|L-R: Robin printing postcards, the lovely sky at the end of the day outside the studio, the babe watching Robin work.|
Well it would have been nice to spend the day doing nothing but relaxing and enjoying cute little baby cuddles (omg, they're totally the cutest!) but there was printing to be done this weekend, and orders to be caught up on and a few loads of laundry as well. We enjoyed our day off tremendously, especially since the weather has been cooling off a little here lately (it'll be back to hell-adjacent by Wednesday though!), we hope you enjoyed your day off too!
Sunday: Know your numbers! Figure out the cost of doing business. What are your fixed costs, your variable costs and your bottom line?
One of the reasons why so many small businesses fail is poor management. New business owners often lack relevant business and management expertise in finance, purchasing, selling, large scale production and the management of employees. In order to run your business efficiently, you need to work on the business side of your business just as much if not more than you work on the production side of your business. If you don't know your numbers, you'll find yourself sinking fast.
We didn't always know our business inside out. As we mentioned the other day, we started our business in a very roundabout kind of way. We knew we wanted to work on something together, and then it turned out to be this. We had some experience going in, but there was still a rather big learning curve.
There are two types of costs incurred by a small business. You have fixed costs, these costs stay the same month to month and sometimes year to year. A good example would be the rent for your studio space, utilities, hosting fees, payroll, memberships to professional organizations etc. Then you have variable costs. These costs vary from month to month or year to year. These can include trade or craft show fees, advertising, short-term help, special purchases among other things.
In order to make your business profitable, you must first determine your bottom line. This is done by adding your fixed costs and your variable costs. A good way to do this, is to look at last year's numbers. If this is your first year, then combine your year to date with your projections for the rest of the year. This bottom line number tells you how much of your product you need to sell or how many clients you need to maintain in order to turn a profit.
It's important as you run your business to keep up to date on your numbers. Check in every once in a while to make sure that you're still on target. Set goals, create action plans, keep pushing yourself to be better at what you do. And know your numbers, know them backwards and forwards. If you don't know where you are financially, then who does?
We've just started working with a new online accounting program called Wave. It's similar to Freshbooks but free. We've got high hopes that it will work well for us until we're ready to make the jump to Quickbooks.
Today: Think about the businesses that you admire, that are similar to yours. Carefully choose one or two whose trajectory you would like to emulate. Spend some time looking at how they handle their business. What are their marketing strategies? How do they use social media? What steps can you take to get yourself to where they are?