Profitability, Organization & Productivity

Small Business 101: Accounting for the Non-Accountant

Accounting for Small Businesses is oftentimes the biggest stressor for small business owners, especially creatives. Crunching the numbers can feel overwhelming. But without the proper preparation and tracking, not having the right cash flow clarity can be the difference between you being a thriving business and closing your doors. 

Accounting for Small Businesses is oftentimes the biggest stressor for small business owners, especially creatives. Crunching the numbers can feel overwhelming. But without the proper preparation and tracking, not having the right cash flow clarity can be the difference between you being a thriving business and closing your doors.  |  Think Creative Collective

Did you know that recent studies have shown that 50 percent of small businesses will fail within the first year? How about the fact that a staggering 95 percent will close their doors before they hit their fifth year of operation? That one seems a bit hard to believe, but in today’s economy it could be true. Here are some additional stats that may surprise you (source):

  • 40% of small businesses are profitable
  • 30% break even
  • 30% are continually losing money

These statistics are the reasons why you need to be taking “the numbers” seriously from day one, whether you have a team running a startup or you are just ramping up your side hustle to eventually allow you to leave a full-time job.

The Right Mindset

Having the right mindset, paired with the right set of tools is absolutely key to getting started. Here is a small checklist of things we want you to start implementing and thinking about.

  • Know Which Category You Fall Into
    Before you can nail down a proper way to track any income or expenses, you really must have a clear understanding of which type of company you are running (Sole Proprietor, LLC, Corporation, etc.). Each type has clear implications on taxes, pay structure, acceptable ways to reimburse yourself, etc. We strongly suggest that you do some homework on your options before picking the direction that is best for you and your business.

  • Separate Bank Account
    Regardless of the type of small business you are running, you NEED a separate bank account. Even though Sole Proprietors can (and often do) just operate out of their own checking accounts, it can be a hairy mess if you lose track of time and aren’t recording things properly. There are many great FREE banking options out there. Check in with your local credit union or bank for options. Do not settle for paid checking — if you think this is your only option, you are throwing away money.

  • Be Prepared to Record all Income and Expenses
    It can seem pretty daunting to record every receipt, every mile and every dollar earned, but it is essential. We have some old school methods and some techie options (for the non-techie) to help streamline this process.

  • Process for Tracking and Collecting Payment
    I can’t reiterate enough how important it is to have not only a sales process, but a collection process too. It doesn’t need to be elaborate, but putting things like contracts, invoicing, late fees, etc. in place can make such a major difference. In the beginning, I trusted too many people. Not that people don’t have the best intentions in the beginning, but you just never know what life will throw at you. Have written and signed agreements. Have due dates for payment. Have penalties for not following your guidelines. Please keep in mind these are somewhat structured by state, so don’t forget to check out local laws. Things like sales tax, quarterly filings and late fee percentages are often highly regulated.

  • Managing Your Cash
    If you have ever worked in corporate America, you are used the standard paycheck. The pay slip that already has all your taxes, social security and often even fees for health insurance and retirement deducted. When setting prices and managing cash, it is easy to forget about all this extra overhead. A good rule of thumb to keep in mind if running strictly on your own is 50% of every dollar owned you can keep, 30% must be saved for taxes (more or less depending on your state and local laws), and 20% is essential for padding in your account to pay for things such as marketing, office supplies, meetings, entertainment (for business purposes), education (reinvesting in yourself), etc. I often see people charging what they were used to taking home. To actually continue making the same paycheck, you often need to double or even triple your old hourly rate to come out in the same place.

