Befriending your Numbers to Run a Profitable Business
You didn't start your business with the goal to just break even. You want to be successful and profitable! To do that, your numbers have gotta be your friend. I know a lot of people who are scared of looking at their finances, but that will only hold you back from having the profitable business you set out to create.
Number 1 Financial Tip for Any Industry
You have to separate business and personal expenses. Sometimes even people who've been in business for 20 years run into this problem. Maybe you have two different accounts, but you might still be using your personal card or account for business transactions. KEEP THEM SEPARATE. I say this so much because I see it all too often. It'll make filing your taxes so much easier and will save you money. Don't just take my word for it though, you can hear from my friend, Tanishka, about her experience NOT separating out her finances.
My other tip is to create a system that works FOR you. Here's the thing, there are tons of templates, spreadsheets, or systems out there that you can use. But if you're not consistently using it or you don't understand your numbers still, it's not working for you. Overwhelmed and stressed about your money? It's not working for you.
A Common Mistake Business Owners Make
One big mistake is that people don't realize how much they need to set aside for taxes. A lot of creatives I work with have come from an agency, where their taxes are pulled out of their paycheck each month. So then they go out and start their own business, get paid from clients, and forget to make taxes a priority. Depending on your tax bracket and income, you may be required to pay quarterly taxes. If you're not ready, you might end up at the end of the year with a huge lump sum you owe to the IRS that you may or may not have saved up and ready to pay.
As part of my bookkeeping services, I send a monthly report with estimated tax savings so that you're never caught off guard with what you need to pay. That's the power of working with a bookkeeper. They can help you save money on taxes, subscriptions or services you're using (or not), and help you increase your PROFIT. With that...
The Importance of Bookkeeping
Of COURSE I respect that some solopreneurs might not be at a place where they can hire out their bookkeeping. Whether you're doing your own bookkeeping or you are outsourcing it, having a good bookkeeping system will save you money. Looking at detailed expenses helps you see what you can cut or where you may be paying extra, so you have more to invest or just increase your profit (remember, profit = sales - expenses, so whatever is left over after your business operating costs).
There's kind of been a culture or mindset of "women can't manage money" or "women shouldn't have that much money". Personally, I think that's wrong and thankfully this thought has been shifting. You CAN create the successful business you want. You CAN hit your sales goals. Befriending your numbers, and feeling empowered in your finances, is the key to living your life and making your dreams a reality.
If you're ready to feel empowered in your business, especially when it comes to your money, I'm here for you. If you are ready for financial help and support, you can learn about our monthly bookkeeping services. I want YOU to have the profitable business you set out to start!
