Chapter 1: Understanding Financial Management in Solopreneurship

In a solo venture, you assume the role of the financial overseer.

Two years back, my husband sold his company for just over $100,000, providing a significant financial boost. However, that windfall has nearly been exhausted.

We judiciously invested part of those funds—acquiring stocks, renegotiating our mortgage, and completing home renovations. A portion was also allocated for leisure activities, which is equally important. Yet, we ended up depleting the remainder alongside our income due to my insufficient earnings and my lack of awareness about it.

Looking back, this was a foolish oversight. The past few months have proven challenging; my income began to decline sharply in February, and within a few months, we exhausted our remaining savings.

So, what now?

While contemplating our next steps, a harsh reality set in: I had overly relied on my primary income source—Fiverr. Although I occasionally worked through other platforms and had returning clients, most of my earnings came from Fiverr. Thus, when my Fiverr income dropped and ChatGPT claimed some of my regular clients, we shifted from "let's take action" to "what's our plan?"

Section 1.1: The Pitfalls of Relying on a Single Platform

To analyze our financial situation, I revisited past earnings. This was when my critical error became clear: contrary to my previous assumptions, Fiverr had never been our sole source of income.

Fiverr's earnings were consistently bolstered by other platforms, returning clients, Medium, or even savings. The confusion stemmed from the fact that a significant portion of our income appeared to come from Fiverr, leading me to underestimate the importance of diversifying revenue streams.

Subsection 1.1.1: The Consequences of Neglecting Other Opportunities

I had concentrated solely on that one platform. When a client requested multiple revisions due to unclear needs, I dropped everything to accommodate them, fearing a bad review that could hurt my business.

As workload dwindled, I scheduled meetings with my Fiverr Success Manager, implementing her suggestions and adjusting keywords, often dedicating days to these tasks. Meanwhile, I relegated other potentially lucrative pursuits to a secondary status, mistakenly believing they lacked the earning potential to warrant my focus.

Chapter 2: Navigating Income Management as a Solopreneur

The first video titled "10 Money Mistakes You Can't Afford to Make" provides valuable insights into common financial pitfalls solopreneurs encounter. This resource is essential for anyone seeking to enhance their financial management skills.

The second video, "Jack Brown - Stop wasting money, stupid," from the #NottmDigital2023 event, offers practical advice on making better financial decisions and avoiding wasteful spending habits.

As my husband continued to work, I freelanced, and we would discuss potential trips. He’d often ask, "Are you confident we can manage this financially? What’s your income?"

In response, I would outline our financial situation: “I have $X in savings, $Y from completed projects, and $Z in future bookings.”

His blank stare highlighted my shortcomings in money management—he was right.

Managing finances becomes complicated when transitioning from a steady paycheck to unpredictable income streams.

To simplify this process, start by assessing your annual revenue. Ideally, you should have established a side hustle for at least a year before leaving your job, though I did not follow this advice.

Understanding your expected annual income allows you to divide it by twelve for a monthly average. Then, split that number in half; this represents your personal income, while the other half covers taxes and business-related expenses.

In an ideal scenario, you would kick off your entrepreneurial journey with a financial cushion in your business account, enabling you to pay yourself a consistent monthly salary while your revenue streams continue to grow.