  • Developing a Rhythm
    Over time you will begin to see where things are falling short. Perhaps you are spending twice as much time on one project as you anticipated. Sure you may not be “losing” money, but if you are working 80 hours a week, you’re not profitable. I get it! I did this in the beginning. I wore myself ragged until 2, 3, 4 or even sometimes 5 a.m. But working more does not always equal more pay or more profitability. Take a step back and start streamlining systems, perhaps charging more or setting more realistic expectations with your clients/customers. You may eventually start to see a pattern and be able to predict your paycheck. Keep in mind that many industries have slow and busy seasons, so you must be prepared to earn varying amounts, depending on the season. This fluctuation doesn’t mean you're failing, it just means you need to plan for it.
If you have to work 80 hours a week, you’re not profitable.
  • Seek Out an Advisor
    There will come a point in time where you need to seek outside help. This may mean contacting a lawyer to review your contracts. Or maybe you need help with tax preparation or even day to day bookkeeping. It is ok to invest in good help. If you are looking for a talented CPA specializing in helping Creative Entrepreneurs, we highly recommend Amy Northard! She even has some great content on her blog, which you should check out. Or, if you find if your business is a bit more complicated in the online business world (like our own), you might check out the newest addition to our team, Parker & Corey from Evolved Finance — and be sure to tell them we sent you. They specialize in bookkeeping and small business consulting for multi 6-figure and 7-figure online businesses.

Tracking Methods

There are many great methods out there to begin tracking all the details for your business. Finding a system that works for you, and that you will use, appreciate and rely on, is important.

OLD SCHOOL - EXCEL

Spoiler alert: we built a company from zero to nearly $200k before we stopped using Excel. Why use complicated fancy accounting software when you can easily do it the old school way for $0? For years we used Excel to track every receipt, every mile driven, all contractors we used, other expenses, etc. We had separate sheets that gave us an overview of how we were doing — one that helped us forecast future income (especially when we were still running a client based business), one for contracted/paid income, and one that tracked when we paid ourselves and how much. Every business is a little bit different, and Excel can easily be customized. If this sounds completely overwhelming to you, then we have some other options for you to consider.

WAVE

Here’s a good middle ground that offers a bit less DIY, but has some great beginner tools integrated. More good news — it’s free! Wave Accounting is the perfect solution for small businesses (they are literally geared towards businesses with fewer than 9 employees). They integrate smoothly with most banks, which means no manual entry of sales or purchases (this is when it’s important to have your separate bank account!).

Wave Accounting covers everything from Invoicing, Accounting, Payroll, Payments and even Personal Finance. Their interface is really easy to learn, but if you get stuck they have a tremendous FAQ and Blog section to help you out.

QUICKBOOKS

If you are looking for a more robust option, then QuickBooks is definitely a name you can trust. There is a bit of an investment, but you’ll be sure to find every feature you could possibly need for now and as your company grows. Although they are known for their desktop based software, you never have to worry about your data. It backs up automatically with bank level security, so it is always safe, and always available — from any device. You can even try it free for 30 days (no credit card required). Self-Employed? You can start for as little as $5 a month.

Now, I would be lying to you if I said there weren’t other options on the market. But I, as someone who has shopped bookkeepers and CPAs from around the country, know Quickbooks is the industry standard. So if you end up knee deep and wanting to eventually hand off your books to let someone else manage the day to day or just file in time for tax season, I would go with a name that is recommended by the vast majority of trained professionals out there. Just sayin’. (P.S. This is the solution we transitioned to post-Excel days — bonus, we don’t even manage it, our bookkeeper does IT ALL for us!)

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Innovative Apps

Hate holding onto every receipt and tracking every mile you drive for business? We have a couple innovate solutions for you.

WAVE RECEIPTS

A tier off of the innovative Wave Accounting is their Wave App for Receipts. Are you the person who’s always digging around your bag looking for the last Michael’s Craft Store receipt? Then this app will change your life! Simply open it up and snap a pic through the app of your receipt, and it’ll email it directly to you. You then have the option of forwarding it on to receipts@waveapps.com and it’ll flow directly into your Wave account.

MILE IQ

According to most accountants we talk to, mileage deduction is one of the highest deductions small business owners miss out on every year. This is because tracking mileage can be a major headache, filled with scattered notes or forgotten resets of the odometer.

