I’ve been thinking a lot about money, both from a business and personal standpoint.
As we approach the end of the year, I’m getting excited about doing some serious number crunching for my business. A little geeky, I know, but I run a blog about business, so you already knew that. But since I declared 2010 the year of numbers, I’ve improved my bookkeeping habits, and now I’m curious to see what all those numbers tell me. I’m looking forward to examining my business from lots of angles to see where I’m making money and where I’m not. This is valuable information I’ll use to decide where my business is headed in 2011.
Not only have I made a commitment to my business finances, but I’m also much more focused on taking control of my personal financial health. Ultimately, you can’t run a successful business without stable personal finances, so I’ve made a commitment to building my savings and funneling money into my retirement account.
But as I spend more time thinking about money and how it relates to me and my business, it makes me even more excited to find ways to help you get a handle on your business money situation.
So today, I’d love to know, what are your issues with money?
Do you struggle with bookkeeping?
Do you want to price your products better?
Do you want to figure out how to earn what you’re worth?
Do you just want to know how to make more of it?
I’d love to hear your questions and concerns, so feel free to share them in the comments below!
__________________________________
PS. Today is the last day to grab your two-week free trial of The Creative Empire. Tara and I are putting together a fantastic seminar featuring Amanda Steinberg from The Daily Worth, and it’s all about, you guessed it, money. You won’t want to miss this (Amanda is one smart lady) so head over to The Creative Empire and sign-up today.
Oh dear… Money… Pricing my work is always the hardest thing, but I think I’ve hit on a good system for my work and my worth. Now the hard part is how to get the word out about my art. What sites are a good fit, can I afford to advertise there? What photos should I use. ACK! the price of the ad… sigh, it will come, right?
Gosh, money seems so tied in with every aspect of running a small business. I am constantly haunted by these questions: Am I pricing my work too high? Too low? Are other pay-to-use shop sites (like Big Cartel) a good fit for my work? And, as Cat said: advertising. Where? How much is too much to pay for ad space? How to tell if a blog or website is worth it?
And, oh yes. I struggle with bookkeeping. A pile of receipts that are waiting to get filed is about the extent of my books right now! My business is rather tiny at the moment, but still….. AHHHHHH!
Dear Megan,
Good for you to be on top of your finances. The only area that I seem to be fumbling with are my business finances. This being my first year selling, I find if it weren’t for my quarterly sales tax reports that I must submit to our government here in Canada, I would just ignore the chore until year end.. and we all know what that does to our sanity! I pretty much operate my business solo & I find it hard to keep on top of everything. My book keeping sit way back there in the trunk of my caravan.. I completely agree that the information gained from up to date financial data is by far one of the most crucial elements to running a profitable business. I am looking for someone to do this chore for me.. and to supply pie charts, profit/loss statements.. I love looking at all this information as it is invaluable.. But I have come to the conclusion that I need to hire someone to tabulate things for me, as this is the only way I will get it done. How often do you sit down to crunch the numbers and how much time do you spend entering data every week/ month? Anne
hi anne – you might want to check out outright.com – it’s a virtual bookkeeping program (and it’s free) and it puts a lot of your data into pretty pie charts and graphs as well!
I don’t struggle with bookkeeping as I am a bookkeeper but I do struggle with getting more money to track. I have two businesses. One is a service business ~ virtual bookkeeping and the other is a sewing business with two friends. Neither one is doing fantastically well right now and I am looking toward 2011 to give at least the sewing business a booster shot.
I finally hired a bookkeeper earlier this year. Best thing ever! Since the summer, I’ve been thinking about what direction I should take/try next year to increase my exposure and sales, to take my business to the next level. I feel I need to try a trade show such as the New York Gift Show. That will require a lot of money, so I’m strategizing how to do it, e.g. apply for a loan and what I need to have in place to fill orders, and looking at my prices again.
Finances are a part of my everyday life. While I simply love my job (running Darn Good Yarn) I do “work” for money and spend plenty of hours working on my site and not going to yoga. While, like you Megan, I do my EOY finances, I keep a close eye on cashflow and P&L’s bi-weekly. This helps me to set goals. If I had a slump in sales, it’s easier for me to remember what was maybe happening in the past two weeks rather than a year look back. Managing pricing is a numbers art to me. It always requires continuous tweaking especially when couriers (UPS, USPS etc) are offering discounts (pass along savings) or increasing rates (like UPS in the new year).
Staying on top of my numbers though time consuming (but I love it too!) has allowed me to offer a better line of products at very competitive costs.
