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How to Invest in Your Business At Exactly The Right Time

Once you’ve gotten the ball rolling with your business, it can be difficult to chart a clear path forward. Running a business is full of constant decision making, and often it can be tempting to just stick with what works, without trying to expand. However, with a few strategic moves, your business can meet the income goals you want it to reach. But what are they? The thought of spending the money for a certain marketing plan, or hiring a coach only to find little return on your investment, often plagues business owners. How do you know when the time is right to invest in your business?

As part of my series on financial mistakes business owners have made early on in their businesses, today I’m exploring when to take the leap and spend for business success. For other posts in this series, check out the articles on tax prep, pricing, and hiring a bookkeeper. Let’s jump in:

The Mistake

When should you invest in your business? Doing so at the wrong time and not doing so at all can be equally debilitating for your business. I’ve noticed this in the business journeys of quite a few of my clients.

The Solution

Knowing when to take the leap to invest in your business, to spend on marketing or hire an employee, can be tough.  These decisions can become clearer through working with an advisor to review the costs and benefits and also by using the Profit First system for guidelines around spending for operational expenses or for expansion. You can read more about the Profit First system by downloading the first 5 chapters of the book, or by exploring my page on the theory, and the allocations calculator. 

I hope these thoughts have been useful! If you’re interested in investing in your business but don’t know where to start, check out my Service Packages. I offer guidance on exactly these sorts of things. I’m also offering an accounting reboot session for anyone using Quickbooks Online as an end-of-year special. It can make a huge difference and help you identify trends in your business finances.

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Angela

Don’t Let Your Taxes Sneak Up On You, Do This Instead

Taxes don’t come out of nowhere, yet somehow it’s easy for us as business owners to get caught unprepared. As both a bookkeeper and financial coach, I see this often, but it has a simple fix. This month I’m reviewing mistakes women told me they learned from early on in their solopreneur careers. Let’s unpack this one:

The Mistake

One woman I spoke with told me she regretted not setting aside money for taxes. Some women also told me they were initially surprised by the additional self employment tax. Clients often come to me after they’ve been hit with the tax bill. At this point, we have to pay off the tax debt and save for this year’s taxes. Doing both is tough, and can make a real financial mess for new business owners. 

The Solution

To solve this problem, I recommend two things. First, work with a tax preparer or bookkeeper who will help estimate a percentage to be held out for taxes. You can read more of my advice about working with a bookkeeper here. Putting money aside will help avoid that nasty surprise.  This can also be a precursor to implementing the Profit First system, which is designed to keep your business prepared to pay its expenses, and pay you a fair wage. If you want to go the extra mile, you can also read my article 5 Steps to Prepare for Tax Time. 

Although recovery from this type of situation needs to be thorough, it’s a chance to implement new and better systems and get your business organized. I hope you appreciated these insights, stay tuned for next week’s article!

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Angela

Your Prices Matter, Here’s Why

When it comes time for you to price your services or products, you might find yourself at a loss. There are all kinds of pricing formulas out there. Some involve complicated math and some that just ask you to consider wholesale versus retail pricing. My personal favorite way to determine prices is to set income goals informed by the purpose and the plan you have for the money you earn from your business.

This month, I’m going over some financial mistakes women I’ve talked with recently first made in their business, and how to correct them. Let’s dive in:

The Mistake

This woman I spoke with listed not pricing her services high enough as her biggest financial mistake. She priced them too low initially. After realizing this, she found it difficult to raise her rates, because her first clients expected her low prices. She struggled between raising her prices and earning a wage that was too low for her needs. 

The Solution

If you are just starting out and are about to price your products – congratulations! You can take preventative action to make sure this doesn’t happen to you. The most important thing to do first is to establish your money why – your purpose and plan for the money you earn though your business. Where will it go? What will it do? An important part of this process is looking through your expenses and determining how much your business will support you with them. Once you’ve established your money why, you’ll be able to set income goals based off this information, so that your income is truly able to cover your living expenses. Once you know how much money you need to make, it’s easy to figure out how high your prices need to be.

Ask yourself a few more questions: What products or services are you planning to produce and sell most often? How much time, labor, and supplies will go into production? Account for those costs in your pricing formula, and make sure the answers are what you want them to be. If you’re planning to make most of your money from custom embroidered portraits, but you actually hate embroidery, maybe you’ll want to tinker with your profit model a bit. After this inquiry, you’re well on your way to pricing yourself well. For more resources, check out this article I wrote about my interview with Megan Auman.

