I wanted to write a blog post because I don’t know, I guess you are a technical person that reads my blog, and you might be interested in my journey from a two decade consultant into a sole business owner building a product company.
It’s pretty exciting. Everyone should try this.
This blog post
I was talking to Elaine as she’s visiting Sydney and I was explaining a very critical lesson I’m in the middle of learning, now that my company “Flow Studio Solutions” is 3 months old.
I was also recently talking to Brett and Sandy who gave me a lot of insights into an early day of a founder. Brett asked me several questions and boy he’s a wizard how does he know that’s exactly what I have been doing the whole time.
And there is FIRST LESSON I’m rapidly learning.
When you decided to take part time or taking some time off and start doing your business, you have this tendency to think Oh, the business isn’t taking in enough income, so I’ll just not take a salary for this month. I’ll live off my savings in my personal account.
This is Brent’s wise words to me. Paraphrased
I modified those words into this trick - with the bank details added in.
Please do over. It’s a most simple trick.
Make your business bank account. You should have this anyway, otherwise people can’t pay you.
Transfer money from your savings that you intend to live on, into your business
Give yourself a salary and sent that back to your personal savings every month (to pay your bills)
Now suddenly, you can claim expenses, tax deductions and have a clear idea how much money the business needs to continue paying you that salary.
Also, when you want to seek funding or grants - it is very clear to proof how much does the business need to operate, and how much existing seed money had already been injected into this business.
You can’t proof “oh here’s my savings account I need about $5000 a month” that isn’t your business, that’s your lavish/hermit lifestyle, nobody cares about that but you. But if you had your business sending you a $5000 salary, you can easily provide that as clear proof that’s the cost of the business, every month.
So, that is the first lesson.
Move your savings into your business, pay yourself a living salary, and work on your business, not in your business.
I’m grateful for Brent and Elaine for these conversations.
For the details which might make sense why there are different dates in the Flow Studio journey. He’s a rough timeline.
2018 April - Flow Studio the product started as a side project
2018 November - Started accepting Stripe subscriptions
2019 June - Until June, Flow Studio operated under a sole trader business registration in Australia
2019 July - incorporated Flow Studio Solutions - a product company that does a side consulting to build the product.
2019 October - first quarter. This update.