Early in my time as a work at home mom, I went to a lecture on building your own business. Every entrepreneur needs diverse sources of revenue, the lecturer said. Don't make yourself a slave to your clients or customers the same way you were a slave to your employer.
Building on this advice, I always tell work at home moms to think about how you will achieve:
Cash flow -- revenue that comes in regularly to keep the lights on and rent paid.
Equity -- something of value that you're building that will keep paying out income as your pace of work slows, or even stops.
If you build a business dependent on cash flow, every time you take a vacation or have a sick child, you stop making money. But when you devote some of your time to building medium or long-term equity, you have at least the potential of continuing to bring in revenue when you take a break from working. That break may come because of a holiday or family needs, or it may be a new line of business that you want to build.
I'm a work at home mom with a writing and editing business, built on my 15 years of working for mainstream news organizations. For me, here's how the model looks:
Cash flow -- articles that I write for magazines, newspapers and the Internet, written as a work for hire or to which I sell all rights. Editing, consulting and teaching fall into this category too, since as soon as my hands lift from the keyboard or I finish a lecture, I stop making money.
Medium-term equity -- articles to which I retain some rights and can re-sell to another publication or as a compilation in book form. Also in this category: the working moms site I write for About.com, which continues to bring me revenue as long as About.com leaves the content online and people keep reading it.
Long-term equity -- my own business: CurrentMom. Or, if I write a book or a curriculum that I can license.
Every time I see a new business opportunity or am offered a writing or editing assignment, I think about it in this framework. Will it only bring me cash flow? If so, am I being paid well enough for my time?
If it's an article for a prestigious publication or a subject area I want to break into, that can make up for a lower rate of pay. Such an assignment does build equity in the brand of Katherine Reynolds Lewis, writer, since my reputation is an intangible asset that brings in more money down the road as it grows.
If it's a case of building equity, I evaluate how long it will take before I see cash flow coming in. I also think about how much equity I own in the venture versus my partner organization or individual.
What calculations do you make when deciding to take on new work? I strongly encourage you to be strategic about it and value your time appropriately -- when you accept work that is poorly paid, you prevent yourself from drumming up better work or building equity for the long term.