5 Steps to Get Ready for Tax Time

5 Steps to Get Ready For Tax Time: At Peace With Money

Yep, it’s that time of year again! As a small business owner, or let’s face it, just as an individual, tax time can be stressful.  But there are ways to reduce that stress and be ready for tax time before you know it.  As a former tax preparer and practicing bookkeeper, here are my top suggestions;

#1 – Designate a folder or box for all the mail that arrives regarding taxes.  You don’t even have to open the envelopes just collect it all in your “spot”.  Super simple!

#2 – If you are doing your banking online, you are probably getting email notifications that your tax statements are available.  I like to flag these emails as they come in and then sit down when I have some time later in the week to go back through the emails, log in and download each statement from the bank.  Save all of these to a file folder you’ll call 2017 Tax Documents.

#3 – If you are running a small business (and a side hustle does count), please, please, please tell me you have been running that business out of a bank account separate from your personal spending.  If not, go open that separate account right now!  If so, you can easily determine your income and expenses for the year by reviewing your bank statements.  Better yet, if you are running your business on an accounting platform such as Quickbooks Online and you have updated and reconciled your accounts, those reports are right at your fingertips.  I do suggest that you start this step in January just to give yourself plenty of time.

#4 – You should have received all of your tax mailings by mid-February. If your tax preparer is going to want everything in electronic form (or you just want to stay super organized) scan all of your paper statements and add them to your 2017 Tax Documents folder.

5 Steps to Get Ready For Tax Time#5 – Grab a copy of last year’s tax return and review the entries you had last year.  Or if you have a digital file from last year, compare the statements with the information you have for this year.  This can jog your memory so you know you haven’t missed anything.  The last thing you want is to have to file a corrected tax return because you left something out, so just take the time and make sure you’ve got all of your information.

You did it!  You are ready for tax time!  And if #3 is causing you to pull out your hair, maybe it’s time to talk to a professional to help you set up a system or to decide if you are ready for ongoing proactive bookkeeping.

Angela

Image Sources:   Anton Darius | @theSollers

How to Set Informed Income Goals

How to Set Informed Income Goals: At Peace With Money

This article is the fourth 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. 


One of my favorite sayings comes from the artist-turned-business mind Jennifer Armbrust: “A business is a needs-fulfillment machine.” Your business exists to support you; to fulfill your needs. However, if you don’t have a clear picture of what those needs are, it can be difficult for your business to fill them. This week, I’m suggesting that to really financially care for ourselves, we investigate the true costs of our lifestyles. By doing so, we will be able to make informed decisions about what income goals we’d like our businesses to meet. 

The Process

Time to take a realistic look at how much money you’re spending every month. Dig up the past three months of your bank and/or credit card statements. (For most of us, these should be available online). Go through line by line to see where your money is really going. Total up all the expense categories, i.e. groceries, utilities, rent, etc. 

Once you’ve got your totals, you have a realistic picture of how much money you need on a monthly basis. At this stage, you may find it helpful to look critically at your lifestyle, and see if there’s anything you’re interested in culling. If you’re looking for some ideas around creating a budget or spending plan, I’d recommend these articles of mine. Click here. 

Set Informed Goals

Whether you decide to create a spending plan and reign in your expenses, or feel satisfied with your lifestyle costs, you now have a complete picture of your financial needs. At this point, you can now set informed income goals that are designed to meet those needs in your personal life. Without this crucial information, your goals will just be shots in the dark, aimed at an amount of money that “sounds nice” but doesn’t tangibly satisfy a need.

Additionally, once your have this information, you can also take a look at how your business is doing in its current state. Is it making enough to support you? Whether you’ve got a side hustle or something you want to stretch into a full source of income, checking in with this question is important. If your answer is no, you can start to strategize around how you might close that gap. For more ideas on this, check out this post.

I hope this post inspires you to keep working to create a business that truly meets your needs. If you’d like to work with an accountability partner or need coaching around this, please check out my service packages and don’t be afraid to schedule a curiosity call!

Angela

Image Sources:  rawpixelMelissa Askew

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

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

Schedule Your Year End Bookkeeping Review

As the year wraps up, I want to encourage all solopreneurs to engage in a little financial self-care, by reviewing your 2018 books! There are several reasons to review your books at this time of year, and they would benefit from the eye of an expert. If you don’t already have a bookkeeper and feel like you could benefit from some oversight, schedule a review with someone! The financial insight will go a long way for your business. Here are my top two reasons for reviewing your books now.

