If you’re looking to go into online business or become a digital entrepreneur, one of the most important questions you’re probably asking yourself is “How in the world can I replicate the benefits that I’m likely leaving behind from my 9-5 (if you get solid benefits). I’ve thought about this quite a bit and wish that I’d talked to a lot more entrepreneurs before quitting my 9-5 about thoughtful benefit design. Before we get into this episode, I do want to remind you that that I am NOT giving financial advice, you must do your own due diligence and research before you make any decisions that impact your finances. Also, I’m not a financial expert. With that in mind I want to share some thoughts around designing a benefits package and some things that you might not have considered.
Welcome to the Brand Building Lab, I’m your host Michelle Jackson and I help online entrepreneurs design businesses that lead with empathy and intention while earning money.
*In order for me to support my blogging activities, I may receive monetary compensation or other types of remuneration for my endorsement, recommendation, testimonial and/or link to any products or services from this blog. Please read my disclosure and privacy policy here.*
Listen to the Episode
Related Posts
- Women and Money Series (Michelle is Money Hungry)
Catch
If you’ve recently left your 9-5, you’ve also left your old benefits. If you’re looking for an all in one resource to help you sign up for health insurance, set up a self-designed benefits package that helps you allocate funds towards retirement, future vacations, sick days and taxes. Catch may be the perfect tool for you. Catch is a personal payroll and benefits app that allows you to organize all of the important aspects of creating and maintaining a benefits package as a freelancer or digital entrepreneur.
For those of you looking for health insurance and dental coverage, Catch has a search function that helps you find the best coverage based on your location, age and who you would like to have covered with your policy. If you’re looking for insurance during Open Enrollment or you have a new qualifying event, use Catch to find an ACA or Affordable Care Act compliant health insurance policy today.
I really wish that I had a tool like this when I first started my online entrepreneurship journey. It just makes things so much easier. I love that it helps you to set aside tax payments, sick days and PTO.
Catch truly empowers its users in a way that I haven’t seen for smaller online entrepreneurs. I’m a proud partner of Catch and urge you to check Catch out. Go to the following link for more information: https://creatorsgettingpaid.com/catchbbl
How to Design a Benefits Package
If you’re lucky enough to be employed by an organization that offers benefits, there’s a point where you hopefully are negotiating your benefits package. In an ideal world you’ll be asked questions such as:
- How do you want your PTO to look like?
- Do you want paid sick leave and PTO? How many days are you looking at?
- How many weeks of maternity or paternity leave do you want or are eligible for per the company’s rules.
- How much do you want to invest in your retirement?
- Per diems for travel
- Education costs covered
- Business retreats-how often and what professional purpose do they serve
As an entrepreneur, you’re basically asking all of these questions…to yourself and you’re having to pay for those benefits. This is so challenging to do because in the beginning stages of most businesses-the entrepreneur is likely not making a lot of money and is reinvesting into their business. Here are some more defined questions to ask yourself from the perspective of a entrepreneur.
- What does my cash flow look like and how does that impact my benefits planning? If you know that there are certain parts of the year when you’re earning more, is it possible to pay an expense annually vs. monthly so that you can realize some savings and have that expense covered?
- What are my medical needs? Weirdly, I’ve always had dental insurance since beginning my business journey but there were points in time when I didn’t have health insurance. Incredibly dangerous to do in the US with the high cost of healthcare.
- What happens if I get sick? How do I prepare for lost work time? I caught COVID in October and I was financially ok, but that experience has definitely changed how I’m planning for sick leave. I’m assuming that I will need up to 10 days of sick leave in a year. Then, I think about my earnings per day goal. I multiply that by 10 and that’s the amount I need to save so that I am covered. Here’s an example of what I mean.
- Daily earnings goal: $400 a day x 10 days=$4,000
- Professional development costs-We should be constantly learning. Professional development could include (but, not limited) to the following:
- Conference attendance-I typically try to cut the cost by speaking at an event. This is good for growing my brand and for lowering costs. I still have to budget $1,000 for travel, accommodation, food and fun. This is per event. If I’m attending 5 conferences in a year-that’s $5,000 allocated for the year.
- Courses or Coaching-I take courses, webinars, or coaching calls in order for me to learn things faster. The cost depends on the year and my goals. For this episode, I’ll say that I allocate up to $5,000 for this.
- Wellness benefits-Perhaps wellness is an important area of focus. Maybe you’re wanting to go to yoga weekly, get a massage once a month or enjoy a Korean Bathhouse from time-to-time. How much do you think you will spend monthly on those benefits? I take free and discounted yoga that is offered via Eventbrite. My town often has unique and fun events offered on a weekly basis at a discounted price.
- Retirement and other long-term benefits-How are you proactively planning for retirement? Again, due your due diligence:
- Do you have a Solo 401(k) or Roth IRA set up?
- Life insurance policies?
When I first started working for myself, I really didn’t give intentional benefits designing enough thought. While it was true that I wasn’t earning a lot in the beginning, I could have still a hell of a lot more time being thoughtful around how I could better take care of myself and treat my business like a business from all aspects of its design. Over time our small efforts typically accelerate over time. Here’s an example of what I mean:
- Maybe you just plan financially to cover the cost of 1-3 sick potential sick days a quarter. $400-$1200 instead of $4,000
- Perhaps you start investing for retirement at a small but manageable amount that you can commit to month with the intention of raising that investment as you begin to earn more. I’m talking $25, $50 or $100 bucks a week or a month-whatever you can do.
- Perhaps free fitness classes is how you cover your wellness expenses. You can find classes via: Eventbrite, Facebook Events or Meetup.com-if you’re in a larger town or city, it’s pretty easy to find these resources. You can also check out The November Project-a fitness collective that uses your city as its gym. There are chapters all over the world. The workouts are pretty intense too.
Fortunately, there are resources and organizations that may be able to help you with both the planning around designing freelance/online entrepreneur benefits and the logistics of the process. Or, point you towards recommended resources.
- Freelancers Union-I also love that they have meetups and keep up to date on legislation that may impact your business
- Small Business Association
- National Minority Business Council
- National Association for Self-Employed Business Owners
- Local or National Chamber of Commerce
There’s also the logistics of organizing your benefits and I’ve found a tool that could help with this process.