Are you winging it with your money or do you know down to the penny how much is in your bank account today? Don’t know how much you’ve earned or spent? STOP fooling around.
If you are going to run a business there are a few simple money matters you need in place.
Listen: Are You Winging It With Your Money?
Watch: Are You Winging It With Your Money?
Hey there, I’m Angela Brown, and this is Ask a House Cleaner. This is a show where you get to ask a house cleaning question, and I get to help you find an answer. You can find this and 400 other answered questions in this series on our YouTube channel.
Are You Winging it With Your Finances?
Are you winging it with your business finances, or do you know exactly how much money you’re earning and how much money you’re spending?
We have a house cleaner that called in and asked this question. How do I budget my company? I don’t know how much I bring in, how much is going out, and what I’m profiting. Do I need a budget sheet or work spreadsheet?
Finances are a Big Mistake That House Cleaners Make
I love this question because one of the biggest mistakes that house cleaners make as they start their business is they come from a place of no money. Now that’s okay because that’s why we start a business to earn more money.
So there’s no shame in that whatsoever, but one of the biggest mistakes that I see is the house cleaners who are starting a business have this mentality where they say, since I’m not making any money yet, I’m going to focus my energies over here and not focus on the money part.
When I start making money, then I’ll figure it out. Okay. I need you to stop that mentality right now because it’s not going to serve you. What we have to look at right now is a lot of people get into the house cleaning business because in the past they have had debt. And so we’re going to get out of debt and we’re going to start earning money and we’re going to live a life of abundance.
Lots of People Have Feelings About Money
So lots of people have feelings about money. And when you ask the question, am I supposed to have a budget? I don’t know how much money I have coming in or how much I have going out.
That is fantastic that you recognize that because when you recognize it, that’s the first step to creating a plan. So yes, you do need a plan, but you also need some software. Now I’m not sponsoring this. This is not paid for in any way, but I want to share with you that there are a couple of apps that can make your life so much simpler.
One of the apps that we use, it’s a software program, it’s called SAS, which is a software as a service. You pay for it every single month. It’s called QuickBooks online.
QuickBooks Online is a Great Software
Now QuickBooks online is expensive for a startup business, but I want you to think of it as, what if you were going to hire a financial advisor that was going to come into your office and they were going to look over all of your books and they were going to help find everything that you’re spending and help find all the money that you have coming in and help put it all in the same place?
You would spend a fortune for that kind of person. Okay? So for a little bit of money, you get to pay for the software and you get a track at all at your leisure. And I say at your leisure, I want you to spend a few minutes a day digging into the QuickBooks online to set up your accounts.
Open a Business Bank Account First
What you do very first, even if you have no money, I want you to open a business bank account, and the business bank account is how you’re going to earn money and you’re going to start tracking it through your business account.
Okay, so you’re going to connect your business account to QuickBooks. And in the beginning, if you have not made any sales, there’s going to be no money, right? But there you have an account just waiting for the money to come in. Now, I want you to connect your credit cards.
You can connect your credit cards and your bank accounts and your clients. So every time you have money coming in, it’s going to show up in your account because it’s connected to your bank account.
You Can Tag Every Item in Your Business
So as soon as you spend money on a credit card, it’s going to suck it right into your account. Now what’s cool is you get to tag every item in your business. So let’s say that you spend some money on cleaning supplies as you’re starting your business, then you can tag your supplies as cleaning supplies, this is a business expense.
And so, when you go to pay your taxes at the end of the year and you have tax deductions, you get to offset the expenses that you had against the money that you had coming in. Now, how do you figure all that out, because it sounds super confusing?
The Software Makes it Easy to Tag Your Expenses
Well, the good news is the software is really smart and it knows how to do it for you. So once you start keeping track of expenses, every time you use that credit card to buy cleaning supplies, it’s going to tag this as cleaning supplies.