Tax Prep

First of all, straightening out your 2018 books to prep for tax season simply makes sense. Hiring an expert to help you do this can ensure that your books are accurate. That extra bit of readiness will feel so good come tax season, I promise! It will save you some stress and last minute rushing come tax time. Think of it as a holiday gift to yourself!

Where Did You Make Your Money?

My second reason for scheduling a bookkeeping review with a professional is so that someone with a trained eye can go over your books and help you discern where, when, and from what you made the most money. This kind of insight is invaluable to any small business, especially if your goal is growth. Your Why You Should Schedule Your Bookkeeping Review Now: At Peace With Moneyfinancial records hold this info. Work with someone willing to help you find it! For more about finding and working with a bookkeeper, check out my post “How to Get the Most Value From Your Bookkeeper”. The insights you gain from a good bookkeeping review could help shape your plan for your business in 2019 – all the more reason to review them now.

Going over your books with a professional will save you a lot of stress and provide you with knowledge needed to run a successful business. Please consider scheduling a year-end review – you’ll thank yourself later! I offer bookkeeping services along with Profit First strategic advising. If you’re looking for someone to work with, don’t hesitate to schedule a curiosity call with me.

Here’s to tying up your financial loose ends!

Angela

Image Sources: rawpixel,  Ella Jardim

 

Are You Really Getting the Most From Craft Shows?

Are Craft Fairs Worth It?: At Peace With Money

Craft fair season is on the horizon, and its important to make sure you’re aware of the financial implications of every show you attend. Certainly you want to calculate the cost of the craft show itself and how much you are selling, but that’s really just the beginning. Craft shows are a way to be face to face with your customers, which opens up a world of potential marketing, networking, and connection opportunities. Every element of your craft fair presence should be planned with the intention of getting the most business, exposure, and presence you possibly can. After all, you paid to be there – you might as well milk it! 

Imagine the Possibilities

Begin to think about how you can use the even to your fullest advantage. Consider how you’re using the show from an advertising perspective. Are you advertising it ahead of time so that your fans come to see you? Once you’re at the craft show, are you using it as the advertising opportunity that it is? Are you collecting names for your mailing list ? Are you advertising your other upcoming events so customers and potential customers know where they can see you next? Are you letting them know how to buy from you online or at local shops? All of these pieces of information are important to convey to anyone who visits your booth. Think about the most clear, effective, and inviting ways you can disseminate this information. Maybe your need to tweak your display or create a small colorful flyer. Find a creative solution and make it happen.

Craft shows are also a time to be present with your customers, a rare experience these days. People often shop at craft fairs specifically to support local economies and meet makers face to face, so make sure you are giving people the experience they’re looking for. Be friendly, personable, and connect people. Use this in-person opportunity to its fullest extent. Perhaps you want to demonstrate how your handmade items are made – people love watching live demonstrations and learning more about a maker’s process. Tell the story behind your craft.

Get the Most From Craft Shows: At Peace With MoneyEspecially if you are seeing return customers, ask for feedback on your work. Ask customers if there’s anything they wish you made. If you really want to have fun, maybe set up a poll or other interactive station where people can offer feedback or vote for their favorite product. Simply connecting with other people who live near you by talking about community happenings can make the difference! Craft shows are a great opportunity to really touch base with your customers and get to know them better in order to understand how you can deliver your product to them. The craft show is about connecting as well as making a profit, and those connections eventually pay off. Being friendly throughout the day will also likely improve your experience of the event, and your day to day life in your community. 

I hope these tips will help you come up with more ways to get the most out of the craft fairs you attend this year. If you are interested in chatting about more creative ideas for promoting your business at craft fairs, don’t be afraid to shoot me a message! And of course, you can schedule a time to talk with me or check out the packages I offer if you feel you need more guidance. 

Angela

Image Sources: ,  Miroslava

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

The Stages of Financially Growing a Business

Stages of Business Financial Growth: At Peace With Money

Starting a business is a financially intricate process. I’ve written at some length about avoiding financial pitfalls and myths, and important first steps, but something I don’t see many people talk about are the stages of growth a business goes through as it financially matures. Today I’m mapping these out for you, so you know what to expect on your solopreneur journey.

First, some general advice. When first starting a business, you have two priorities: a) get the word out about your business, and b) keep your expenses low. Doing these two things from the get-go will set you up for business success. If you need some more guidance around wrangling your business expenses, check out this article of mine. 