Luckily, the Mile IQ App exists for Apple and Google phone users and it’s free! You simply download the app and it knows when you’re traveling. It’ll send you an alert once the trip is over asking you to swipe to the left for “personal” trip or swipe to the right for “business” trip. You can then view your entire (IRS Compliant tracked) mileage on your desktop from the Cloud and even give access to your accountant. GENIUS!


We realize that accounting is just one piece of the gigantic puzzle that makes a small business successful. Sometimes, before we can even begin to learn or implement things like bank accounts, budgeting and tracking, we’ve got to take it a few steps back and lay the foundation. We’ve created the best FREE tool for you to do this! We’d love to have you in our free course, Your Biz On Autopilot.

Stop wasting time and turn your dream into a reality. Let’s turn your side hustle into a soul fulfilling, goal-crushing, freaking profitable creative business. We get it. You work all day and then you come home and you hustle even harder. Balancing essentially two full time jobs is not for everyone. Let’s make a plan, simplify, and start earning what you are worth. Start your free course today.

 


We love celebrating creative entrepreneurs and their biz journey!




Blog, SEO

So You Think You Can Edit: Why Your Biz Might be Ready for an Editor

Hiring new consultants, contractors, and team members is a big step in your business, but once you’re ready to take it your workload decreases and your business is able to improve in multiple ways. This will leave you to work on your strengths and be the bad-ass lady boss you are (instead of the boss, chief bottle-washer and Jill-of-all-trades).

A blog editor may not have made the top of the list when you dreamed about bringing someone on to help you. But…

You only have twenty-six small letters and a handful of dots and dashes to wow, inspire, share, create, and convince. Surely you want to combine these in the best way possible?

Hiring new consultants, contractors, and team members is a big step in your business, but once you’re ready to take it your workload decreases and your business is able to improve in multiple ways, leaving you to work on your strengths and be the bad-ass lady boss you are (instead of the boss, chief bottle-washer and Jill-of-all-trades).  A blog editor may not have made the top of the list when you dreamed about bringing someone on to help you. But…  You only have twenty-six small letters and a handful of dots and dashes to wow, inspire, share, create, and convince. Surely you want to combine these in the best way possible?  |  Think Creative Collective

Using a blog editor can really help to perfect your brand, reach your audience in an authentic way, improve your social messaging, and shoot SEO through the roof so that you reach exponentially more people.

Five of the signs that your biz may be ready, waiting, and wanting a blog editor to improve your content and SEO results and to save you a ton of time include:

1. You want to improve your SEO results (without having to fuss with SEO).

SEO is a long, slow process of making small and incremental changes and tweaks to each post and being consistent over time. It requires a set of tasks for each post and many of our clients find it easier to let us take these jobs off their full business and blogging plates.

Having said that, it’s a long process. We’ve had clients who have seen rapid upswings in their SEO results in their first month with us, but don’t expect to see huge change happening before three to six months. After that, it’s up all the way, baby!

The best part of improving your SEO? It starts slowly, but improves with cumulative effort. So as your Google reach improves and you attract more readers and shoppers to your site, these improved numbers improve your SEO further, and your Google reach builds on itself. One of the things we do for many of our clients is to go back into virtual archives and ensure that old posts are optimized, so that your SEO efforts don’t only depend on your brand new posts, but on your whole blog.

2. Your writing could be better.

We’re not all professional writers. But we all have something important to say. Don’t let a lack of skills in this area hold you back. If your writing isn’t as good as it should be and you’d like it to better touch your audience by delivering perfect sentences right to their screens, you may need the help of an editor.

That said, many of our clients are fantastic writers themselves who realize the potential impact of having a professional eye run over their work. Some of our clients have dyslexia or other barriers to learning. Some are really busy and want to type and dash, leaving the rest to us. It’s a universal truth that it’s almost impossible to edit your own writing objectively (unless you stick it in a drawer and take it out a few months or years later – ever find those cringe-worthy high school essays, anyone?).

