February’s #OWSchat: Finance & Taxes with Carrie Smith

It's officially tax season, which means we're bringing financial blogger and money maverick Carrie Smith of Careful Cents on as our guest expert during our February #OWSchat.

Join us this Wednesday, February 4 at 9pm EST for a fast-paced hour of all things solopreneur finances and taxes. 

PS – First ever Twitter chat? We highly recommend using a platform like TweetChat to make it easy on you!

Solopreneur Finance E-Course is Here!

Solopreneur Finance e-courseLet’s face it: we jump into our side hustles and solopreneur endeavors because we’re ridiculously passionate about something and want to spend our days doing it. Oftentimes, that something doesn’t include the logistics like keeping the books, invoicing clients, paying estimated taxes -- you know, the fun stuff.

Well, luckily, that stuff IS fun for some people -- and Carrie Smith of Careful Cents happens to be one of them! That’s why we couldn’t think of a better expert to collaborate with to produce a course for the One Woman Shop community on finance for solopreneurs.

Solopreneur Finance: Managing Money On Your Own Terms is a 12-week, virtual course that we've designed for you via CourseCraft.

Throughout the course, you’re going to get your questions answered when it comes to:

  • How to break the status quo and make money "rules" that work for you
  • How to best set up your business in terms of legal designations and what that means for your financials
  • The key elements of DIY finance
  • How to hire a bookkeeper if and when the time comes
  • What systems you should have in place before growing your business
  • When it's time to pay taxes, and how to go about it

...and that's not even the half of it. We went to great lengths to cover the topics that will most benefit One Woman Shops from day one to day 1,000, and well beyond.

This course is all about you - how to manage your money, while balancing many other aspects of your solopreneur business -- on your own terms. It’s about finding the “rules” that fit your business.

Most importantly, by taking in the material and completing each week’s action, you’ll come out with the confidence to own your finances as a solopreneur -- just in time for that dreaded tax season!

Here’s how you get it:

The course is free to One Woman Shop members -- and your access begins today! Simply visit the course page, click “Enroll,” and put in the code that was emailed to you today.

Not a One Woman Shop member yet? Click here to apply for membership, or visit the course page and enroll via Careful Cents for $77! Use the code OWS10 at checkout to get 10% off.

Questions? Shoot us an email. It’s time to own your finances, solopreneurs!

3 Ways Entrepreneurs Can Create Passive Income

As solo business owners, we often feel like there are only two ways for us to make money:

  1. Raise prices
  2. Work more hours

And since most of us can’t charge whatever the heck we want for our products or services, we get stuck in a cycle of working long hours just to give ourselves a raise.

But trading time for money is never going to work to our advantage. The solution? Passive income.

Passive income is anything you can do to make money while you sleep: you put the time in upfront, and your revenue accumulates indefinitely. Here are three ideas for earning passive income no matter what industry you’re in.

1. Sell information products

You see this one happening a lot in the entrepreneur world. We’re talking ebooks, behind-the-scenes guides, cheat sheets, knitting patterns, cookbooks, etc. At first glance, it may not seem profitable. After all, you have to go through all the work of creating the product, which takes time and money.

The trick is to use knowledge that’s so familiar to you, compiling it into a product will hardly feel like work at all. Then you need to price your product so that you can reasonably recoup your costs within a month. After that, it’s all profit!

Ask yourself these questions for ideas:

  • What knowledge do I have that others value?
  • What have I succeeded at that has others wondering what my secret is?
  • What behind-the-scenes process could I let people in on—for a price?

With a little brainstorming, any entrepreneur can develop an information product that will be hard at work earning money while you sip margaritas on the beach.

2. Create an online course

Some online courses require you to be available to facilitate live groups, events, or Q&A webinars, but others are set up to run themselves.

For example, you could use MailChimp, Aweber, or CourseCraft to create an automatic email course (editor's note: like this 16 week productivity e-course!). Your customer pays via PayPal and your email service kicks in with a series of timed auto-responders to deliver them your pre-written content each day, week, etc.