Fledgling

As you build your business, focus on streamlining your processes. Figure out how you can refine them to be time efficient. Keep track of time spent and ensure you are making a living wage and being cost-effective with your expenses. If you’re purchasing a lot of materials to create a product, look into bulk purchasing your supplies.

In this stage, it’s also important to cultivate the relationship with your current customers. Allotting time or room in the budget around strengthening customer relations and making sure your first customers have exemplary experiences with your business is very important. A good reputation sets you up for success, and good word-of-mouth exposure can eliminate advertising costs later on.

Growth

As your business begins to grow, again refine your processes to cut costs and increase efficiency. As you receive more orders or draw in more clients to serve, your processes may have to adjust to accommodate these larger numbers. You will likely find yourself spending more time doing production or client work. Consider the possibility of delegating or outsourcing some of your tasks, or find other solutions. Work on further defining your role in your business – what are the pieces that you want to keep doing yourself? What can you hand off? Continue to keep an eye on your bottom line.

Maintaining and Sustaining

Once your business establishes some staying power and becomes financially stable, it’s time to move to the next stage. Make sure your business is sustainable for you by keeping it fun and engaging. Continue to challenge yourself. Incorporate new ideas and investigate what role your business can play in the lives of your customers, clients, and community.

Stages of Growing a Business: At Peace With MoneySearch for feedback. Listen to your customers to continue innovating and refining your product or service. If you have a team of other people, focus on them to keep things fresh and engaging. Brainstorm together and streamline your business partnerships.

And of course, again make sure you are earning a living wage. Continue to examine your finances and find ways to improve the financial sustainability of your business. Part of the reason you created it was to meet your needs, after all!

Lastly, at all stages utilize Profit First. This is an essential part of every step, especially the fledgling stage. Setting up money systems that allow you to have a steady paycheck and stay focused on your own financial needs will help you create a business that won’t feel draining to operate.

I hope this little walk-through helped inspire you to work on your business idea! If you need more guidance, take a look at my offerings.

Angela

Image Sources: oldskool photography,  rawpixel

Money Doesn’t Need to Be Scary

Welcome to your money pep talk. If you were looking for a sign to encourage you to level up your personal or business finances, this is it. For many people, money is a stressful subject. Talking about it can bring up a lot of fear and other emotions. But much of that fear stems from the fact that so many people simply leave their finances shrouded in mystery. Many of us don’t receive good education on finances when we are younger, and when we become adults, we either don’t seek or don’t find the information we need to have healthy finances. One of the main ways to fix this problem is very simple: self-education! Once you start learning about money and start paying attention to your own financial matter, the hardest part is over. You might find a lot of your fear has dissipated!

Thanks to a plethora of resources, self-education doesn’t have to be effort-intensive either. Perhaps you might simply choose a financial podcast and listen to it on your commute (my personal favorite method). Or pick out a book and finish it over the course of a month. All you need to do is pick a resource and carve out a specific chunk of time to absorb the information. Below, I have recommended a couple of my favorite resources for learning about personal and business finance. You can also follow me on Twitter and Facebook, where I regularly post blog posts and podcast episodes that I find especially helpful and inspiring. And since it is my profession, know that you can always schedule a discovery call if you’re curious about my services or need some guidance in your financial education journey!

Business Finance Resources

Don’t Keep Your Day Job is a great podcast hosted by Cathy Heller all about the business side of carving out a creative career.

Profit First, of course! Download the first 5 chapters of the Profit First book here on my site.

Mike Michalowicz also hosts the Profit First Podcast, which is full of insight for business owners looking to get more financially savvy.

Profit Boss Radio by Hilary Hendershott is a great resource on both business and personal finance topics. She focuses on financially empowering women.

Personal Finance Resources

Afford Anything is Paula Pant’s podcast, chock-full of useful personal finance info and advice.

Be Wealthy and Smart by Linda P Jones is a great pick for people who are interested in slightly shorter podcast episodes. She tackles and breaks down simple yet important topics like investing.

At Peace With Money: Money Doesn't Have to be ScaryHer Money Matters is hosted by Jen Hemphill, and also focuses on financially empowering women.

The Automatic Millionaire is one of my favorite books on personal finance. The core philosophy has been central to my retirement planning. If you’re thinking about retirement, it’s a must-read. I sing praises for this book in an article I wrote a while back on automating your finances. Check it out!

I hope you find these helpful and educational. May these resources help you conquer your money fear!

Angela

Image Sources:  Clark Tibbs, Linh Pham