How To Plan for Surprise Expenses

Did you have a nasty surprise yesterday with the estimated federal tax payments deadline? Or perhaps in your business you deal with other surprise expenses – things that add up. Worker’s compensation, insurance payments, replacing equipment, etc. can surprise business owners and knock you out of a financial groove very easily. Whether these things are a big issue in your business or not, I’m a huge proponent of planning to address them, just in case. How do we do that? Well, let’s talk ideas: 

Have an Emergency Fund

Having an emergency fund saved for your business can be extremely helpful. Whether a surprise expense comes up, or some other disaster strikes, having between three and twelve month’s worth of expenses set aside is great in a pinch. This strategy can be particularly helpful in emergency situations, but for taxes and other types of expenses that are somewhat predictable, try some of the other strategies below.

Set Up a Money System

If you’re a regular reader, you know how much I love money-mapping. Setting up any kind of money system can help you think more broadly about how much you need to put aside for operating expenses and taxes, well before it’s time to actually pay for those things. Checking out my articles on money-mapping is a good intro to money systems if that’s what you need to get started. If you’re a seasoned veteran with money systems, or have at least tried them before, maybe it’s time to do a business check-in and see where your business is at financially. Assess the situation and make a resiliency plan.

Check In With Your Finances Regularly

Ideally, you have a bookkeeping pro doing this, someone who can regularly look at your numbers and pull out important insights. Or, if you’re doing it on your own, you have someone that you consult with on a semi-regular basis to review your books. Even when you’re not working with a professional, regularly looking at your finances is the way to go if you want to be prepared for surprise expenses. The more aware you are of where your business is financially, the more prepared you will be to deal with an issue when one comes up. I recommend finding a way to make regular intentional time looking at your finances fun, like finding a money buddy or setting money dates.

Note Potential Future Expenses

Take time to think about what potential expenses may arise in the future. Perhaps you use a lot of special equipment in your business, and some of it is getting into disrepair. Maybe you simply have a hard time remembering when insurance or tax payments are due. Take note of all of these things and factor them into your money system or savings plan. Write important due dates on the calendar well ahead of time so you’re aware of them. Have an equipment replacement fund set aside for when your laptop or pottery wheel or farm vehicle finally busts or needs repair. The more you can anticipate these things and incorporate some wiggle room into your money system, the less you’ll be knocked sideways financially when they do come up.

I hope this list has given you some good ideas for dealing with surprise expenses. If you need more ideas about developing financial resilience in your business, check out my free e-book, Cash Flow Reboot Guide: A Guide to Thriving in Uncertain Times.

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Angela

How To Focus Your Offerings to Create More Revenue

Many businesses are multi-faceted. Diversifying is a good thing, so many business owners have a large network of different offerings. Because of this, it can sometimes be difficult to know what offerings to focus energy into. Today, I’d like to introduce a way to analyze your business and figure out where to focus.

It’s About Time

By studying your financial records with an eye to times of the year, you can learn a lot about how your business behaves over time. Whether your business is product- or service-based, it is likely subject to fluctuations. It’s likely that these fluctuations are seasonal, or else focused on specific events. For example, let’s say you own a craft business that brings in the most revenue in the spring and early winter. If you look closely at your records and what you’re doing in your business throughout the year, you might realize these spikes in revenue come from particular sources. In a craft business, it might be that there are several public craft fairs you like to attend in the spring. In early winter, perhaps people buy your products as Christmas gifts. (For some advice specifically about craft fairs, please check out this post!) By analyzing time cycles in your business, it becomes more apparent to you what times of the year and what offerings bring in more revenue. This makes it easier to direct your focus in your business.

Using This Info

Once you’re able to analyze your records from this perspective, you need to figure out how to use the information you find. Focusing on the products or services that bring you the most revenue, as well as the time of year, events, or other factors that effect this, is an important way to discern this info. How can you re-create these conditions to bring in more revenue? For example, perhaps you have one product that’s particularly popular around summertime – can you create variations of this product? How can you expand here?

In our current situation, many people have had to adapt their offerings. Perhaps you’ve had to do this in your business as well. If so, it could be great to conduct this type of review over your financial records of the last several months, since shelter in place began. Ask yourself the questions above, and think about what results you’d like to achieve. Would you like more revenue? More sales of a certain offering? Or perhaps you’re just not clear about what’s working best in your business. Analyzing time cycles can help you figure this out.

This is one of many things a good bookkeeper can help you discern from your records, and something that I regularly do with my clients. If you’d like some support in this process, please think about scheduling a curiosity call with me. I also recommend reading my free e-book, the Cash Flow Reboot Guide, for ideas and strategies to adapt your business to the ongoing pandemic conditions. 