If you’ve already priced your products and wound up in a similar situation to the woman above, you can still double back and figure out your true income targets and prices. The real challenge comes in actually implementing a rate change. Before you do this, it can be helpful to do some mindset work. Raising your rates can be a scary prospect that brings up all kinds of emotional baggage, but if you work on it, you can get to a point where you feel settled. Then, go ahead and raise your prices! You deserve to be comfortable and make a living wage. After all, isn’t that why you went into business for yourself?

I hope you found this helpful! I’m doing a series on financial lessons learned from business in honor of Financial Planning month, so stay tuned. And if you enjoy these thoughts, I wrote a lot more about planning and financial lessons in this month’s newsletter. Read it here and subscribe if you wish – you can unsubscribe any time.

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Angela

Image Source: Jason Blackeye

How to Create A Business That Restores You

A lot of people start their business with hopes for a better life in mind. More freedom, more money, a better schedule, and a legacy to pass on are just a few things that people starting out on their solopreneur journey might hope for. However, once a business gets going, whether it’s a full time project or a side-hustle, for many it becomes a demanding enterprise. My goal is to bring the solopreneur’s relationship with their business back into balance, by making sure the needs and desires they set out to meet in the first place are organizationally and financially prioritized.

So, how do we do this? The path toward creating a business that is restorative to you, the owner, combines intentional decision making and organizational action. Here are a couple key factors I’ve identified through my work with clients:

Boundaries

I recently review Jennifer Armbrust’s awesome book, Proposals for the Feminine Economy, in which she introduces twelve principles for feminist business. Principle number one is very simple: “You have a body.” While this can be interpreted in a number of ways, to me, it’s a reminder to slow down and set reasonable expectations for myself. By keeping my physical and mental limits in mind when setting up my schedule, choosing my daily tasks, and considering the scale of my own business, I’m able to avoid exhaustion and burnout. Some solopreneurs leave the corporate world or another industry in hopes of finding better work-life balance on their own. Healthy boundaries around when and how much you work can help you realize that dream and restore mental and physical wellbeing.

Clear Objectives

Consistently, I ask my clients to consider their “money why” – the clear financial objective they aim to achieve through running their business. Your money why can be a very specific goal like saving to buy a house, or it can be more general, like sustaining your budget. I have an article all about how to set income goals based off your needs. Reading it and doing a check in can help you establish your own clear objectives. By keeping your efforts focused on those, you can make sure specific needs and desires are met.

Quarterly Profit Distributions

This is one of my favorite practices from the Profit First system. To use this practice, during a fiscal quarter, you collect a portion of your profit in a specific account. At the end of the fiscal quarter, you take whatever money has collected and use it to reward yourself and celebrate your hard work. This is a great way to stay energized in your business. You can take this reward without guilt because you have the system in place to know your business is healthy, and this money is specifically set aside for you. If you’re intrigued by this concept, I encourage you to download the first 5 chapters of Profit First and play around with my allocations calculator!

I hope these ideas help you see a path towards your own restorative business. If you’re interested in learning more about what I do with my clients, you can check out my Services packages or schedule a call with me.

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Angela

Image:  Meghan Schiereck

When to Take the Leap

When to Take The Leap: At Peace With Money

You’ve relegated your passion project to side hustle status for a long time, working on it in between your day job and other parts of your life. But you know that if you want to get your business growing, you need to invest more time. That’s when you start asking yourself, “When can I get this off the ground? When can I take the leap, quit my job, and do this full time?” This is a question that must be considered carefully. While I support jumping in, I think it’s best to make the decision based on practical financial criteria. Taken at the wrong time, that leap could jeopardize your business. So, let’s take a closer look at what criteria you and your business should meet before you’re ready to take it to a full-time level.

Savings

Before you leap into the realm of self-employment, it’s good to have some savings to cover your expenses before things get going. This requires calculating your living expenses for each month, and then deciding how many months worth you want to have saved up. Many sources recommend saving up between six months and a years’ worth of expenses, but it’s ultimately up to you. Whatever number you decide, make sure it correlates with how much time you think you’ll need to get your business to a point where it supports you. If you need some resources to help you determine your monthly expenses, I recommend my article “Three Steps to Financial Clarity.”

Proof Of Concept

It’s important to prove to yourself somehow that people actually want your product or service – that there is a demand and real profitability in your idea. Setting up some metrics specific to your business idea can help you divine whether this is the case or not. Depending on your industry, this test could look very different. It might be helpful to research what success and demand look like in your industry. Ensuring that your business will have customers is an important step in the path towards solopreneurship.

When to Take The Leap: At Peace With MoneyI know they say “Leap and the net will appear,” but in order to take care of yourself financially, I think it’s best to take the leap only when you’ve already constructed at least some of that net for yourself. I understand this is difficult territory. It can be hard to know when you might make more money if you’re able to work on your hustle full time, rather than playing it safe and keeping it on the side. My advice is to think carefully and critically and make sure you have the resources to take care of yourself!