Regardless of your writing level, having your posts, webpages and content edited professionally can only improve your brand and its perception. After all, you may be a colorful, interesting, talented, creative, and skillful person (yep, we know you are), but unless you use video content, the way in which your site reaches out to potential buyers or blog readers is through words. Those words need to be kick-ass so that they attract attention before viewers click away and onto another site.

Think about the last time you came across really badly-written website copy, marketing emails, or social media captions. Did it make you want to buy? Nah, me neither.

3. You have a large archive of outdated posts that are no longer attracting much traffic.

As mentioned above, we go back and edit archives to make sure that all your posts are best optimized. We also make them evergreen, if and when possible, so that you can re-post, re-use and recycle as either refreshed blog posts (yay for an easier content writing calendar!) or other types of content, such as social media posts, courses, and e-books.

4. You need help with social media content creation and posting.

In addition to editing blog posts, we also help by creating or editing (and then scheduling) social media posts so that you don’t have to be the crazy woman who is trying to cover Facebook, Twitter, Pinterest, Instagram and ALL the social media networks. Turn off that phone. Take a breath. We’ve got it.

5. You make mistakes in your writing, and your readers may have commented on them.

You may be surprised as to how many gremlin errors are lurking in your sales and About pages, not to mention in your most-read blog posts. Or maybe you’re not surprised. One of my clients receives nasty comments anytime there’s an (often perceived) error in one of her posts. Although we certainly don’t change our actions on the say-so of internet trolls, comments can indicate that you may have been publishing posts that contain more errors than usual. Regular errors in your writing, and the rampant disregard of spelling, grammar, and punctuation conventions, can discredit your message, detract from your voice, and diminish your shiny expertise sparkle. They also give an impression that’s not professional.

If you’d like to try out a month of no-commitment, no-strings attached editing for your business, just keep on reading and give us a shout! We’d love to give you a taster of what we do.


Think Creative Collective was one of her first clients, and Abagail and Emylee say: 

“Sarah has been such an incredible addition to our team. We previously handled ALL writing/editing, etc. and it got to the point where we were letting things that were less than stellar head out the door. Sarah swooped in and saved the day. She got us to stop flying so much by the seat of our pants and schedule writing in advance. This not only has allowed us to be better writers from the get go, but adds time to get valuable feedback from Sarah. She is now a crucial part of our everyday process. Highly recommend!”

Would you like 30 days of free editing and SEO for your blog? No card details, and no strings attached. We’d love to connect with you! Please write to us here or email Sarah at sarah@sarahevelynedits.com


See all the behind the scenes fun on Instagram

Video Tutorial, Social Media

Prepping your Facebook Personal Profile To Pimp Out Your Business

YOU SHOULD BE IN FACEBOOK GROUPS IF YOU WANT TO GROW YOUR BUSINESS.

Yes, I totally just yelled that at you BUT only because I’m trying to make a point.

We have ALL heard this; if we want to grow our business, we need to be in Facebook groups, and it’s true, but you might be missing a key part to this process.

Here’s the thing y’all, being in Facebook groups means a lot more (or less?) than just running in and dropping your links then running away. It means being involved, being the expert and just being awesome - but that’s a discussion for another day.

YOU SHOULD BE IN FACEBOOK GROUPS IF YOU WANT TO GROW YOUR BUSINESS.  Yes, I totally just yelled that at you BUT only because I’m trying to make a point.  We have ALL heard this; if we want to grow our business, we need to be in Facebook groups and it’s true but you might be missing a key part to this process.  Here’s the thing y’all, being in Facebook groups means a lot more (or less?) than just running in and dropping your links then running away; it means being involved, being the expert and just being awesome - but that’s a discussion for another day.  |  Think Creative Collective

Since part of your Facebook group strategy SHOULD be to be super active in a handful of groups by answering questions, posting updates, etc., you should definitely have your Facebook personal profile ready to sell for you.

It’s completely against Facebook terms and conditions to have two (or more) different Facebook personal profiles - so you will need to use your actual personal profile for business networking.

