This is an important topic to me because I hate accounting. I love owning and operating my own business but I was always putting off the accounting until the last minute. Definitely not a good idea and it always caused me long nights finishing up the books for sales tax or income taxes or something else. That was a problem for me until about three years ago when I found Outright.com.
Before I go any further, a couple of things. First, I plan to repost this on my other business blogs because it is applicable to all of them. Secondly, I do not have any interest in Outright.com nor am I an affiliate. I just think it’s a get service that has saved me a lot of grief. Thirdly, Outright.com is now owned by GoDaddy and the service remains just as good as ever.
To use outright.com or, as it’s called now, GoDaddy Online Bookkeeping Service, you have to start by being a business. That is, your business income and expenses should be separate from your personal income and expenses. You need to have a business bank account, or more than one, and a business credit card or a service like Paypal. Once you are operating like a business then this accounting service is for you. They do the following:
1. Automatically import data from your bank, credit cards, PayPal, eBay, Etsy, and Amazon.
2. The categorize all your transactions into IRS approved categories
3. They provide profit and loss, expense, and customer reports.
4. You can create, send, and track invoices.
5. Create tax worksheets and reports, Annual Summary, Schedule C, estimated tax and sales tax reports.
6. They import all your data nightly.
Basically, they do all your accounting so you can simplify your invoicing, know your profit and loss, handle your taxes easily, and it is totally secure.
Most importantly, they do this for only $9.99 per month. All of those tasks are handled for you professionally for a small price. I can’t imagine going back to to doing my own accounting. I have done my taxes for the past three years using the information complied by Outright with excellent results and I definitely recommend the service.
Check it out at http://outright.com and enjoy.
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In the previous post I said that I never speculated in my woodworking business. There were several reasons for this. As already mentioned, speculating requires investing in the materials and your time without assurance that the product will sell. While this is exactly what most retail stores do, it’s not a good idea for the one-person, home based business. In addition to the front end cost, you need a place to sell your products. You can set up on the highway somewhere and get drive by business. You can place your products on your front yard or your driveway but both of these could cause you legal problems. You can also create a web site to show your projects or even try Craig’s list. Both of these create the problem of collection and shipping.
For the one-person shop contracting for individual jobs is the best way to ensure a steady income and perhaps a good profit. More on Contracting in my next post.
Speculation is mostly defined as participating in risky investments, especially in the stock market. To me speculation has always meant risking my hard earned money on making projects that were not sold in advance. For a one-person woodworking business speculating means using your own money, savings, credit card, or other borrowings to finance projects to be sold at some future time.
There are some woodworkers who manage to succeed financially with this kind of speculation but I have always chosen to avoid that process. I designed and sold every job and acquire a significant deposit before starting any project. In almost every case, this ensures that you will get paid in full. In thirty years of woodworking I never lost money on a job because the buyer failed to pay or the item did not sell.
Financial success in woodworking as in any business depends on getting paid for your work. Avoid building projects on speculation and you will have a much better chance at financial success.
Sorry for the lack of posts lately. I just returned from a vacation in Ecuador and while I had good Internet while there, time with family precluded posting. I did manage to maintain a web site about my vacation for family and friends. You are welcome to check it out at:
Beginning tomorrow I will try to post diligently and I welcome your comments. Thanks.
For those of you like me who read on a kindle reader, my new book, Woodworking Business 101: A Basic Business Guide For Woodworkers, is now available for only $5.95. As with all my how-to books, it’s based entirely on my own first-hand experiences so the methods work to save you time and increase your profit. Check it out at:
As always I welcome your questions and comments. Thanks.
Especially when doing work for commercial customers, contact similar businesses to determine if they need similar work. One such situation arose for me when I designed and built a small lectern for a local hotel. Since many companies hold business meetings at hotels, it made sense that other hotels would need lecterns. I took a picture of the lectern and sent it together with a letter to the ten largest hotels in Austin. Within two weeks I sold almost $6,000 worth of lecterns. One of the customers I got asked me to design a lectern that would take a beating and also facilitate easy repairs. I delivered the lecterns and continued to get all kinds of work from that hotel for over three years. All of that from one lectern and ten letters. Always check to see if others might be interested in the jobs you complete. It could bring you income for many years.
A good customer once hired me to build a small desk for their kitchen/dining room area. It was basically a telephone message desk with shelves above for recipe books. She knew exactly what she wanted and told me where I could see one. Unfortunately, I knew better and just drew up a desk and she liked the drawing. Once I delivered the desk she didn’t like it at all even though it was exactly like the drawing.
Here is a situation where you spent the time and material and built a nice desk but it’s not acceptable. This was a long time customer so I decided to redo the job and this time look at the desk she wanted me to see. Once I saw that desk, I realized a couple of things. First, I really had no idea what she wanted because she couldn’t convey it clearly. Secondly, she could not visualize the desk from my drawing.
I built another one for them and she was thrilled with it. More importantly, they could hardly believe that I just built the new desk without complaint and without attempting to charge them more. The end result for me was a little extra cost and work but a lot of referrals since they bragged to everyone how I handled their desk issue. It brought in thousands of dollars in jobs because they ran an insurance business and had hundreds of customers.
Being right is not always what it’s cracked up to be. I delivered the desk in the drawing as I agreed to do so you could say that I was right. However, by making the customer happy I gained much more. Besides, if I had not been so sure of myself and gone to see the desk she asked me to see, the entire issue could have been avoided.
How many times have you heard “The customer is always right?” Obviously, that isn’t true but he or she is always the customer, the one who pays you and deserves consideration if an issue arises. In woodworking, as in any other business, most things are not just black and white. Your long term success depends on understanding that sometimes there is gray.
If you contract for a project and you have created detailed drawings and clear specifications that you follow to deliver a quality product, you are not expecting issues. What happens if your customer is dissatisfied not because of the quality but because they didn’t understand the drawings and were expecting something different. For me that was rare, only a couple of jobs in more than 25 years, but it may happen and you must be prepared for such a situation.
In my next post I’ll share about those two jobs and how I resolved the situations and you can decide if that would work for you. In another post I will tell you some things to do to avoid such situations.
Woodworking Business 101: A Basic Business Guide For Woodworkers due to be published June 15th. Until then it is available at a special prepublication price of only $10 with free shipping in the Continental USA.
This new book is based entirely on first-hand experience of almost 30 years as a one-person woodworking business. Now you can learn all the valuable business lessons that will help you avoid the many costly mistakes made while starting a woodworking business. Order you copy now and save. Check out the web site at:
This book takes you from starting your business to helping you grow it to a profitable business.