Getting your email lists set up might take a bit of time, but the initial costs to create an e-course are pretty low. Depending on your list size, email service will cost as little as $10 - $20 per month!

Many of the same ideas you thought of for information products can be created as an online course if that’s more appealing to you. Bonus: most people are more willing to pay a premium price for an e-course—even if it includes the exact same info you would have included in an ebook!

3. Run a membership site

Sites like Hope*ologie, The Influence Network, and our very own One Woman Shop are an awesome way to keep money steadily flowing in. With this model, you create a private website that’s only available to subscribers. For a monthly fee, your customers get access to whatever resources, webinars, or community groups you post to the site!

Membership sites require plenty of maintenance and have a higher startup cost, but the reward is loyal subscribers who automatically hand you their hard-earned cash every month. Because customers are forking over a fair amount of dough, you’ll need to make sure you keep your site well-stocked with new goodies each month so they get a reasonable value.

If you’ve got the wherewithal to plan ahead and create amazing resources each month, the profit you’ll see rolling in will more than make up for your efforts!

What are your favorite ways to earn passive income?

5 Ways to Make Tax Time Less Painful

Ugh. How the heck is it time to do taxes AGAIN? Didn't we just do this crap last year?

Well, this year I have some tips to help you punch those taxes in their stupid face so you can get back to doing what you do best--actually running your business! Some of these are applicable this year, and some of them you need to start doing to make your taxes next year even easier!

Use good accounting software

Seriously, this is the #1 thing you need to start doing to make your taxes less of a pain in your behind. Whether you choose GoDaddy Bookkeeping, Freshbooks, Wave, or something else, you need to keep track of your money!

Why is this better than an Excel spreadsheet?

Because these programs pull your info from your bank accounts, Paypal, Etsy, credit card, and more and help you organize it all! No running home from the store and typing things in a spreadsheet before you forget, it's already there in your accounting software!

Take your organizing online

Even with your accounting software, you're likely going to end up with paper receipts--and you don't wanna toss them because what if you still NEED them? And what about all those online receipts? What the heck do you do with those?

Enter: Shoeboxed.

I actually just found out about this service, but holy cow is it awesome! You can store all your receipts online--no more disorganized folders stuffed with random receipts or saving emailed receipts in your Gmail--you can scan, clip, email, or even snail mail your receipts into Shoeboxed! And yes, the IRS will accept this in case you ever are actually audited!

Use DIY tax software

If you're using a bookkeeping service like Freshbooks or GoDaddy Bookkeeping, your income and expenses are already organized--you just need to plug the numbers into something like TurboTax. I don't know why you'd file any other way when Turbo Tax and H&R Block at Home make it so easy! Just answer a few simple questions, plug in some numbers, and ta-da! You're done!

Hire someone

Look, sometimes it's better NOT to DIY. Maybe you're too busy, maybe you don't know where to start, maybe even TurboTax can't handle the crazy you're throwing at it this year- why not let someone else file those taxes for you?

It's not the cheapest option, but you'll know they've been done correctly and you can get back to more important things. Like Netflix.

I've heard great things about Amy Kerr CPA and Sweeter CPA- check these ladies out and see if they can make your tax filing worries disappear!

Get to it

Stop putting your taxes off- it's getting close to April 15- I know, I know, you still have a month. But waiting until the last minute is asking for trouble! Carve out some time THIS coming week to at least get started on your taxes--trust me, doing them the night before they're due is no fun.

How're you punching your taxes in the face this year? Let us know in the comments!

Disclosure: This post contains affiliate links. One Woman Shop may receive a commission on sales purchased through the links above. We only include products and services that we think you will find useful. 

9 Little Ways to Find and Save Money Today

For some solo business owners, this time of year is super profitable, with money streaming in from Black Friday sales, Cyber Monday sales, and all other holiday sales. For others, it's a slow period that can cause quite a bit of worry and stress.