If you enjoyed this article and want to talk more about the profitability of your business, and how you can make it work for you, don’t be afraid to reach out. You can check out my Services page and schedule a call.

I first published this post back in May, but I thought August would be a good time to roll it out again, with our theme being transitions. If you have other business transition-related thoughts or questions, just let me know in the comments. I’d love to address them this month!

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Angela

Image:  Chris Ouzounis

To Find Clarity and Focus, Do a Mid-Year Review Pt. II

This is part two of a two-part series on doing a mid-year review of your business! You can find part one here

So, now that you’ve reviewed your work so far and adapted your strategies and goals appropriately, it’s time for the next few steps. These are intended to really up the feeling of getting a fresh start, while enjoying your business for what it is: a way to meet your life goals.

Refresh

For an extra dash of clarity and focus, include a refresh in your review process! Now is the time to do whatever necessary maintenance you might need to grease the wheels of your business. You might clean your workspace, clear your inbox, or centralize your passwords. Attend to your physical and digital spaces. Check in with your finances, and schedule an appointment with a bookkeeper. 

This is usually my favorite part of the review process, because I make time to do all the little things that have been nagging me, like scheduling lower priority appointments, finding that one piece of paper, and sometimes making a new goal chart for myself. Giving yourself the time and space to get organized can save you time and effort down the road. It can also add ease to your everyday business functions – which is an added bonus!

Celebrate

Go back to step one, and take stock again of all you’ve done this year, including this review process. Chances are, you will find you’ve done quite a bit of work towards your goals, no matter how close you might be to completing them! Take some time to celebrate all the work you’ve done. Treat yourself to an afternoon off, a fun or inspiring event, or whatever you’d like to do to celebrate your achievements so far! Being a self-starting solopreneur is hard work. If you’ve done the work, you deserve to cheer yourself on once in a while.

If you busted through this whole review process, congratulations. I’d love to hear from you about how your business functions going forward, or if there are any little things you’ve added to the process. Just leave a comment below or shoot me an email at angela {at} atpeacewithmoney.com. If you think you could benefit from working through this process with an accountability partner, you know where to find me – just check in on my Services page.

Angela

Image Source: Emma Matthews

To Find Clarity and Focus, Do a Mid-Year Review

Goal motivational quote

We’re six months down the line. How are you doing with your goals? Have you totally crushed them, worked on them bit by bit, or are you not sure? In the thick of things, sometimes our focus on our goals can get a little murky. Here’s the first two steps of a two part series on doing a mid-year review. Let’s jump in:

Review

Step one in a mid-year review is the review, of course! When you take a look at the goals you’re working towards, it’s easy to get bogged down by focusing on what you still need to do. Instead, train your focus on what you’ve already done.

Start by making a list of milestones you’ve hit or steps you’ve completed. Rifle through your day planner or old to-do lists if you need a refresher. Go back through the year, month by month.

Now, it’s time for a little introspection. Take stock of all the actions you’ve taken towards your goals, and then ask yourself a few questions: How do I feel about this goal? Do I still want to achieve it by the end of the year? Is that feasible? At what pace have I been able to work toward this? What’s my capacity been like?

Don’t be afraid to drop things or add new things. Some goals may simply no longer excite you, or you may have realized that another achievement is more important or time sensitive.

During this review process, it’s also helpful to take a look at the systems and work routines you have in place for your business. For example, you may have set an intention to review your numbers once a week, or you may be trying out the Profit First system. Evaluate the effectiveness of your systems and routines. Are they working for you? Do you have time to do these things? Are you consistent? You may find that your routines need to be simplified or tweaked to be more pleasant. Or, you might find that your systems and routines are working just fine! Both are vital evidence when checking in on your business.

Learn and Adapt

Next, it’s time to use all of that evidence you’ve gathered to adapt your goals and practices. First, notice if you have any goals that you are either discarding or adding. Next, examine the pace at which you’ve worked on your goals. These pieces are important when it comes to planning out the rest of your year.

I recommend drawing or writing out a map for the next six months. Include any events relevant to your business, like conferences, trade shows, or gallery openings. Then, begin to write in milestones you hope to meet in the next six months. Make sure these are realistic! Don’t pressure yourself to level up in three months if it took you six to get where you are now. Instead, allow yourself the space and time to achieve things incrementally.

When you’re making your plan, be sure to adapt your goals to what’s worked so far this year. If you really love a certain routine or feel fired up to keep working toward a certain goal, go for it. If you’ve stalled on a project because you need to do more research, carve out some time to go back to the drawing board. When charting your course, keep your own needs and preferences in mind.

