Business 101 - Part III - Inside Gal

Hi All,

To every successful business structure there is a pattern: an inside gal and and outside gal. That is, there is someone who handles the books and money aspect of things, and someone who creates as well as goes and actively seeks customers, business opportunities, and generally schmoozes with possible future customers, thereby creating the driving outside force of sales.  Often times, as a small business owner, we find ourselves having to juggle these two hats, and most of the time having to stack them on top of each other.

Inside Gal
First things first, organization is KEY! Set up a seperate folder system or drive on you computer specifically for your business. Procure Microsoft Office Excel; and a tabbed and labeled binder.

The Binder

In this binder you should keep the following:

1.  Any formation documents for your company - if you are large enough to have formed your business with the state, you will have these. Even if you are just a D/B/A, you should consider drafting these documents. It helps to solidify the fact that you are an operating business in your own mind, as well as clearly define to yourself who you are and the services you provide. Guidlines for drafting the Certificate of Formation can be obtained from the Secretary of State.

2.  Any renewal information or name change information - Again, not *necessary* for small D/B/A's, but it's nice to have.

3.  Standard Forms - If you have forms such as an e-mail request form for craft shows or a standard Model Release, you should keep the hard copy here.

4.  Receipts and Pricing - As the Inside Gal, it is your job to know the cost of everything.  Keep your receipts so that you can keep pristine records. If you paid five dollars for a bag of thirty beads, but you only used five of them on a project, do the math to see how much money you spent to make your entire piece. Do the math for all supplies involved. When figuring your price, do not count for the time of making your piece - of actual "crafting". (This is where a lot of people go wrong.) Your pricing should be based strictly upon the cost - the money you expended to purchase supplies. After you have figured the price of each item you use, add it all together. Double your total, and, if you still think you could sell it for more, then list it as such. (This pricing technique takes into consideration listing fees, paypal fees, promotional purchases and renewal purchases for working online.)

Don't forget to keep your shipping rates rational for the piece you are mailing. This is an extra expense to your buyer, and if it is unreasonable, it can break the deal.  If you are doing a craft show, simply add the cost of shipping into each piece - after all, you hauled all of it to the show!

5. Business Plan -  Basically, this is who you are, what you are doing, and how you intent to go about it. If you ever expect to get a loan for your small business or have investors, it is typical that the people you would go to for such funds will require a business plan.  Since this, in itself, presents such a challenge for some business owners, click here to view some great tips re: business plans.

6.  Design Ideas - This is optional. I keep mine in a separate binder as well as keeping a sketching journal.

7.  Receipts and Convos for Your Transactions - I like to keep detailed records of what and who I sell to, their likes, dislikes, and any conversations I've had with my client. I take notes and write down everything I can remember about them, and then I file these in my binder. It's nice because Etsy records all your sales so it's easy to just print them off and file them away.

***

EXCEL/BOOKKEEPING
Draft a worksheet in Excel that lists all of your items, their cost, what and when you listed them, how much you listed them for, the discounts offered, who and when you sold them to (address included) and the final profit on your pieces. Fill this sheet in as you go. With this information you can see who and where you are selling to and how often. It also offers all your information at a quick glance. Additionally, you can take this information and plot a line graph to see the flow of your sales.  This becomes important for the following years with regards to YTD sales and setting goals, which I will discuss in following posts.

Hope you found this helpful!

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