Artists Define Their Own Business Success

Artists Define Their Own Business Success: At Peace With Money

Have you ever noticed that a lot of business advice focuses on how to get wealthy, fast? It’s as if many people view business as a pathway to the motherlode, and little else. But not everyone wants to be the CEO of the next Fortune 500 company. And that’s ok! It just means we need to turn somewhere else for our business advice.

The conversation I had with Megan Auman a few weeks ago was all about another kind of business mindset – seeing your business as a way to sustain your artistic pursuits. Instead of the end goal being amassing the world’s wealth in your bank account, Megan talked about small business as a strategy for fueling an artist’s livelihood. Here are a couple of my favorite points she raised during our chat.

Find Advice that Speaks to Your Vision

So much business advice speaks to people who want to run a million dollar company. Megan indicated that the prevalence of this point of view in business circles could often be hurting artists or driving them away from business altogether. For this reason, it is so important that we start talking about different goals and models for business.

In my last post, I mentioned that artists often want to spend more time doing their creative work, and the best path towards making that time is to make more money! Even if artists don’t want to be a CEO at a computer all day, there is still an incentive to run a profitable business. The key is finding voices who understand and respect what artists need.

The Profit First model and Megan’s courses are two great resources for an alternative view of business. Rather than seeing business as a race to amass capital, both sources look at business as a way of meeting the owner’s needs and sustaining the work they enjoy doing.

Business Automation

While we were talking, Megan brought up the 4-Hour Work Week, the hugely popular book by Tim Ferriss. She mentioned how the book highly encourages business automation, so that business owners can spend more time lounging on the beach. Business automation can also be a great tool for artists and makers, according to Megan. However, instead of beach bumming, artists can use the time freed up by automation to spend more time working in the studio, doing the things they really love.

Artists Define their Own Success: At Peace With MoneyOverall, Megan stressed the importance of understanding what you really want from your business and your life, and structuring it to include more of what you want. Whether this is more time in the studio, more time with your family, or less time spent on certain tasks, automation helps creatives focus on the work they really want to be doing. I have written a little bit about how automation can also be great for your finances, have a look if you like!

I hope you enjoyed these nuggets of wisdom from our conversation. If you haven’t already, definitely check out the full interview posted on Facebook. Megan is a wonderful person with lots of good insights into creative business, which you can look into here. And of course, please don’t hesitate to schedule a call with me if you’d like to talk more about Profit First and setting up your business to meet your needs and desires.

Angela

Image Source: Joshua Coleman

Artistry and Solopreneurship Can Coexist

In our society, we often hear this myth of the “starving artist.” We see art and monetary success as polar opposites. I recently had the pleasure of interviewing Megan Auman, a jewelry designer and business coach. Her two livelihoods alone defy our myth about art vs. money, and Megan’s philosophy follows this same sentiment. While we were talking, she made a couple of points that really struck me that I wanted to share with you all.

Artists Need Money

One great point Megan raised, is that artists can often be found talking about how they just want more time to focus on their art. Pursuing the business aspects of an artistic career is often seen as not aligned with this goal. In reality, however, artists need money in order to support themselves and have time to do their creative work. Megan put it simply, saying “The more money you’re making, the less stressed you are, and the more energy you have to create more work.” Building up the practical side of your business so that it generates income can actually enable you to spend more time doing what you really love.

Creativity and Business Sense Can Coexist

You might have read the title of this post and scoffed. The idea that arts- and business-intelligences can’t coexist runs deep for us! However, Megan raised the point that good business people have many of the same skills as artists. Skilled business people are often creative, good at finding solutions, and able to think in nonlinear ways, just like artists. Business skills are a capacity that can be grown and nurtured. Even if you’re an artist at heart, through self-education and inquiry, you can develop your business skills. The two realms are interrelated and can easily combine to shape your livelihood.

