#84: My 2020 Business Audit & Lessons for 2021

Happy New Year! On today's show I talk about where my head is at for 2021, which is essentially that I am not setting huge goals for myself this year. I'm trying to continue to give myself grace—not be so hard on myself—and to focus on my personal wellness, while maintaining a steady income.

I did an audit of my business in 2020, crunching the numbers and analyzing the data, and I share that data and the lessons I learned—and how that info may be able to help you—in today's episode.

When the pandemic hit in March, I lost my primary anchor client (which is still "on hold") and a few smaller assignments that were in the works. I had to immediately figure out how I was going to pay my bills and find new clients to recoup about 50% of my income. I quickly sent a mass email to my larger network—current clients, past clients, other freelancers and other colleagues—and let them know I was available for work and how I could help them.

I received a great response, which was so heartwarming. Some of that even led to new clients. From that one email, I earned $40,000 from new clients last year, and another $10,000 from current editors with new assignments.

You don't have to be hit with a pandemic to send out an email like that. I've sent them out individually on a much smaller basis, telling clients and colleagues that I have availability coming up and listing the ways I can help.

With other work in 2020, I was able to make six figures again, but it was way less than I earned in 2019, even though I also received a $20,000 PPP loan.

This financial stress, along with the anxiety surrounding COVID-19, caused me to experience anxiety like I never had before. Initially, in March, I interviewed therapist Mira Dineen on the podcast to talk about dealing with that anxiety, which was a great episode (all links below). Soon after, I brought on my acupuncturist and friend Rachel Brumberger to talk about embracing self-care without the guilt, whether we're in a pandemic or not.

But later that summer, with my newly discovered and self-diagnosed anxiety, I sought out therapy for the first time. My new therapist gave me some great tools to use when I was feeling anxious and also before I was feeling anxious. You can hear about those tools in episode #70.

Because of the outreach I did in March, by August I was back to my pre-pandemic income levels, without the big anchor client I had lost. But it wasn't always steady work. September and November were lighter months, and I was constantly working to get new writing assignments, which I don't do in a typical year. But one-off writing assignments and a few new anchor clients helped me pay the bills and get to six figures in 2020.

In this episode, I also break down the percentages of the type of work I do, the type of clients I work for and where that work came from (networking, referrals, social media, past job connections or LOIs).

A huge chunk of my work comes from past job connections and ongoing referrals, which was not a surprise to me. And most of my work comes from membership associations. The majority of my work is managing editing, followed by writing, then copy editing and proofreading. With the loss of my anchor client, for which I was a managing editor, I thought that percentage would decrease a lot. But in 2020, the income from managing editing was still 57% of my income, partly because I had that main anchor client from January to mid-March and because I gained a new anchor client by August.

Managing editing is my favorite type of work, and I'm trying to figure out how to increase it in 2021. I can't manage a ton of magazines because it takes a lot of time, but if I'm able to gain more of these types of clients, I may be able to outsource pieces like some of the writing.

The second type of work I do is writing. Writing pays well, but I don't want to write every day, all day. But new writing assignments helped me survive 2020 because it's easier to get one-off assignments when I need them, as opposed to ongoing anchor clients. Plus, I write about health care, which came in handy last year.

Although I did time tracking in the fall and winter of 2020, I did it on paper primarily to keep me on task. But I had little interest in doing the math from all those scraps of paper, so I still don't have as much data as I would like to show me how I am spending my time. Therefore, I started using the time tracking app Toggl in December and hope to use it all year so I can have better information on where my time is going.

If you haven't already, I encourage you to crunch the numbers for 2020 and analyze what you liked doing, where the money came from and the type of clients you enjoy working for. Hopefully, those three areas will connect—or you can make a plan to figure out in 2021 how to work for the clients you love, doing the work you love, for the highest financial reward.

Here are a few questions to ask yourself:

What five things did you love doing in 2020? Write them down.

What five things in your business did you dislike or were frustrated or bored by?

Are there things you want to accomplish or achieve, but you've just felt stuck? How can you get unstuck from projects? Is 2021 the time or should that wait till after the pandemic? Can you take baby steps in 2021 to set you up for an amazing 2022?

Were there red flags with clients? Does that mean you need to deal with those issues or just fire that client? Does that bring up things you personally struggle with that you need to deal with?

Let me know what you learned from your own business audit and how that affects your plans for this year! Message me on Twitter @MelEdits or email me at melanie@meledits.com. I really love hearing from you.

Biz Bite: Use Toggl

The Bookshelf: "Hidden Valley Road: Inside the Mind of an American Family" by Robert Kolker

Resources:

Episode #3 of Deliberate Freelancer: Host a Solo Business Retreat

Episode #40 of Deliberate Freelancer: Reflect, Analyze and Plan Now for the New Year

Episode #53 of Deliberate Freelancer: Pivoting and Finding Resilience

Episode #48 of Deliberate Freelancer: How to Cope with Coronavirus Anxiety, with Therapist Mira Dineen

Episode #52 of Deliberate Freelancer: Embracing Self-Care without Guilt, with Acupuncturist Rachel Brumberger

Episode #70 of Deliberate Freelancer: Techniques to Deal with Anxiety from My New Therapist

Episode #79 of Deliberate Freelancer: Six-Figure Freelancing: Consistently Sending LOIs and Using Upwork, with Laura Pennington Briggs

Episode #5 of Deliberate Freelancer: Track Your Time for Better Efficiency

Episode #26 of Deliberate Freelancer: Delegate, Automate and Terminate to Improve Your Business

Episode #13 of Deliberate Freelancer: How to Set Better Goals for Your Business, with Andrena Sawyer

Episode #44 of Deliberate Freelancer: How to Track and Reach Your Goals (creating S.M.A.R.T. goals)

The Writers' Co-op podcast, December 7, 2020 episode: Our End-of-Year Biz Audit