All of that being said, you need to do these two things:

  • Make sure your tagline & Business Facebook Page (“where you work”) are visible when someone just hovers over your name.
  • Create a timeline photo for your personal profile to get people to do things that you want them to do (join a group, sign up for something, etc).

This is crazy-freakin’-easy - here goes.

First, head over to your profile and look on the left-hand side at the “intro” section (where you live, where you graduated college, etc).

This section needs to say “I do this at that place”, with “this” being your short tagline and “that place” being a tagged version of your Facebook Page.

If you don’t have this setup, you’ll just hover over the little pencil (Facebook’s universal “edit” symbol) on the right-hand side and click on it.

You’ll then see a screen that looks like this where you can toggle on and off your workplaces, edit your existing workplaces, or add new ones.

You’ll want to “add a workplace” if you don’t have one already OR edit the one you have to send more people to your business page - either way though, you’ll click “add a workplace” (yes, even if you’re wanting to edit the existing workplace and tagline).

You’ll then see a screen like this:

If you want to add a workplace, you’ll click the button that says just that. If you want to edit your existing one, you will click on the same editing pencil icon to the right of that section as you hover over (in my screenshot above, my editing pencil would have been a smidge above the “North Carolina”).

Now, either way you go, you’ll see a screen that looks like this:

Now, here you’ll want to:

  • TAG your company (add in your business Facebook page) in the “company” field.

  • Provide a SHORT (like super short so that it’s still all seen on the hover) tagline in the position (you may have to add it as a position but that will come up when you’re typing).

  • Add a description.

  • Make sure it’s “public”.

  • Save.

After you get all of that set up, when someone hovers over your name because you posted or commented in a group, they will see your info and be able to click on your business name (and then proceed to fall deeply in love with you and your business) super easily.

Ok, next step. You will want to create a timeline photo for your personal profile that prompts action from anyone in business groups who might be stalking your page (don’t act like you haven’t done that).

You can easily just write “click here for more information” on your timeline photo or you can get more creative with it, but I would say it needs the following information to be super effective:

  • Your business name

  • Your title

  • A “click here” prompt

  • URL(s) to your website.

All you need to do after you’ve designed this photo is to upload it and add a description with live links to #allthethings you want someone to know.

Here’s my timeline photo (I’m realizing that I’m missing a few key pieces of info that I just told you you needed...those who can’t do, teach):

Now I click “add a description” here, and I can add all kinds of live links and tags to help people find me more easily.

See, super easy.

Now, someone can join my FREE Facebook group, they can visit my website & they can click through to sign up for my latest workshop.

So easy, right?

I promise that all of this makes a HUGE difference in your business, and most groups will even vet you and your information to make sure you’re an actual business owner before granting you access to their group.

Go forth grasshopper - do the thing.

For a video version of this post...you know what to do.



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Profitability, Entrepreneur

Pricing Has Nothing To Do With Numbers (BONUS: FREE Download)

Pricing is our jam. Figuring out our worth so we can pay our bills, grow our business and have happy clients and customers is kind of our favorite. In fact, pricing is what brought this whole thing here at TCC together (meaning it’s how Emylee and Abagail met!). The very first program that we launched together was called “Pricing for Profit” (now known as The Money Making Creative). All that to say we’ve had the conversation about pricing with other creatives many a time, and you want to know a big fat spoiler? When it comes to mindset and “do you think they will pay $X?”, pricing has absolutely nothing to do with numbers.

The number one question that we receive from every small business owner is something along the lines of, “What should I charge for this?” As creatives, we all want there to be a magic number that we can charge for our services or products. A number that we could choose, and then automatically succeed. But by looking at just the numbers of your pricing strategy, you are leaving so much out of the equation.