I really enjoyed speaking with Megan because our goals are very similar; we both want creative solopreneurs to have profitable businesses that allow them to spend time doing what they most want to do. Whether it’s their creative work or other pursuits, all of those things take financial security. Business success is within reach, even, and especially if you run a creative business. I encourage you to watch the full interview here and check out Megan’s resources, Artists & Profit Makers, and Market Your Selfie, for more of her wisdom. Many of Megan’s ideas are well-aligned with Profit First concepts! If you want to talk finance, check in and schedule a call with me on my Services page. 

Angela

 

Image Sources: Rosie KerrS O C I A L . C U T

How to Financially Survive Holiday Inventory Prep

Inventory and Cashflow During the Holidays: At Peace With Money

The holiday season is fast approaching, with Halloween on the way this week. With this season comes the time forstocking up your inventory. You want to make sure you have plenty of product available for when shopping season begins! The challenge of this time of year is that you want to build up your inventory while still having cashflow. That is, manage your financial responsibilities while increasing your spending on supplies. This can be a difficult balancing act for solopreneurs, so I’ve made a quick list of tips to get you through your holiday prep safe and financially sound!

Holiday Inventory Prep Tips

  • If you’re taking orders, consider securing a deposit from your customer so you can pay for the supplies before production.

 

  • Buy wholesale! Make sure you’re not paying sales tax for materials your plan to resell. This will likely require that you obtain a resellers permit for your state, so be sure to check. Negotiate the best terms with your suppliers. Can you get a discount for buying in bulk?  Will they give you net 30 or even net 60 payment terms, meaning you can receive the items now but not have to pay for them until later? If you find yourself feeling nervous about asking these things of your suppliers, please check out my article on rejection therapy for a little inspiration, then pick up the phone and stick up for your business!
  • Increase the dollar amount of each sale. For example, when I ran my jewelry business, I was able to do this by selling sets of jewelry. I would sell a pendant combined with a pair of earrings, making it easier for customers to make the decision to spend more money at my business. Even though I gave a small discount, I still increased my sales, and my profit!

Manage Cashflow and Inventory: At Peace With Money

  • Do you know your best-selling item? Make sure you have plenty on hand for the holidays! This will increase profits come shopping time.
  • When it’s all over, use a portion of your profit account to celebrate. You’ve worked hard during the holiday season. Make sure you reward yourself. To learn more about a profit account, I recommend downloading the first 5 chapters of the Profit First book on my website.

If you have more questions about balancing inventory and cashflow, don’t hesitate to schedule a discovery call with me! 

If you want to read more about the issues of inventory vs. cash flow, I recommend checking out my articles “Why Selling More Doesn’t Mean Making More” and “The Stages of Financially Growing a Business.”

Angela

 

Image Sources: Drew Beamer , Annie Spratt

Create Your Own Paycheck

A Solopreneur's Paycheck: At Peace With Money

I know you like being your own boss, but do you ever have paycheck envy? Do you ever wish you could get a paid vacation? Do you get tired of the feast or famine in your personal income? Especially with creative or freelance work, this can be a real issue for some of us. Fortunately, when you create money systems around your business income, you can create a solopreneur paycheck, by paying yourself first.

The System

Setting up a paycheck for yourself is simple. Every time you collect income, set aside a portion in a separate account just for your pay. Then pay yourself out of that account, but leave a portion in the account. The balance in this account will build over time so that you eventually have a cushion built up to even out those rough patches and even pay your self while you take a holiday.

Determining Amounts

How much should you pay yourself each round? A good place to start is keeping track of your personal expenses and ensuring you cover those every month. After that, it’s a simple question of what to do with any extra income you may have made that month. You may choose to leave it all in the

Create Your Own Paycheck: At Peace With Moneyaccount to build up your balance, or take out an extra allowance if you’ve earned a reward. Setting up rewards systems for yourself can be another motivator to keep you money systems consistent, organized, and ensure they meet your needs.

More in-depth information on creating a solopreneur paycheck can be found in the Profit First Book. The first 5 chapters are available to download here on my website. If you’re intrigued by this idea and think you might benefit from a consultation with me, don’t be afraid to reach out and book a discovery call!

