I owned a children's consignment store in Alberta for four years, and before that, worked part-time as a freelance writer around my full-time career. When I freelanced, balancing my books was as simple as having a few columns in a spreadsheet—I’d enter in my expenses and income. A simple calculation gave me a running total of how much profit I had made at any given time.
Then I opened my store. Instead of one or two transactions to enter a week, I was looking at hundreds. I had a business bank account and credit cards and a line of credit, and never knew exactly how much money would walk through the door that day.
For longer than I’d like to admit, I buried my head in the sand about how the business was doing financially. If there was money in the bank account I’d happily take a personal draw to spend, forgetting about (ignoring?) bills in the mail from the government, accountant, and suppliers.
Then when they arrived—yikes! Hmmm…hope we have a good sales day tomorrow.
Not the best plan. So I got serious and worked with my accountant to create a cash flow statement. Where I realised exactly how much money I was making. When I compared it to how many hours I was working and what we paid our live in nanny, the future for my store was a no brainer.
I closed my business in 2009. I should never have stopped my habit of having a cash flow statement updated at all time. I would have been more cautious with my spending in the business and outside of it, and had a clearer picture of what was (and wasn’t) working for my business. Like, say, far too many lunches at Original Joes with business associates.
Now that I work strictly from home again, I’m religious about maintaining my bookkeeping and cash flow statement and sharing it with my spouse regularly for a second opinion.
Whether you deal in small numbers or large, you should know every day how much you’re up, or down, for the year, and how much you expect to make by the end of the year.
For those in direct sales, expenses can add up quickly, even if the company you signed up with claimed to provide everything you needed to run your business for free. Tradeshow fees, display items, gifts for hostesses or referrals, additional samples, gas, phone—is your income covering this outlay easily, or is the money you’re making being eaten up by these nickel and dime expenses?
Women working from home making a product like hair bows or soother clips face these expenses, plus more. Materials, shipping materials and costs, web design or email newsletter charges all need to be tracked.
If your business is large enough, you can have your accountant help you set up your cash flow statement, and then manage it yourself. If your business is small, you can make do with a simple cash in, cash out spreadsheet in Excel, with a running number showing your profit so far. Here’s a great example perfect for the very small business owner.
Is your business making money? If it isn’t when will it? If it is, is it making enough that you’re content with the time you’re spending on it?
Check in again next week, when I talk about why you should (or shouldn’t) close your part time business, just because it’s in the red.
Did you enjoy this blog post? You might like Saving Money in Your Home Office or Are Daily Deal Sites a Good Deal for Your Business?
On Tuesday morning I surprised my 6-year-old with a trip to Disney World. Keeping that a secret for two months has nearly killed me, but it was totally worth it. Because we captured this with our video camera:
I am completely incapable of keeping a secret when it comes to gift giving. I generally wait until the very last minute to buy presents for my family and friends because I simply can’t stop myself from telling them what the present is or giving it to them outright long before the big day.
So the two months leading up to the trip were a serious exercise in self-control. The week before the trip I was offered a chance to travel with work for a few days, and I leapt at the chance to get outta town just so I wouldn’t have to be around my daughter! How sad is that?
Because she has been to Disney Land before and occasionally still asks when we’re planning on going again, I made a point to tell her that maybe next time we could go to Disney World. I explained just how much bigger World is than Land, all while keeping it very general and “someday”ish.
I’m pretty amped about this trip, and clearly, so is she. I’ll be posting about our adventures doing Disney World on a budget as I discover the best deals!
The best Mother’s Day gift I ever received was a few weeks belated. It was given to me a few weeks after Mother’s Day by my mother when I had my first child in May of 2005. It wasn’t an expensive gift, but it was an incredible one.
My mother had filled out a Mother’s Journal book, and given me a blank copy to do the same for my children. It contained page after page of her stories, memories and details about her life growing up. Many stories featured my brother and I, and many I hadn’t heard before. The book contained her thoughts and dreams and aspirations and fears, and I felt like I knew my mother far better than I already did.
Since that day I’ve been diligently filling out my journal, and I’m in awe. It can take me up to an hour to record just one memory, and she recorded more than one hundred!
Since Mother’s Day is just around the corner, I’m giving away a copy of For My Children: A Mother’s Journal of Memories, Wishes and Wisdom by Dionna Ford of CodeNameMama.com. To enter, simply add a comment and tell me your favourite memory you have of your mother (or stepmother, grandmother, or another cherished figure in your life).
For My Children: A Mother’s Journal of Memories, Wishes and Wisdom contains thought-provoking, fun, and creative prompts that allow mothers to share a lifetime of experiences. A copy is a fantastic gift for the mother's in your life, and it's certainly budget friendly.
To read more about the book, check out the author’s page.
Yummy Rules and Regs: You must be a Yummy Mummy Club member to win. Click to sign up! It's free and filled with perks. One comment per member. Entries accepted until April 25, 2012. Contest open to Canadian residents. Winners will be picked using www.random.org.