The next two steps will coming out in part two of the series, but I think this gives you enough to chew on for now! If you haven’t yet set goals for your business, or would like some more help thinking them through, check out my article Set Informed Income Goals. And of course, I am happy to walk through the goal setting process with you. All three of my service packages are focused on helping you set, work towards, and achieve goals. If you find you might appreciate some accountability or guidance, head on over to my Services page and schedule a curiosity call

Angela

Image Source:  S O C I A L . C U T

Why DIY Business Owners Can Still Use a Bookkeeping Partner

Why DIY Businesses Can Still Use a Bookkeeper: At Peace With Money

Recently, several people have reached out to me who prefer to do their bookkeeping on their own, but want to have a second set of eyes on their numbers. I can’t tell you how pleased I’ve been to receive these requests. I think consulting someone else about your books is a great idea, even if you typically keep your records yourself. There are two main reasons why I think occasionally working with a professional bookkeeper, even if you’re a whiz on your own, can greatly benefit your business.

Accountability

Having someone who regularly looks at your books, even if it’s only once every month or so, motivates you to stay on top of them. Regularly scheduled reviews can help you maintain consistency and accuracy in your record keeping, which can streamline your business even further. It’s easy to fall behind on your books if no one’s watching. Having someone else look at them every now and then encourages you to keep up.

Accuracy Check

Your financial records are something you don’t want to mess up. Mistakes can be terribly inconvenient at best, and very costly at worst. Plus, if you are working to learn the skill of bookkeeping, it’s great to have an expert on hand to review your work. That extra pair of eyes can help keep your records orderly.

My Story

When I was running Dolce Beada, I knew how to do my bookkeeping, but I still had someone come in once a month to make sure I stayed on top of all the entries. Having someone look at my records regularly kept me in the habit of recording my numbers and keeping my books from getting messy. I also really benefited from a monthly numbers-check, just to make sure I was doing it right. 

Some business owners may feel that they are not ready to hire a bookkeeper, so they prefer to keep their own records. If this is you, you can still benefit from having a bookkeeper review what you’ve done. Or perhaps you need some training on how to set up and maintain your bookkeeping – an expert can offer this too.  Many solopreneurs also benefit from Profit First Financial Coaching in order to set a revenue goal for their business, fully understand how much they are spending both personally and in their business, and prepare to pay themselves and all taxes as they come due. All of these business concerns require some financial work, and an expert who can coach you through that work can be an invaluable resource. 

If you’re interested and want to learn more about the Profit First and financial services I offer, check out my services page, and book a call with me!

Angela

Image Source: Ashkan Forouzani

Know What Your Numbers Are Telling You

Know What Your Numbers Are Telling You: At Peace With Money

This article is the third in a month-long series on taking care of your finances as self-care. Specifically, I’m focusing on what you can do with your money to take care of yourself and improve your business in 2019. You can read the whole series by clicking here. 


 In the last installment of this series, I talked about how important it is to separate your business and personal finances. Doing so gives you access to a lot of important information about your finances. However, it’s also important to know what to do with that information once you have it. This requires some analysis. Let’s dive in:

Know What Your Numbers Are Telling You

Look back through your financial records for the year. Figure out what products, services, or other sources brought in the most revenue. Identify which months you made your largest and smallest amounts of revenue, so you can understand the rhythm of your income.

Do the same for your expenses. Did you have surprise expenses come up that caused you problems? How can you plan for these surprises in case they happen again? For many people, taxes are a surprise expense. You can plan more effectively once you look at last year’s tax expenses, and prepare for upcoming years. 

Solopreneur Paycheck

Look at your total revenue. Did you pay yourself? Did your business pay you money? If so, move money from your business to your personal account. In the Profit First system, Owner’s Pay and Profit accounts are used to divvy up income and ensure that the owner is getting paid. This is called paying yourself first, an important practice for any business owner. Actually separating your income from the other categories, like savings for operating expenses and taxes, is key to a thriving business. 

Bringing It All Together

By analyzing your finances and gleaning all this information, you are ultimately able to tie loose ends and What Your Numbers Say About Your Business: At Peace With Moneycreate a financially streamlined business. Strategizing to prepare for surprise expenses and taxes, offer more of your most profitable products or services at the optimal time of year, and remembering to pay yourself all contribute to financial success. If you’re interested in doing this analysis work with some professional help, I’m happy to speak with you. Take a look at my service packages and schedule a curiosity call. If this has piqued your interest about Profit First, download the first 5 chapters for free here on my website! I do hope this post helps you find some financial insights into your own business!

Angela

Image Source:  Martin Sanchez