Angela

Image Sources:  Cody Davis,  rawpixel

How To Pay Yourself First

How To Pay Yourself First: At Peace With MoneyI use the hashtag #PayYourselfFirst all the time, but what does it really mean to pay yourself first? It’s a core aspect of Profit First philosophy. It’s also an important part of how I organize my own personal finances. I want to make sure all my readers know how to pay themselves first, in their business and personal finances, so let’s dive in.

Keep What You Earn

“Paying yourself first” is about having a system in place to make sure that you get to keep a portion of your earnings. In my last post on automation, I talked about David Bach’s book, The Automatic Millionaire. Bach includes the concept of paying yourself first in this book and applies it to personal finances. He suggests setting aside savings right off the top of every paycheck, even before breaking it down for living expenses. Users of this system do quite literally pay themselves first! In his system, the money goes to retirement savings accounts, but the system can be adjusted in both business and personal finances to fit your own needs.  Taking a cut for yourself from each paycheck is and important but easily forgotten practice.

Beyond Corporate

So, how does this apply to solopreneurs? If you’re working outside the corporate world, you’re probably working without health and retirement benefits. This is all the more reason to set up a system to take care of these needs. Setting aside money to address health and retirement costs is important for many people, but especially so if your main source of funding for both is your own business. 

How to Pay Yourself First: At Peace With Money

I always say I want to help my clients work with the Profit First system to align their business profits with their life goals, and I assume one of those goals is to support yourself in your health and retirement! Every financial aspect of your business can be set up with this in mind. Your products should be priced appropriately so that you earn something for yourself, rather than just simply covering costs. A part of that money should be invested into your future and your healthcare fund. This is the Profit First system at its core. This is what I want to help solopreneurs work towards with their businesses.

Take a look at your personal and business money systems and ask yourself, do you pay yourself first? Are you setting aside money to support and reward yourself? If you’re interested in more on this topic, I highly suggest downloading the first 5 chapters of the Profit First book through my website.

 

Angela

Image Sources:  Alisa Anton, zixuan Fu

Business Expenses Are Not Free

Business Expenses Aren't Free: At Peace With Money

There is a common misconception among business owners: thinking that “I will write that off as a business expense” means it’s free. Let’s bust this myth! Our business (and bottom lines) will be all the better for it. 

Why Do We Think This?

The root of this misconception probably stems from our experiences as employees of larger companies. As an employee, business expenses are often “free” in that you get reimbursed for them or your company is covering the expense. However, now that you own your business, the expense is included in your bottom line. Business expenses no longer disappear into the ether of corporate bureaucracy – owning a small business means every expense shows up. 

A New Way to Think About Business Expenses

It’s true that as a business owner, you do get a tax write-off for business expenses. But it is also true that an expense is still an expense; the money still leaves your accounts. It’s important that, as business owners, we rewire our brains to recognize this. Business expenses are not equal to receiving things for free. Free stuff is still the best option!

Business Expense Advice: At Peace With MoneyRecognizing this may mean we need to reexamine our approach with expenses in general. When making a purchase, it’s important to ask yourself, “Is this expense actually adding value to my business? Do I really need this?”. Often we are pressured into spending money on our businesses that we don’t really need to, especially when starting out. Evaluating our priorities and finding financial clarity in our businesses can be a helpful step in the right direction. 

As my final tip, I’d like to present a favorite Profit First strategy of mine. Ask yourself, “Can I wait just one more day to make this purchase?” This simple question can again help you in evaluating your financial priorities, and buy you more time to get your business finances in order. 

 


Angela

Images: rawpixel.com , Brooke Lark

Three Money Myths to Avoid When Starting a Small Business

Avoid These Three Money Myths: At Peace with Money

If you’ve ever expressed interest in starting your own business, you’ve probably come across a lot of money myths designed to discourage you. I’ve busted three of the most common ones below. Here are some ways to avoid the pitfalls they warn of:

“You have spend money to make money.”

One of the most common money myths would have you believe you need a lot of capital to get a business venture off the ground. The great thing about starting a small business is that it can be just that – small. You don’t need a lot of money to start testing out your business idea now, and you can always scale up later.

