IS YOUR BUSINESS MAKING MONEY? PROFIT AND LOSS STATEMENT 101

IS YOUR BUSINESS MAKING MONEY? PROFIT AND LOSS STATEMENT 101

Today Id love to give a warm welcome to DANIELLE HAYDEN from Kickstart Accounting! She will be teaching us all about profit and loss within our business.

 

Profit and Loss Statement 101

Have you ever thought to yourself – “Is My Business Making Money?” While the answer may seem simple, it’s actually not. Instead of dwelling on the past, you should instead be asking yourself “What Can I Do To Grow My Business?” But you’ll first need to know how your finances are looking. And the first step to figure out how much your business is really bringing in is to make sure you are fully understanding financials. To familiarize yourself with the financial workings of your business, you’re going to need to look at your Profit and Loss Statement. Since this document lays out how much your business made and how much it loss over the fiscal year, it provides you with a visual snapshot of information that can help you better make decisions. Here’s a look at how to use your Profit and Loss Statement to make business decisions what will grow your company in the next few months and beyond.

 

Top line Sales

Analyze where you are making money Analyze what products you make the most money from and market those products.

How much does it cost you to make each product? Don’t forget just because a product is selling it doesn’t mean that it is your most profitable product and it doesn’t mean you are making money from it. Look at each one of your products to understand how much it costs you to make that product. List each ingredient and the amount used per unit plus the amount of time it takes to create of unit of your product. If you are a service based business use the amount of time it takes to provide that service multiplied by the standard rate of pay for that service

Operating Expenses-These are the expenses that you incur to run your business such as insurance, rent, dues, software, etc.

Find Pitfalls & Wasteful Spending Profit and Loss Statement gives you a snapshot of what you’ve earned and what you’ve lost. This means you can easily spot any areas you need to cut back on to get your take home in the green. Don’t forget about that software you signed up for 6 months ago and forgot to cancel it (we’ve all done it!). Use this time to understand what you are using and is it worth the costs.

 

Look into the future and set goals for your business

Now that you understand what products are driving your sales, what your costs are to create those products and what operating expenses you have to have to run your business you can start to look at the future and set goals for your business? What amount of money do you want to be bringing home each month? Once you know that you can determine how many units or product or service hours you will need in order to support that goal.

 

For example:

Goal 2,000 per month Fixed operating costs 500 per month

Cost of goods sold to create 1 unit 25 per unit Selling price of one unit 75 per unit Profit per unit 50 per unit

Number of Units that need to be sold to reach my goal 50 Units

= Goal + Fixed Costs / Profit by unit

Stop asking yourself “Is My Business Making Money” or “Why Can’t I Grow My Business” and finally find out the truth. As you can see, understanding financials is a key aspect of responsible business ownership. Keep your Profit and Loss Statement handy when making business strategies, creating plans or laying out goal sheets. You’d be surprised just how much you can learn from a simple profit and loss statement!

3 Tips to Master the Creative Industry with Lauren Connelly

3 Tips to Master the Creative Industry with Lauren Connelly

In this creative industry, it is hard to meet people where they are at. We are intimidated by the number of followers others have, the number of comments on each post, or even the quality of images on their feed.

So instead of reaching out, starting a conversation, and learning from them, we envy from afar. We soak ourselves in this envy assuming no one else struggles the way we do.

I’m sharing with you my 3 tips that help me praise and value the creative industry without devaluing myself.

Jot your thoughts down!

Your first thought is probably, “Lauren, I don’t even have time to shower every day. How will I find the time to write?” Trust me, I get it!

Jotting down your thoughts is important because you need to cherish the process. You aren’t going to gain 1,000 website views within a month of starting your business. Starting out with an empty website is something to be proud of. You took a leap of faith, now write about it! i.e how you got started, what website platform is the best, or tips for building a website. Maybe the next day you write about struggling. In the end, find the beauty in starting something and watching it flourish. Even if it includes a few dead flowers here and there. If you can’t find inspiration anywhere, start by writing down a quote on a post-it note every day. Occasionally look back at the quotes that helped you keep going! Starting is the hardest part.

Reach out to other creatives in your area.

Honeybook. I talk about this all the time because I’m so grateful for this space of the internet. Honeybook is a one-stop shop for creatives. In addition to managing the financial side of your business, you can also find people who are also photographers, writers, graphic designers, jewelry makers, etc. Honeybook allows you to connect with people near your city or another city. Send a message and ask if they want to meet for coffee. There is even a place to find collaboration opportunities near you!

Schedule out your day.

Whether this is your full-time job or a side gig, schedule out what the week looks like for you. Are their deadlines coming up? Do you have a collaboration you need to photograph? Write down everything you need to do and then plan out your week. Not having a boss or set job description makes it hard to not say “yes” to every opportunity. It’s okay to say “no” to a lunch meeting if you know it’s going to take all day to finish a project. Remember that you are your best self when you aren’t stressed. Planning out your week helps make sure you’re always prepared.

Meet Lauren!

View More: http://dgiovinazzophoto.pass.us/connellyfamily

Hi there! I’m a midwest girl, turned Floridian, and now living in the South. South Carolina to be exact. At 22, I’m holding onto a Bachelor’s degree in Communication, working retail to pay the bills, and running my own business as a content writer and product photographer. And loving every second of it, I must add. I hope one day to inspire people to do what they love. On a day off, you can find me walking my pup, Wilson, all over my little town in South Carolina.

You can find me on Instagram @Lauren_Connelly or through my website www.writerLaurenConnelly.com. If you have any questions, please email me at writerlaurenconnelly@gmail.com. I’d love to chat!