Part 2 – The Stuff we don’t do so well.
So, as we discussed in the previous article, one of the keys to being successful in business is most definitely taking the time to figure out what you are good at and what you are not good at. I have found, that spending time breaking down each of my business operations, has helped us grow quite a bit. With that said, I also decided to split this article up one more time. This entire blog will be dedicated to organizing, the collection, and managing of money. What could be more important?
After sitting down and evaluating the topics I wanted to cover, with regards to financials, I quickly found it a little overwhelming. So often, you read articles regarding money and the eyes begin to glaze over after the 15th time someone has said debit or credit. My other favorite is usually when they speak about the tons and tons of things you WANT to be doing but cannot yet afford or dream about yet. I want to know the meat and potatoes of the topic.
In this day and age, there are so many things to consider when you own a small business. Do I need a store? Should you sell online? Where should you sell? How much is selling online going to cost me? What’s the difference between EBay, Artfire, or Etsy?
Once you decide to sell online, at home, or in a shop, you need to begin to think about how you will collect the millions and millions of dollars you will be making. (Yeah Right!!) Will you take payments by phone, in-person or directly on your website? Whichever choice you make, one or all, there will be a price attached. For instance, we often make the mistake of thinking that selling online has no overheard. It’s definitely smaller than your average brick and mortar store but there are still things to consider. Shipping costs and supplies, credit card fees, Seller fees, etc. These things can add up. When you are pricing your items, you will need to take into account how much it costs you to accept payments, shipping, and seller fees (PayPal fees). For each channel of business we sell in, there is a specific fee that I add into pricing that covers those costs. Starting out, forgetting these types of costs, was one of our biggest mistakes.
There are a million vendors out there that make accepting funds credit cards very simple. The biggest tip here will be determining how often you need access to your cash flow. For instance, PayPal offers debit cards for easy access to cash. While most other vendors have a 1 to 2 day turnaround. Traditional merchant accounts can take as many as 3 days. We all know in small business that 3 days can be a lifetime.
Other things to consider WePay offers payment sites to users without a web page for easy payment acceptance, in case possibly you run a Facebook only store or a service based business. Square is a free mobile credit card swipe, simply pay a percentage per transaction. No monthly fees attached. It all depends on your needs. PayPal offers a similar service. Again, we do not endorse any companies, these are just the most commonly used out there. Although, I have been a PayPal customer for a very long time.
When it comes to one of the most troublesome money management tasks, SHIPPING, it can often be a silent but deadly killer. The beast that seems to drain you and your customer’s wallets. There have been some real advancements from both shipping vendors and a few new applications that make managing shipping much easier.
Both Shipstation and Shipworks offer packages that almost seem to good to be true. Anyone, that has been shipping online for more than 15 minutes knows what a pain it is to ship packages and get accurate rates, on-time deliveries and accurate reporting. I would recommend spending at least 3 months shipping and build up a decent rate of business before adding one of these tools. It’s not a tool to use, if you will be shipping 2 packages a month. But if you are going to be shipping 20 packages a month or more, its MORE than worth it.
These two applications pretty much do a lot of the same things but differently.The first thing to do is make sure your cart is compatible with the products. Then possibly try the 30 day trials that each offer and figure out which one is a good fit. These tools automate shipping emails, integrate your e-commerce cart, and offer reporting that can save you money. They sort of keep your shippers honest. If you have ever tried to get a report from the Fed-Ex website, you know what I mean. Both of these tools offer real time shipping quotes as well. The absolute BEST thing about them both is getting all of your shipping in one place, no more manual entry from multiple channels.
Now, lets talk about keeping track of the money. This is one of the most common issues with money management. We have tried paper systems, computer systems, and many other methods to easily track the money we have going out and the money we have coming in. In all honesty, they all do they same things, Cash vs. Accrual, Stand alone applications, Web based applications, or even the most primitive the paper method. Below, I have listed a link to a comparison chart of the popular accounting packages out there. Both online and stand-alone. (None of which are endorsed or paying for mention) These are just some of the systems we have tried in the past.
Some Popular Accounting Suites
Once you get past the dreaded idea of book keeping or accounting, you then needs to make some choices about what works best for you. I hate to break the news to you but there is NO easy way to track finances. No matter which option you select, the key point is to take the time to work the process. In todays market we have so much more to keep track of than just money. We have to keep track of all the channels in which we take money in also. What those channels cost us and at the end of the day, is it all worth it?
Spending the time to keep up with your finances will make a lot of these decisions easier. It will also make things a lot easier when it comes down to asking for financing or speaking with potential investors. Keeping an up to date financial picture of your business is absolutely key to getting financial support.
A few things to consider when choosing an accounting suite….
1. Access – How will you gain access to your application? Is it web-based from any browser, phone access, stand-alone software? Easy access to your finances will just simply make your life easier. Nuff said!
2. Support – I cannot stress enough how important it is for support to be easy to access. Unless your skill set is in accounting. Which would make this article a little pointless for you, lol. Make sure that when you select a suite, you determine how much support you have and for how long?
3. Usability – Ok, we are talking about your money. This application needs to be useable for you. An application that makes this dreaded time drainer, not a horrible feat of death right out of the gate. There is always a learning curve, take advantage of trials. Feel out an application before you commit to it. Every popular software out there give you a trial to feel things out before you commit long term.
4. Professionals – If you can afford a professional, GET ONE! That is all there is to say about that. Do your research and ask for references.
If you take a moment and examine some of the items I have listed, this process can change from dreaded to less dreaded. The easier a process is, the better and more likely it will be for you to commit the time to manage it. The most important thing to remember, your financials sum of the worth of your business. As small business owners we put our heart and souls into our business, tracking your hard work takes time, but the outcome is worth it.
I hope this article gives you some tips on some of the things, that I know stumped me when I started my business. If you have questions, feel free to email us at firstname.lastname@example.org
Till Next Time Crafters,
The Glitter Gazette