This article was contributed by Shantel Susan-Haines, the founder of Shantel's Money Guidance.
As a Creative-Artistic Entrepreneur, you have likely heard that you should know your key business numbers and have business money systems in place.
Like many, are you a little bewildered as to what you need to know & do?
Knowing only the essentials, the "must-knows" about managing/handling the money and finances in your business AND being comfortable to do so are important to the survivorship of your creative-artistic enterprise.
Bring about your new connection with your business money through linking to your inner confidence and discover ways to arouse this. You can’t have a new beginning if you remain with your prior ways of thinking about your business money. It all starts with deeply finding your inner confidence and then securing it as a place of retreat when your confidence wavers.
Here are some key areas that you should consider in order to work into your creative business money best:
Arranging Your Bookkeeping in Order and in Place
To start, know that bookkeeping is NOT the monster it is made out to be . . . it is there to serve you and your business as an artistic-creative entrepreneur.
Good business money handling and management starts with having a bookkeeping process in place. This often eludes many entrepreneurs as it seems so complicated, but it doesn't have to be.
Whether you plan to perform your own business bookkeeping or engage someone else - you need to ensure that it actually happens!
Consider that 3 of the best reasons to have a good, quality bookkeeping system in place will:
1. enable all of your business transactions to be recorded
2. it will empower you, the business owner with the ability to understand your business financials, and
3. it will allow you to properly file your taxes
Becoming enlightened about what you need from one of the more puzzling and time consuming aspects of your business money. Finally, making a decision about your bookkeeping really comes down to: hiring bookkeeping help or performing it yourself.
While it is acceptable to decide to perform your own bookkeeping, but even if you hire a bookkeeper for that work to be performed, you should look to a professional accountant particularly for year-end, tax filing and more specific queries that you may have.
There are significant cost savings in employing an accountant and taking their professional advice. As a business owner with little or no real business experience, it takes a professional with the training and experience that will translate into helping you make better, more informed decisions. The cost is well worth it.
Understanding Your Income Statement & Profitability Points
You may or may not know it but your business income statement is by far your most important connection to better understanding your business money.
What is the Income Statement?
The Income Statement or Profit/Loss Statement provides fundamental financial information for you, the creative business owner. It shows you the revenue, cost of sales, gross profit (loss), expenses and net income (loss) for your business for a specific period.
It allows for financial performance comparisons to be made between different time frames.
The income statement shows if the business is profitable and if expenses are under control. It also shows if revenues are increasing at a rate that can sustain the cost of sales and expenses the business is incurring.
Also, you should know your Profitability Points. Consider that you may already know when you are making money with selling your artistic-creative products/services (items & talents), but do you know the exact numbers? If not, you need to be confident and aware of these essential numbers in order for you to be operating your business at its optimum.
If you work with your important Profitability Points, it becomes part of your savvy as a truly creative entrepreneur!
Next Time Part 2 . . .
Shantel Susan-Haines, Founder
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