Whether Covid-19 pushed you to become creative after losing your job, or you just wanted to work for yourself, self-employment rates are on the rise. More people are starting their own businesses than ever before and finding success!

If you are looking to become self employed or already are, we’ve got some tips for you to be successful and avoid common pitfalls.

Be Ready for Tax Season

Tax season for a business is a much different beast than for an individual. If you’ve filed your business with the government, you’ll need to do two different taxes, your personal and your business, and these two processes are different.

First, self-employment taxes are heavier than if you are employed with a company. When employed by another, you pay a little under eight percent income tax and the company pays the other half. If you are self-employed, you are in charge of paying the total 15.3 percent tax. If you aren’t saving up to pay that tax, it might be a heavy hit to your savings.

You’re also expected to pay your taxes quarterly rather than yearly when self-employed. If this is your first year being self-employed, you’ll need to estimate your earnings and make the payments off of that. Then, at the yearly tax season, you send a finalized tax statement of your earnings and either have to pay more or get a return depending on the situation.

It’s also smart to consulate a self-employment tax expert or accountant to get the finer details of this. Pioneer members also get a discount on the self-employed version of TurboTax to help you put together your personal and business income and expenses.

Don’t Overwork Yourself

It’s very easy to feel a heavy burden when self-employed. All of the responsibility falls to you, and that stress can easily lead to overworking. A common mistake with the self-employed are pushing and overworking too much, which can lead to frustration, mistakes, and health issues.

Set a normal schedule for yourself and learn to step away from the work. Give yourself time to relax and recover from the stress and efforts expended. Overworking can have nasty long term effects on you and your business. Set boundaries to protect yourself and avoid things like burn out and too much stress.

Always Market Yourself

Whether you do contract work for a business or set up an Etsy business selling handmade crafts, you should always market yourself for your next paying job. Especially if you are finding success now, it might feel right to put a pause on your marketing efforts. Don’t do that!

You should always market yourself and your business, even if you are busy now. You can always say no to new business coming in, but you can’t make new business come out of thin air.

This could include paying for advertising, keeping your website up to date, and posting to your social media. Any aspects that are working for you, keep it up at it all the time and hopefully, you’ll have a steady stream of business coming your way.

Have a Long Term Financial Plan

What is your long term plan for your business? Are you going to expand into other products? Hire some employees? Grow into new markets and regions? These are all important goals and questions to ask yourself and your business.

Once you know what path you want to take, start planning how to finance it. Wanting employees to help with the workload is great, but you need to be able to pay them before you start. How much money do you need to be making before hiring someone on?

Whatever your business goals are, craft a long-term financial plan to make sure you know how much it will cost and at what point in earnings you can accomplish them.

Don’t Use Your Personal Money and Credit

When starting a business, you’ll need to use some of your personal money as seed money, the personal investment to get it started. But once you get going, you should set a barrier between your personal money and your business money.

A great way to do this is to open up a savings account, a checking account, and credit card for your business. That way, when you have money coming in, you don’t need to remember how much is yours versus the business and potentially mix up the money. As you get more busy, that seperation becomes very important, especially if you utilize credit cards and juggle multiple payments.

Pioneer offers a wide host of business products, including savings accounts, checking accounts, and credit cards perfect for small businesses and the self-employed. You can keep your personal money and credit score safe by opening business accounts, along with all of the extra benefits that come from Pioneer accounts.

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