Maybe it's a slow time in your small business. You've completed your client work and shipped your products but the money has temporarily stopped rolling in and you're not feeling particularly comfortable with the amount of money in your bank account.

First, make note of these things to do when business is slow. Then, get cracking on these 9 ways to find and save money in your business- today.

Redeem your credit card points: If you're not collecting points on all of your credit card purchases, sign up for your card's program ASAP. If you're already racking up the points, take a few minutes to redeem them- again, choose something practical that you can use for yourself, your contractors, or your clients, like $5 Starbucks gift cards.

Sign up for frequent flyer programs: Do you do a fair amount of personal and business travel throughout the year? Sign up for the frequent flyer program of every single airline you use then be sure to register your miles if you book your flight through a third party, like Expedia. We're embarrassed to admit how many miles we've let go to waste over the years because of our laziness!

Cut or renegotiate monthly costs: Print out your recent bank statements and take a highlighter to recurring charges. Do you find that your internet bill seems to be increasing every month or you no longer need such an extensive insurance policy? Cancel your service or call and ask for a price adjustment (hint: threatening to cancel your service and go with a competitor can be really effective if done wisely. Ask for the customer retention department if they're not budging on the price).

Donate to Goodwill: Your old printer, your clothes that no longer fit, and your Mary Kate and Ashley VHS movies? Take them to Goodwill, ask for a receipt, and file it away for tax time.

Sell your clothing: Want a more immediate addition to your bank account? Stores like Plato's Closet and Uptown Cheapskate, which buy your clothes on the spot, are popping up around the country. Find one, drag in your old clothing items, and relish the

Return items: Raise your hand if you have a bag from Marshall's or TJ Maxx sitting in your trunk- we do! Take a few minutes to return it and savor the sweet feeling of a $20 gift card burning a hole in your wallet.

Deposit a check or transfer your money from PayPal to your bank account: Okay, technically, this money is already yours. But give yourself a little boost in morale by visualizing all of your money in one place.

Follow up on an invoice: Again, you've earned this money, but it only counts if it's in your bank account. The longer you wait to collect on unpaid invoices, the harder it becomes, so spend a few minutes sending personalized follow up emails or making phone calls today. P.S. Clients not paying up? It may be time to dump them!

Turn your coins into gift cards: Have a huge coin jar tucked away? Take it to a nearby Coinstar machine and turn it into something practical (like an Amazon gift card) or a special little treat (like an iTunes gift card). Credit unions and some banks usually offer free access to coins-to-cash machines, so check in with yours!

Business Record Keeping

So you’ve started a business. And holy shit, you’re actually making some money! You get on with your bad self, girl! The one possible downside however, is that now you have to start, you know, keeping track of all that mad cash you're bringing in. Organizing your business records, keeping your receipts, and *shudder* filing a tax return - crazy, right?

But never fear- I’ll give you all the basics you need to know right here. A love of order and office supplies is a plus, but certainly not a requirement.

Separate Your Business and Personal Finances

Repeat after me, kids: “My personal and business finances are separate. My personal and business finances are separate. My personal and business finances are separate.”  That is your new mantra – hold it near and dear to your heart. It’s pretty much the First Commandment of record keeping.

Separate and distinct personal and business accounts are essential. Just do it. You’ll thank me later.

You don’t need to make a big production out of this, don’t worry! You don’t need an “official” business checking account, or a credit card in your business’s name. In fact, if your business is young, it will be pretty near impossible to get a credit card in your business’s name. Don’t worry about it. Just open a new personal checking account where you already do your banking and transfer some “seed” money into it. All business transactions will now take place from this checking account, not your personal one.

The same idea goes for a credit card. Simply apply for a new credit card under your own name. CreditCards.com is a good place to look for cards with no fees and maximum rewards, whether you are looking for travel miles, points, or cash back.

And don’t forget about PayPal. If you’re accepting payments or making business purchases through PayPal (or another credit card processor), open an account just for your business. You don’t need the transaction for your eBay purchase of new shoes next to the invoice for your latest client.