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Angela

Image by Nicole Geri

Why Your Business’s Financials Might Not Be As Bad As You Think

Your numbers might not be as bad as you think. Many solopreneurs tend to avoid their numbers out of a feeling that if they really look at them, they’ll find financial troubles. While excusing yourself from looking at your numbers might put the problem on hold in the short term, that low-level stress and uncertainty doesn’t go away. In fact, it piles up into a sense of dread. I’m here to tell you that dread is needless. Here’s why:

No More Perpetual Vague-ness

Currently, I’m reading a book by Karen McCall called Financial Recovery. One of my favorite quotes so far is how she talks about the way people treat their finances, when she says “most people live in a state of perpetual vagueness.” Getting familiar with your numbers can actually be a comfort, because it can lift you out of this state of perpetual guesswork! Many people find that when they actually take the time to really assess where they’re at financially, it’s better than their previous emotional perception. So that’s why I say your numbers are better than you think – it’s likely true!

Take the Plunge: Look at Your Numbers

There are a number of ways to take this plunge. First, you can look through everything yourself. Especially if your books are not that complicated, or you have a rough system going already, taking a look on your own is a good idea. You can also get a good picture of whether you’re able to hire or consult with a bookkeeper. A good bookkeeper will be able to deliver a lot of important financial insights. This will certainly help you get out of that vague place. Even if your financials are indicating some unfortunate things, a good bookkeeper can soften this blow by helping you come up with strategies to surmount any difficulties.

If you were waiting for that extra push to really look at your business’s financial situation, here it is. And if you’d like to seek some assistance, with bookkeeping or profit strategy, feel free to book a curiosity call with me to see if that’s right for you!

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Angela

Image by bruce mars 

Why Hiring a Bookkeeper is Worth It

Hiring a bookkeeper can seem like an expense up front, but the payoff is worth it. I’d be remiss if I didn’t mention on my blog how hiring a bookkeeper can not only save you money in the long run, but actually allow you to increase your revenue. I encourage business owners to think of consulting with a bookkeeper as an investment in your business.

The Investment

When you hire or consult with a bookkeeper, their job is to clean up and create financial systems. They can help you set up your record keeping so that you’re tracking what’s needed for taxes. They can also help you do 1099’s correctly, particularly because they’re responsible for knowing and following 1099 regulations. Similarly, they can help point out and correct errors, discrepancies, and duplications in your records.

Right now, I’m cleaning up a lot of messy QuickBooks files. QuickBooks markets this idea that everyone can do their books on their own. This is true, with a small caveat. While it’s totally possible to do your books on your own, there is a vast amount of technical knowledge involved in bookkeeping that you may not have the time nor interest to learn. You records are going to benefit you far more if someone knowledgeable is looking after them.

The Gains

So, what do you gain when your records are well-kept? Errors are corrected, which can potentially save you money right out the gate. You incur no late fees on taxes because everything is organized and filed on time. You can use your reliable records to glean insights into when and how money is made in your business. You have less stress about finances because you know everything is being tracked correctly. And finally, you have more time to do the things in your business that you actually enjoy. Should you be spending your time doing bookkeeping when you’re actually really fabulous at making art, building cabinets, providing live entertainment, etc?

A bookkeeper is an important part of your money team. I hope this article inspires you to look into hiring or consulting with a bookkeeper to improve your record keeping. You can check out more of my thoughts on the subject at “Why DIY Businesses Still Need a Bookkeeper” and “How to Get the Most Value From Your Bookkeeper.”

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Angela

Why You Need to Schedule A Year End Bookkeeping Review

As the year wraps up, I encourage all solopreneurs to engage in a little financial self-care, by reviewing your 2019 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 2019 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 financial records hold this info. Work with someone willing to help you find it! For more about finding and working with a bookkeeper, check out “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 2020. 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! If you’d like to work with me, I’m currently offering a Quickbooks Online 2020 Reboot, a session meant to help you review and understand your books. You can set one up anytime from now through December 20th, through my scheduling form here.

Here’s to tying up your financial loose ends!

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Angela

Why You Need a Bookkeeper From the Beginning

I recently had the chance to hear from some other women about the hardest financial lessons they’ve learned through running their businesses. One of the women I spoke to listed not hiring a bookkeeper from the start as her number one mistake.  

The Mistake

When she started her business, this woman decided not to hire a bookkeeper right away. She had a vague plan to address it eventually – she knew she could either do it herself, or hire someone when her income was higher. However, when it came time for taxes, she had a big mess on her hands. She had to hire a professional to clean it up on a short timeline in order to pay taxes, and that emergency help was costly. She also missed out on having a complete understanding of her business that year, because she couldn’t look at her numbers clearly. Because of this, she missed all sorts of important analytics, like what sold best, when it sold, etc.

The Solution

After this fiasco, the best thing to do is to hire a professional to come in regularly. Even if it’s once a month or once every two weeks, knowing someone else is coming in can keep you accountable to your books. A good bookkeeper also finds and shares any financial insights they catch. This is an invaluable but often understated aspect of bookkeeping services. Understanding where your profit comes from, where your operating expenses go, and any other money-related patterns in your business can help you make better business decisions in the long run. If you’re interested in more on this topic, I recommend my articles How to Get the Most Value From Your Bookkeeper and “Know What Your Numbers Are Telling You.”

Why You Need a Bookkeeper From the StartFinally, once you hire a professional, instead of just taking your best guess yourself, you may find you’re more relaxed about the state of your business. The value of feeling at peace with money is not to be understated.

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: Steve Johnson

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

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