Pricing is our jam. Figuring out our worth so we can pay our bills, grow our business and have happy clients and customers is kind of our favorite. In fact, pricing is what brought this whole thing here at TCC together (meaning it’s how Emylee and Abagail met!). The very first program that we launched together was called “Pricing for Profit” (now known as The Money Making Creative). All that to say we’ve had the conversation about pricing with other creatives many a time, and you want to know a big fat spoiler? When it comes to mindset and “do you think they will pay $X?”, pricing has absolutely nothing to do with numbers.  |  Think Creative Collective

So, first we’re going to burst your bubble and tell you that you just need to pick A number. You will never pick the right number the first time. There will most likely be price increases, package tweaks, new offerings, and offers taken off the table. The only way to get measurable results is just to just pick a number, any number, at first. However, here are a few guidelines that you should consider when calculating your pricing.

Pick a Number That Feels Right to You But Scares You a Little

If you constantly pick numbers with which you’re totally safe, you’ll probably never see the business results you’re dreaming about. The number you go with needs to make you feel just a little bit crazy-excited about the potential of your business, while also staying true to the authenticity of your biz brand.

Pro tip: If putting some math into it will help you take the emotion out of your pricing, then do that. Figure out how much you need to be making every single month to pay your bills, save for school, pay off your house or just to help with groceries. It doesn’t matter. If you know what number you’re hoping to get to, you can work backwards from there.

Add Value For Your Clients Instead of Slashing Prices

We understand that you want to create hype around your products or services, and the usual way of doing this is by having sales. But, depending on what you’re offering, a sale could actually hurt a client’s perception of value. So when you want to have a “sale”, think about keeping the price exactly the same, but add value. (Think: How can you add in more of your time? Can you create a quick and easy printable or download, can you add additional products if clients spend X amount, can you add in a bonus hour of your time, et cetera.) However, you definitely don’t want clients waiting around for your next sale before buying from you, so make sure you implement this strategically.

Showcase Your Offerings in Packages

There’s a specific psychology behind combining your offers inside packages. Your clients are able to see the value of a simple upgrade to the next package at a quick glance. Usually, the package you want clients to gravitate towards is your “middle of the road” package — it’s neither your cheapest, nor your most expensive. To your clients, it becomes the no-brainer package. Design your lowest and highest packages to highlight your middle package, and your clients will feel super confident in their decision. Your lowest package should cover the bare minimum of what you need to make from a client to make sure you’re making ends meet. Any upgrade from there is just icing on the cake!


As you can see in the strategies above, pricing involves far more than just picking the “right” number. It’s all about providing great value, charging what you’re worth and staying true to your brand.

We want you to be able to dive further into making your biz profitable. We want you to shake off the overwhelming thoughts that it’s “always about the numbers” and understand that there are distinct strategies that you can use to get there. But before you get there, you need a plan. Yes, an actual written down plan. Some might call it a business plan. We like to call it “Party in my Biz Pants, Because Now I Know What the Heck is Going On Plan”. Rolls right off the tongue, yeah?

We wouldn’t want you to head out to make this plan without some guidance. Heck, we don’t just want to give you guidance, we want to give you the freaking worksheet to make the plan. Oh, and it’s free. Happy day! We created The Easiest Business Plan Ever and you can grab your free copy by heading here.

Pop in your first name and email and we’ll send it right over. Here’s what we DON’T want you to do: please do not go download it and love it but let it die a slow death in your “Downloads” folder. It serves you no purpose there.

 

Instead, go download it and PRINT it off immediately. Even if you can’t fill it out right this second, at least have it sitting on your desk. Or taped to your fridge. Or the wine rack. Wherever you’ll see it the most and be reminded to do it.

Then just spend a half hour (seriously, don’t overthink this) and fill it out.

And then we want you to call us when shit starts to go down in your business, because we told you so. Really. If you don’t call us, at least email us. Heck, email us to call you and we will.

So stop reading this and get to printing. Right now. Tag us on Instagram (@ThinkCreativeCollective) in a shot of your blank piece of paper so we at least know you’ve printed it. Then we can hold you accountable.


SHOW US YOUR PLAN ON INSTAGRAM