It’s great to hear that someone else is thinking about retirement. I am a budgeter and I will tell you that if I needed to expand or hire someone, to have a backup has been a key ingredient to my growth because sometimes those ideas don’t just take off, they need time to cultivate and you need to bankroll them.
I would also like to add, my sister intro’d me to mint.com cool site if you have problems with figuring out where your money is going.
My bottom line: live below your means, budget rinse and repeat–it pays off.
I struggle with my business bookkeeping but not my personal or household bookkeeping. I watch that like a hawk but I slack on my business. I really need to work on updating my receipts and inputting information for my handmade business like I do for my personal accounts. Its challenging finding the time to handle all of the different aspects of running your own business when you are the only one. Hiring a book keeper may be beneficial!
I also would love to see more information on how to price your products for what they are worth as well as figuring out how much your customer base is willing to pay.
Bookkeeping is something that I tend to put off, although I know it’s important. I need to either take a course in bookkeeping or hire a bookkeeper.
But what has got me concerned and puzzled at the moment is the fluctuation of the conversion rates. I sell mostly in the US, so in USdollars, but I live in a euro country. I had raised my prices a few months back, based on the euro, then converted into dollars, but now the dollar has plunged again, and my profits have taken a blow. If I went strictly with the rates, I would be changing my prices very often. At the moment, a dollar is worth only 0.71 euros! Anyway, this adds an extra challenge to bookkeeping, as profits and costs must be converted according to the conversion rate at the time of the transaction.
I’d love to hear any suggestions or tips from other euro sellers.
I work from home doing freelance marketing/graphic design and operate my stationary shop on Etsy. I tend to do my business bookkeeping at the beginning of each month when I need to bill my marketing/graphic design clients. It’s also when I get my email notices about bank statements being available. However, I think if I was doing more business from the Etsy site, I would have to modify that current plan.
I struggle with how to promote and bring in more business for both. How to find good freelance projects and how to drive more sales out of my stationary business? How do I plan for growth in the stationary shop?
Yes!! Money and money management are huge areas that need more work in my business. I struggle often with pricing, bookkeeping, taxes, management – all of it! I would love to be more organized and purposeful.
Hi! Megan, this is really my concerning about it. When you see your products couldn’t sale on your store, so what will you do or lower the price? And you have to think more when you cut dow the price you couldn’t go back, it will decrease your products value or your customers will think your products didn’t like this value you marked up before. So, it is really critical point when you want your cash flow keep running. Think it wisely before doing this.
I also REALLY struggle with bookkeeping. I’m in the same boat as JoAnn: “A pile of receipts that are waiting to get filed is about the extent of my books right now!”. I was great at it when I first started my business, filling out my spreadsheets and filing receipts, but now I’ve gotten lazy and am months (blush) behind. Basically, if I have spare time, I’d rather spend it creating, networking, researching, or anything besides administrating. I don’t think I can afford a bookkeeper, so I think my next step is to find a magical software program that will make it easier and more time efficient for me. Anything you suggest? 🙂
Earning what I’m worth, doing the things that i want to do, is the piece I’m working on right now… Money is such a complicated topic, and so I am trying to work on changing my relationship to money as well. So, yeah, earning what I’m worth, and making more, that is where I am at going into what is almost 2011. Would Love to hear you and Tara talk about those things.
Thanks for raising this issue Megan. I’m one of those strange people that loves numbers and enjoys beading. I saw that you mentioned Outright, which is great because its free. Some other inexpensive options include QuickBooks online (starting at $12 a month and what I use) and / or using a virtual assistant to input everything. I’ve heard Shoeboxed.com is good for that, although I have not tried it.
In my experience its the documentation (read entering in all those dang numbers!) that gets neglected, and then you can’t get a good picture of how the business is doing.
My biggest struggle is that my income from month to month varies wildly. I’ll have a great month followed by a terrible month. I’d like to be more in control of the fluctuations! I’m working on building additional streams of income for the not so good months but it’s a slow process.
Oh! You know I LOVE this topic! 🙂
Honestly, I DO struggle with doing my own bookkeeping. I make it a point before I ‘allow’ myself to do my billing (and in turn get paid), to update all my bank accounting in QuickBooks. That keeps me on track each month.
I love Outright, Mint and Quickbooks for small business accounting. Each has pros and cons. You just have to find a program and process that works for your own personal situation.