It also depends on what type of business you’re looking to start. Service-based business may not call for any upfront investments in materials or supplies. Craft business may be able to source up-cycled materials at lower costs. The possibilities for starting business without a lot of money are numerous. For more reading on this subject, I suggest The Toilet Paper Entrepreneur.

“You have to look successful to be successful.”

This money myth is sort of the “keeping-up-with-the-Joneses”  mindset of the business world, and many fall victim to it. Just the other day, I was listening to Hilary Hendershott’s Profit Boss podcast, and she was discussing an earlier part of her career in the mortgage business. She felt that in order to be a successful professional, she needed to project a certain image. She ended up spending all her money to keep up her appearances, and eventually had to turn it around and re-evaluate her financial priorities.

Ultimately, she learned an important lesson – success can come without material trappings. You don’t need to get caught up in spending your startup cash on the best technology or a new car, and you certainly don’t need to fret because your office doesn’t look like Google HQ yet. (Anyway, does anyone actually use those nap pods?) Evaluate what success means to you, and make sure every dollar you spend in your business serves a purpose that agrees with your goals and values.

“Your income becomes less dependable.”

This is a myth-bust within a myth bust! In a Wisebread article on this same topic, I read, “As a business owner, I seemed to have little or no control over my income. I worked hard all the time trying to bring in income and win new business. Sometimes there was a lot of income, but sometimes there was none, despite my best efforts. My income ultimately depended on fickle customer decisions and economic forces beyond my control. Income for small business owners can be quite volatile.”

Clearly, this particular business owner was using the GAAP (Generally Accepted Accounting Principles) Formula, rather than the Profit First formula. Profit First asserts that Sales – Profit = Expenses. This equation lets business owners create a system to stabilize their income and plan for incoming expenses. The author above probably would have benefited from the free download of the first 5 chapters of the Profit First book! I know I definitely could have benefited from Profit First when I was just starting out as a small business owner. 

If you’re looking for more reading on this topic, definitely download those chapters and read through my other blog posts! If you think you can benefit from some one on one help with your business finances, schedule a curiosity call with me. I wish you the best business beginnings – don’t let these money myths stand in your way!


Angela

Image sources: Thought Catalog, JoelValve

How to Boost Your Revenue Now!

Boost Your Revenue Now! At Peace With Money

Alright, I’ll just come out and say it: invoice your customers! I know it sounds obvious, but you would be surprised how many business owners put off that task of invoicing their customers. Doing just that can help you boost your revenue immediately.

You know your business needs cash flow to survive. You cannot pay yourself or your bills or buy the things you need to keep your business moving forward if you don’t have the cash flow. Invoicing your customers is your way to secure that cash.

Invoicing

If you’re running your business with recurring billing, or better yet, recurring automatic payments, then you already understand the power and importance of invoicing. With that type of system you can better plan for your revenue stream and upcoming expenses. In contrast, if you are doing any type of project-based or one-off billing, you need a system in place to get your invoices out to your customers as soon as possible. It’s likely that your customer will sit on that invoice for a couple of weeks before they bother to get it paid. All the more reason to invoice them as quickly as you can!

The Follow-Up

After you send the invoice, follow up with the customer to make sure you get paid. Again having a system in place comes in handy here. If you don’t get payment within a few days, resend the invoice, send a reminder or call them and ask for payment. Calling gets results. As a bookkeeper, I know which vendors are going to call me to ask for payments and which aren’t, so I pay those that don’t ask last.

Boost Your Revenue Now! At Peace With MoneyYou need to be the one following up to get paid. If you truly don’t like this part of your business, ask yourself why. After all, you started a business to make an income, you are offering a product you believe in, and your customer benefits from your product. You deserve to be compensated!

The main takeaway here – to boost your revenue immediately, get a system in place for invoicing and following up with your customers. If you need help putting together an invoice system, maybe it’s time to work with a profit strategist. You know where to find me!


Angela

Image Sources: 1, 2

My Profit First Story

My Profit First Story - Angela Keller, At Peace With Money

How did I get started with Profit First? Well, prior to starting my bookkeeping business, I was a mompreneuer jewelry designer for 11 years. I had a lot of good customers, and supplied a number of retail stores with jewelry including several museums across the country. I frequently had people work for me to help put together jewelry for my orders and for individual shows. By all counts, I was successful.

