay the balance from my checking account monthly. And then I make monthly transfers from PayPal to my checking, and the website sales get deposited daily. Way easier to keep track of what’s coming and going that way!!
By the way, we also have a personal Southwest Rapid Rewards card and pay all of our bills and expenses on that card, and we haven’t paid for a plane ticket in a few years, and we travel a few times a year. It’s a really good rewards program.
How I Pay Myself
I literally transfer money once a month from my business checking to my personal checking. Sometimes I’ll withdraw cash from an ATM, but that’s pretty rare. I don’t spend money out of the business account on anything personal. That’s called “commingling” funds, and that’s a no-no. Here’s a great article that explains why.
How I Get Paid
So I get paid for a few different things: Services like the Done For You Package and the WordPress Protection Package, Online Courses (like the BFF Academy), and Affiliate Marketing.
I use a product called Infusionsoft to run my entire business online. My email list is Infusionsoft, my invoicing is Infusionsoft, my clients are in Infusionsoft, and the sale of and access to my online courses are managed via Infusionsoft and WordPress plugin called AccessAlly.
Infusionsoft allows payments via credit card and PayPal. It uses a credit card processor called WePay to collect credit card payments and those are automatically transferred to my bank account about 48 hours after the sale. PayPal payments just go right into my PayPal account, and I move that over to my checking account money. Affiliate payouts also go right into my PayPal account.
It’s all pretty much automated except for when I’m invoicing for a Done For You Package, but then it’s just a few clicks to create it, email it out and get a payment via credit card online. I have a couple clients that send me checks, and I deposit them into my account by snapping a picture of them on my phone.
I’m super fortunate that I have not had to deal with collecting from clients. I can think of only one time I had a hard time collecting from a client, and it really wasn’t that big of a deal, he just kept forgetting and eventually paid up.
This is due to advice from my business coach on how to structure payments for my bigger projects. For hourly projects, clients pre-pay for blocks of hours. For the Done For You package, the work doesn’t start until I get a deposit up front, revisions happen after a 2nd payment is made and the website doesn’t go live until the final payment is made. That incentivizes my clients to pay on time, and they all do!!
How I Do the Legal Stuff
I use a website called RocketLawyer to draft contracts I have with my clients and subcontractors. I’ve used it to draft project cancellations, and there’s probably a contract in there for every scenario you can think of.
Once I’ve created the contract, I use HelloSign to get legally-binding signatures on the contract.
I’m using RocketLawyer for my trademark application, and they have super-awesome articles about all things legal business, like copyright, service contractors, etc.
I also plan to talk to a lawyer later this year just to make sure I’ve got all my legal bases covered and have a relationship with someone in case I do need help in the future.
How I Hire People
I’ve come to discover that I can’t do it all. Even with the Done For You packages, I need help. I pay a monthly fee to She Can Coterie for Virtual Assistant services, and I subcontract some web design and development work to a super awesome web developer.
I use all independent contractors and don’t have any employees. I’ve had some weird experiences with subcontractors, but I’ve hit a really great stride and have some good people. It’s really trial and error, and what I’ve found is that good communication is the key, and you get what you pay for…
I’d love to have an actual employee someday, but I’m not quite there yet and I have no idea how payroll and taxes and social security would work, etc. So maybe in a couple years!!
How I Stay Organized
Hahaha!!! I like to think I’m organized, but really, my Dropbox is a hot mess. I use a mix of email, Google Drive, Dropbox and Asana to get all the things done for WP+BFF.
I just recently reorganized my WP+BFF Google Drive to bring clarity to all the different parts of my business and what content needs to be created for them. I have a folder for the 5 Day Challenge, BFF Academy, Web Designer Academy, Done For You and Blog Posts. Now it’s super clear to me what pieces and parts where.
I also use Asana to track my own projects and collaborate with clients and my VA team. It’s ah-mazing and it’s free.
How I Track Income and Expenses
When I first started, I was using Freshbooks to invoice my clients and get paid. I love Freshbooks for invoicing for services… BUT what made it not easy for me is that I sell products, and I earn affiliate income. In order to track that income in Freshbooks I literally had to create an invoice for the income I had received and then pay it. So if I got a few affiliate payouts and sold 20 products, that’s 25 invoices I had to manually create and pay each month.
I muddled through doing that in 2015, and then I moved to Quickbooks Online in 2016, thinking it would be easier because it would track my product and affiliate income automatically without me having to create invoices. And it did, but it recorded it like 4 times because of all the accounts I had and moving money between those accounts and not really knowing what the hell I was doing. So my bank account showed one amount of money, but my Quickbooks showed like 4 times that amount.
It was a huge mess to clean up, and cost me a lot of time and money to fix it all. So never wanting that to happen again, and knowing the importance of having the right people and tools in place, I totally moved from Quickbooks to Bench.co for my bookkeeping.
While it’s significantly more expensive than my Quickbooks subscription, it comes with an actual real team of bookkeepers (shoutout to Alex!!) that do it for me every month.
To me, that’s like having someone clean my house every week. I know it’s getting done, it’s right, and I don’t have to worry about it, and there’s nothing better than coming home from work to a spotless house (or opening up your books to see that they are up-to-date)! You can check out Bench.co here when you sign up with my link, we both get a free month of bookkeeping with Bench!
How I Pay Taxes
I still report income and expenses on my personal tax return along with my W2 income from my day job just like I did when I was freelancing, and I file it myself every year using H&R Block Online. It literally walks me through it by asking super easy questions like “Do you own a business?” “Do you have income from a W2?” You check the boxes, and it asks you all the questions it needs for you to report your income and expenses and file your taxes.
I pay my federal taxes, Ohio state income tax, and Columbus city income tax.
In 2015, I did not pay quarterly income taxes BECAUSE I have a day job, and the taxes that were coming out of my paycheck were pretty close to enough to cover what I owed from the income that WP+BFF because I barely made any money in 2015.
In 2016, I also did not pay quarterly income tax, but I should have… Oops. When I did my taxes this year, I ALMOST had to pay an underpayment penalty because I didn’t have enough coming out of my day job paycheck to cover my total income. I was able to avoid the penalty I think because I paid more taxes in 2016 than in 2015 or something like that, but I had to step through a process in the H&R Block tax forms to appeal it.
In 2017, I’m paying quarterly state and federal taxes on WP+BFF income. H&R Block Online made it super easy by helping me estimate what I would need to pay and giving me payment vouchers that I can print and mail with a check. The first quarter’s taxes were due on April 18th of this year, and I opted to pay them online through this website via my checking account.
Bench.co, my bookkeeping company, hooked me up with a CPA so I can make sure I’m compliant in all areas of my business.
How I Run WP+BFF While Doing All the Biz Stuff
Yes, it’s a lot of stuff, but I didn’t do it all at once, and I didn’t even do it all before I started working with clients or selling courses.
Each piece all happened along the way as the need arose, and I’ve been learning as I go!!
I hope that helps you guys as you’re trying to not only do the thing that you love doing, but also manage the business side of things!!
