Year One in Business

Today marks the first anniversary of leaving my salaried job and returning to life as a freelance contractor. Since that makes it also, technically, the anniversary of my life as a sole trader / small business operator, I thought it would be worth having a look at how it's all gone.

First, the stats. This year, I have:

- Worked for 5 clients - 3 "major", 2 "minor", covering the private, tertiary and government sectors. My two biggest clients were my two University clients, closely followed by my government client, which certainly tells me some things about where the bulk of my work will likely lie.

- Had 11 weeks completely off: the whole month of July 2015 (5 weeks), a week in October, two weeks over Christmas / New Year, two weeks over Easter, and a week in April. The April week was due to illness / surgery, but all others were planned family or vacation time.

- Worked an average of 3.75 days a week in my 41 working weeks. This wasn't evenly spread - there were weeks I worked 6 long days to meet deadlines, and weeks I sent things off on a Tuesday lunchtime and was not occupied with work again until the following week as I waited for client responses. The busiest stretch was from mid-February to the end of May. This tidal pattern is quite normal for professional services providers like me, and provided you can adapt to it, it is a pretty good way to work.

- Attended client sites / meetings an average of one day a week across my working weeks. There were weeks I traveled to clients two or even three days (especially during my very busy February-May period), but there were also weeks I didn't go onsite at all. The clear majority of my work was performed in my home office.

- Earned quite a bit more than I would've made staying in my part-time salaried role (I was working 0.6 when I left my former job), but a little less than my fulltime salary in that job. This seems reasonable given that I only worked about 150 days in the year compared with the 240 I would've worked fulltime (or the 144 days I would've worked staying part-time), and comfortably covered my need for sick, vacation and family time.

From a stats viewpoint, then, it's been a successful first year in business. My goals were to replace my part-time salary, work less weeks, and work at home more, so those goals have definitely been kicked to the curb.

The thing the stats don't fully show, though, is the lifestyle benefit and general easing of stress that moving back into business has afforded me. Project-based work, which is what I do, suits my temperament and my skills; I am very good at managing deadline pressure, very bad at ongoing situational stress. Working at home has its challenges, of course, but it suits me and my family needs much better than working in an office did - the sheer logistics of life are so much more doable.

I've been very fortunate to have had four big projects this year, which has enabled the income flow to be maintained and also helped me build more networks. Hopefully this will continue into 2016-17: signs are promising so far, as while I am in the final stages of two of my large projects now, I have been extended with one client until September, and have expressions of interest for a new project with a new client.

For this coming Year Two in business, I have three goals:

- Save 70% of the money needed to cover our planned 2018 overseas holiday from my earnings. My goal is to be in a position by next July to pay for all the items that we will book via travel agent: our flights, train and bus passes, travel insurance, and all prebooked tours / attraction passes. This will leave me well-placed to book and pay for the other big upfront expense (accommodation, which I will do myself mostly via Air BnB) over the course of the subsequent six months.

The way I think of it is this: In this first year in business, 30% of my gross earnings - 40% of net - went on paying for our new kitchen, and we still met (sometimes scraping, but we met!) all our other expenses. If my earnings are similar to last year, I will only need to save 20% of my gross earnings to reach the travel payment goal by the end of June. Even in the context of a year where expenses will be a bit higher, thanks to having two kids at high school, this seems like it should be achievable.

- Increase earnings by 5% on last year. This is an intentionally modest growth goal and I think I can achieve it.

- Take 8 weeks fully off, including 4 weeks in summer. (One of these weeks off will in fact be the first week in the new financial year - we are all having the first week of July off as a family).

One of the only things I didn't love about my work year was that the exigencies of my projects had me back at work on 3 January, when the kids still had 4 weeks of summer holidays left. This time I intend to be firm about closing up shop on Tuesday 20 December (the last day of the primary school year) and not reopening until Monday 23 January.

We'll see how that all goes!