There was just one problem – I never seemed to make any money. Instead, I was always spending money on more supplies, or chasing the next big order or next big venue that was going to help me make some “real money.” In reality, I’m pretty sure my employees made more than I did! When my husband and I started talking about how to pay for college for our oldest daughter, I knew I was going to have to do something else in order to bring the cash we needed.

Enter Profit First

In the process of establishing my business as a bookkeeper, I came across the book Profit First. This book was a game-changer for me; it taught me how to manage my cash in order to actually get paid as a business owner. The concepts of this book strongly resonated with the struggles I faced while running my small jewelry business.

My Profit First Story and Why I Help Solopreneurs: At Peace With Money

I know many solopreneurs and small business owners could benefit from these systems, and as a bookkeeper, I am in a great position to help make that happen. I use the Profit First system in my own business and have implemented it with some of my clients. In my own life, it’s given me the peace of mind to know I’m able to pay the college bills for our second daughter, have money available for estimated tax payments, and my SEP IRA. With my clients, particularly those with varying income, I have used the Profit First system to help them overcome challenges like repaying lines of credit, accumulating a buffer in their tax account, and creating a plan to smooth out the ups and downs of the owner’s income. 

Whether you decide to implement this system on your own, or find you need the help of an accountability partner, you need to read Profit First and start using the system. The sooner you do, the sooner you can become permanently profitable! You can download the first five chapters at the bottom of my home page, and read more about the Profit First services I offer. I know the system can help you find the profit in your business.


Angela

Profit First Overview

The Profit First formula is the opposite of Generally Accepted Accounting Principles or GAAP, which determines a business’s profit is Sales – Expenses = Profit.  Simple, logical and clear. Unfortunately, it’s a lie. The formula, while logically accurate, does not account for human behavior. In the GAAP formula profit is a left over, a final consideration, something that is hopefully a nice surprise at the end of the year. Alas, the profit is rarely there and the business continues on its check to check survival.
Sales – Expenses = Profit Sales – Profit = Expenses
With Profit First you to flip the formula to Sales – Profit = Expenses. Logically the math is the same, but from the stand point of the entrepreneur’s behavior it is radically different. With Profit First, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses.

PARKINSON’S LAW

Author and historian C. Northcote Parkinson theorized that our demand for a resource increases to meet the supply of it. That is why when we are given two weeks to do a project it takes two weeks, and when we are given eight weeks to do the same project it takes eight weeks. That is why when given $1,000 to complete our work we get it done with $1,000 and when given $10,000 to complete the same work, it takes $10,000. Profit First makes Parkinson’s Law an asset. By taking profit first the money available for expenses lessens, and we are forced to find ways to get the same things done for less money.

BANK BALANCE ACCOUNTING

Most entrepreneurs don’t have the time or gumption to read the different accounting statements necessary to manage the financial aspect of their business. Theoretically you should review and correlate your Income Statement, Balance Sheet and Cash Flow Statement monthly (or more frequently), but few entrepreneurs do. Most resort to “bank balance accounting,” where we check our bank balance every day and make financial decisions based upon what we see. Per Parkinson’s Law, we consume what we see in our bank account. Profit First encourages the entrepreneur to continue “bank balance accounting” by first allocating money to profit (and other accounts) so that the entrepreneur sees the actual portion of deposits that are available for expenses and they automatically adjust their spending accordingly.

DON’T CHANGE HABITS, LEVERAGE THEM

Many entrepreneurs try to force themselves to become better at accounting and to become more disciplined in their fiscal management by pure willpower. But just like a muscle, willpower can be drained. And in a moment of financial stress or bigger than expected expenses the entrepreneur will break their own fiscal rules and spend the money they have. The Profit First principle does not try to change your habits (that is nearly impossible to do), Profit First works with your existing habits. By first allocating money to different accounts, and then removing the temptation to “borrow” from yourself, your business will become fiscally strong and you will benefit from regular profit distributions