Track Your Income and Expenses

Otherwise known as: bookkeeping! Learn to love it, kids – whether you do it yourself or outsource it to a bookkeeper, keeping accurate records is essential. How else will you know when you’ve hit your target sales goals or cross that six figure line?

Bookkeeping, especially if you have a relatively simple service based business (ex: coaching, consulting, etc), doesn't have to be complicated or scary. User friendly, almost dummy-proof software is available for little or no cost. They all import transactions directly from your bank, credit card, and PayPal. Some will even sync with your invoicing and time tracking software.

Here’s a list of my favorite bookkeeping software:

  • WaveApps: Free!
  • OutRight: Super user-friendly
  • Kashoo
  • QuickBooks: Both desktop and cloud versions available. Might be overkill, but consider it if your business requires you to keep an inventory of physical products

Expenses: Keep Your Receipts

Here’s a pretty good rule of thumb when it comes to business expenses: if you don’t have a receipt for it, it didn’t happen. I know it sounds harsh, but it’s true. If you can’t prove to the IRS that you actually shelled out cash for an expense you claimed on your tax return, well, you’re pretty much SOL. So, as annoying as it is, you've gotta keep all those little Starbucks receipts from when you had coffee with a client, and all the parking garage receipts from when you left your car at the airport for a business trip. Here’s a few hints to make this a bit easier for yourself come tax time:

  • Paper receipts: write a keyword at the top for what the purchase or expense was for. If you took a client out for dinner, write their name on the receipt. If you bought printer paper at Walmart, write “Office supplies” on the receipt. Then, toss the receipt in a file folder (more details on the file folders in a minute!), and you’re good to go!
  • Virtual receipts (AKA: order confirmations, electronic bank statements, etc): Save a PDF of the confirmation in your “Bookkeeping” file folder on your computer. Back that sucker up. Back it up again.
  • Car Mileage: Here’s a great tip, from me to you: if you use your car for business purposes (driving to see clients, to conferences, to pick up supplies, etc), keep track of that mileage – it’s all deductible! The easiest way to do this is to throw a pocket calendar in your glove compartment, and whenever you drive somewhere for business, make a note of that mileage in your calendar. When tax time comes, voila – a perfect record of your business mileage for the year!

Organizing and Filing

Ahh, this is my favorite part! I’m not kidding. I love setting up file folders with lovely typed labels, and putting everything in order. It’s a little thing I can control in this crazy world.

Don’t worry – I’m not going to make this complicated or expensive. All you need are 12 file folders. I personally like pretty colored ones, but plain manila ones are acceptable as well. Here’s what you do:

  • Label the 12 file folders with the months of the year: Jan, Feb, etc. Create the same folders virtually on your computer nested in a bookkeeping folder.
  • Put anything bookkeeping or tax related you get during any given month into that month’s folder. Things that would go in the folders would be: receipts (that you’ve written a keyword on, as suggested above, of course!), statements from credit cards, checking accounts, cell phones, etc, and deposit slips (if you have an old fashioned business where people pay you in cash or checks)
  • At the end of the year, after you’ve filed your taxes, bundle all the folders up into an Archive file or box, and tuck them away. Do NOT destroy your records yet!
  • Buy 12 more folders, label with the months of the year. Lather, rinse, repeat.
  • I repeat: do NOT destroy last year’s records! In some circumstances, the IRS has up to 7 years to go back and audit you and your business, so keep those archive boxes for a full 7 years! After the 7 years has passed, you are free to shred, burn, or compost your records.

And there it is! See – I told you record keeping wasn’t so bad. Keep your business and personal finances separate, invest in some easy-to-use bookkeeping software, keep your receipts, and have a simple organization system. That’s all you need. Now step away from the file folders and get on with rocking your biz!

Do you have a system for handling your business finances?

P.S. Want to show others how easy business record keeping can be? Tell them on Twitter!