Subtitle

A personal look at the trails and triumphs of creating a business from the ground up; of starting a business selling what you create.

Monday, July 1, 2013

Business Math

After my second sale I finally realized that I was uncomfortable with my somewhat blase attitude toward how much I'm making and how much I'm charging. I tried to sit down and work it all out again but there were some things I just wasn't getting; like how to include labor costs for my time per hour and in what way could I document everything to see how much I need to sell to make a certain amount of profit.

Then I remembered that I have a business consultant. Brenda is awesome and a good friend. Up until recently we had only been meeting and discussing the more abstract portions of my business. But I quickly emailed her late one night asking for more practical assistance. I also sent her the excel sheets I had been working on.

Credit: Ken Teegardin on Flickr
Now I know math. I'm actually good at it, both complex and basic, even though I can't stand it. I have never felt that math was practical. Nothing that involves going on into infinity and has professors lying to you saying this is the rule one year and then telling you rules were made to be broken the next is straightforward. But maybe I'm more annoyed with my teachers then math itself. Anyway, I am also good with excel, which I've mostly taught myself. And business math, especially in excel is mostly basic math. My problem was that I didn't know what information to use, what formulas to plug in and in what way so that I could coherently get and then understand the outcomes I wanted.

Cue Brenda, the good witch, lol. We met and talked and she explained what it was I was looking to make and use in business terms. Which somewhat went over my head. And then, she came back with awesome excel sheets made up just for me. Now I know what cash flow is and how it looks in a chart. That it will help me figure or how much I need to sell to make a certain amount. I can play with it and adjust it for different scenarios.

She also helped me streamline a COGS, costs of goods sold, chart. I had made one but this one is easier on the eyes, plus I know what its called now. I've also got a sales and costs worksheet as well as an income statement. All four together will help me keep track of costs, sales, expenses and income for my business. It was all very helpful and will be for a long time. There's some relief knowing what I'm doing now because its written down in a way I can understand and remember. Thank you Brenda.

~Lashette
Scarlet Moon Creations

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