Then when you go to pay your taxes, it’s going to suck it right over into your Schedule C and it’s going to say, here are the cleaning supplies.
So in our business, we have smartphones, we have internet access, we have advertising, we have cleaning supplies, we have equipment which is like vacuums and things like that, that we’re going to actually buy.
Business Owners Have a Lot of Expenses
We have vehicle expenses, we have insurance for our business, we have uniform expenses. There are a lot of expenses that you have as a business owner, but until you start keeping track of them, you’re never going to know exactly how much money you’re spending.
And even if you have money coming in, there’s a tendency to say, “Well, I got some money today. We need more cleaning supplies for tomorrow’s job.” So you run out and you spend tomorrow’s job money and you didn’t actually ever record it.
It’s hard to track how much did I actually bring in and how much did I actually spend, because in the end there are only a few dollars left, right? So you want to make sure that you understand the big picture.
Finances are Important When You Start Out
So as you’re getting started as a small business owner, and this is awesome, and I want you to understand this concept. Even if there’s no money coming in right now, if you start this process right now, you can learn and read as much as you can about money.
Now I’ve put together a special playlist and it is a QuickBooks’ playlist and it walks you through every step of QuickBooks and it shows you how to get it up and running and how to make the most of it for your cleaning business.
It’s absolutely free to watch the playlist and I will leave links in the show notes to that. But I want you to get familiar with the concepts that it teaches because as your business starts to make money, it’s all going to start falling into place and it’s going to be super easy for you.
Lots of Cleaners Don’t Track Expenses
Here’s the problem house cleaners have. Lots of house cleaners don’t track their expenses upfront. And so as the money starts coming in, it gets overwhelming, then they get stressed out, and then their feeling about money change.
If money was easy to document, and it was easy to make, and it was easy to keep track of, and it was easy to spend, there’s this revolving door and it’s easy and it’s fun, but most people don’t feel that way about money.
Struggling With money Brings a Cloud of Anxiety
If you’re in debt and you’re struggling with money, there’s this huge cloud that hangs over your head, that is a cloud of anxiousness and anxiety and frustration, and the way that you feel about money is how it projects from you.
And so you go to make a sale with a customer and it comes off as desperation, and people are a little bit put off by that. And then we feel like, oh, well, because I felt so bad about money, then a customer says, “Oh, that’s too much for the price.” And you go, “Well, I’ll give you a discount then.” And you start negotiating your own prices, which then makes you feel even worse about money.
You Need to Track Money Starting Today
So if you feel fantastic about money and you start attracting money into your life, you feel differently about it, and it shows up differently in your job. So do you need to track money? Yes. Yes, yes, yes, yes. And you need to start today. Every penny that comes into your business, we want to track.
And every penny you spend, even if it’s a sandwich at Burger King, I want you to track it so that you know exactly down to the penny.
Track how much money you’re earning, because what happens is when money becomes a part of your life in a happy and organic way, you’re going to come to the realization that the more money you have, allows you to bless the lives of more people.
A Lot of House Cleaners Have the Wrong Thoughts About Money
And I want you to think about that, because a lot of house cleaners have this twisted mindset about money that they don’t deserve, or they shouldn’t be earning a lot of money, but we are people pleasers and we love to help people, right? You can help more people if you have more money.
And so I want you to start thinking in terms of money is good, money is kind, and money allows you to be the best version of yourself. So yes, you do need a plan and you need to start tracking it today.
Resources
These good karma links connect you to Amazon.com and affiliated sites that offer products or services that relate to today’s show. As an Amazon Associate, I earn from qualifying purchases. Your support pays our production costs to bring you these free daily tips. THANK YOU.
Rich Dad Poor Dad – https://amzn.to/3svYUhM
Reading Financial Reports For Dummies – https://amzn.to/3oZZRg8
Small Business Financial Management Kit For Dummies – https://amzn.to/38Mv5BV
QuickBooks 2021 For Dummies – https://amzn.to/3oOthxX
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