Tax season is here, whoop whoop and that means it’s time to pull all my business documents together to take to my accountant. This blog post is an encouragement to you as much as it is to me to stay on top of these business financials, so we wanted to re-share.
There’s a reason people don’t take up business finance as a weekend hobby. Organizing your handmade business finances is one of those tedious business chores that’s easy to procrastinate in favor of buying more craft supplies (!), fulfilling orders, creating marketing content or good ‘ol watching Hulu.
But here’s the thing; getting your business financials together is too important to avoid or put off. Doing it right and consistently can be a game changer for your business. Here are eight reasons to show your finances some love.
1. Enjoy the fruit of your labor…i.e. make sure you’re actually making money. Running a handmade business requires a lot of blood, sweat and tears. Make sure you make it count by taking a look at whether your operation is profitable.
2. Take advantage of larger opportunities like grants, incubators or small business funding programs. Free money is always a good idea. Organizing your finances positions you to answer questions on grant applications about your revenue and profit trends without a last minute scramble.
3. Put more money in your pocket. Every business has waste and opportunities to improve. Taking a closer look as your expenses and income helps you to avoid waste, identify problems and address products that are not making money.
4. Evaluate investments like tradeshows, craft markets, software, photoshoots, etc. Craft markets are a lot of fun, but the associated expenses can add up. Looking at the numbers in totality as part of your financial process helps you make better decisions.
5. Celebrate your progress! You’ve come a long way with your handmade business. Clap for yourself and look at your numbers over time to appreciate your growth and set plans for where you want to go next.
6. Make decisions about new product introduction. This is similar to number 3, but the pre-emptive version. Launching new handmade products takes effort and resources; understanding profitability and projected sales ahead of time can help you decide if it’s worth it.
7. Make decisions about staffing and pay business taxes. On the fence about hiring help? You guessed it; understanding your cash flow from month to month can indicate whether you can afford it and how much you can afford.
8. Save time and avoid having to “cram” when you need to report earnings or loss when you file taxes at the end of the year. If you been there, you know. Pulling together 12 months worth of receipts, online expenses, sales reports, etc ahead of a tax filing deadline is NOT fun. Staying organized through out the year keeps things fun.
Struggling with your business financials? Consider getting help by hiring a bookkeeper and/or accountant. Can you relate to any of these reasons to get your finances organized? Share tips on what’s worked for you below.