Finances are what I struggle with the most in my business. I took some financial classes a few months ago in the hopes that it would clarify things and I had every intention of following through but then I pushed aside to deal with new products, photographs, shipping orders, ordering supplies and the list goes on. I did hire a book keeper but I still feel a little lost when I stare and my P&L and Balance Sheet each month. Another part of my financial to do list was creating a yearly budget so I am able to see what I need to make to push my business forward….sigh Sometimes I wish I had a financial fairy godmother who could make all of this simple for me. 🙂
Alana
G’day,
I have ADHD-i (inattentive, daydreamer,distracted,etc) so working with my hands, is great for that. But when it comes to money, pricing, keeping records and so on, I get dazed and confused. I drown in piles of paperwork
and don’t keep track of supplies costs. I end up guesstimating final prices (if I even get that far often) and know I shortchange myself when it comes to labor costs, just to compete with factory-made jewelery. I hate all the paper piles, receipts and files involved. …. and the budget factory churned competition…..but you get what you pay for…usually, with my works of love, at a bargin price!
For me pricing my items which technically is the same as pricing for what my time is worth. Plus bookkeeping for me is such a drag. Receipts? What receipts?
I need more understanding about which areas to put my labor into in terms of best return. I have trouble knowing how much is too much for new business development before adjusting course. Google Analytics would be nice to understand better in terms of what financial decisions/investment areas can be determined by the patterns shown. As for bookkeeping I have a great spreadsheet modeled after the way the IRS likes things organized for small home based business.(My HR Block Tax person gave me a booklet with all the columns set up for long hand and my daughter helped me make it into a live excel file that carries over monthly expenses w totals.)
I am a bit discouraged to see so many Artisans downsize or abandon their product lines and Etsy shops for the alternative income streams of coaching, selling blog ads and running e-classes. It is a trend that has grown huge over the past year so I know it is lucrative. As a former adjunct instructor, I guess I can live with that reality. Afterall this topic is about what people will pay us for. Knowledge and hope are understandably big sellers these days!
Money in and of itself is not an issue. I love it!
OK, so that was a bad joke.
I used to be far less worried about it and how to make some, back when sales were a lot easier. Nowadays, though, I have to have a “dog and pony show” to go to the venues, so that I can make the same sales that I used to make without too much stress. Is that bad? Not really. But it definitely is more work.
The hardest thing is looking at a show and tallying up the receipts, and realizing how much of it is going to places I would rather not spend quite that much on: taxes, insurance, gas. I know that the taxes are how our country is run (and I promise not to go into politics), and that the insurance means that a critical failure with one item will not cost me every penny I have, and that I need gas to get to the venue where I make the sales. But it seems like each year these three things are taking bigger and bigger chunks out of the cred that I am making — which is getting harder and harder to make.
It just seems like more and more I’m being punished for succeeding – and that can be dis-heartening.
On the other hand, it is still good to know that there is an income from my work. The money aspects can have their annoying aspects, but I keep reminding myself that at the end of the year I’ve brought in more than I have spent. That about sums up success, neh?
My big issue with money may not even be a money issue.
I want to learn how to accept that what I do is worth money. I want to believe that what I make and what I do is good enough for money. Really, I want to learn how to believe that I am good enough.
Thanks for your concern with this issue. I have been thinking about it alot lately especially as tax time is looming. I started a part-time freelance gig this year so I have questions regarding taxes. Also, bookkeeping is a big one for me to!
I started my design services out at a low rate to build a portfolio of work that doesn’t revolve entirely around my fulltime job. How do I go about raising my rates with clients that I have established and not seem to out of the ballpark for future clients. Right now I am working with small business owners and I would like to attract more of that clientele.
Any thoughts on these would be greatly appreciated.
I love getting your emails. They are soooo helpful!
Thanks for all the great work!
I live in Australia and things are a little different here! I want to know more about marketing (and affording it) in the US online market.
I am also worried my pricing is all wrong because I buy my supplies in Australia where things are more expensive (we’re a big island so getting anything here is costly and we all bear the costs in our purchases). How can I be sure I’m pricing things correctly if I can’t pop into an American store to do comparisons etc.
Thoughts?
Money is such a hot button issue for me. I am a successful designer but have many questions about working more efficiently and taking financial risks (hiring help, taking loans) that would probably propel me to the next level. I can easily navigate the how to’s of loans or hiring someone hourly/part time. Its making the much larger leap that keeps me so stuck. There is plenty of info about bookkeeping out there (MYOB is what I have used for years) and so little about identifying when and how to make the leap.
Keep up the great work.
Money huh? I guess my biggest issue is pricing my product better. Because A LOT of money and time go into each of my products, the formula that most use to calculate the wholesale price and the retail price puts my product WAY off the charts and puts it totally out of reach for most buyers. So, instead I end up using the “wholesale” price as my “retail” price just to get some sales. Not a good solution I know, but I don’t know what else to do in order to keep some money coming in… Frustrated!