Believe it or not the end of August is here and we are eight months down for 2010. Next month estimated quarterly taxes are due and I find it a good time to review things and see how I'm doing. Some of you have more time into the "self-employment" path than I do but regardless it's never a wrong time to put on paper the goods, the bads and things that need to be changed so you can evaluate and make adjustments so the last quarter of the year produces improved results.
Of course have you been entering your transactions in either Quicken or Quick books or even a simple Excel spreadsheet? That is the question right? If you haven't now may be a good time to get started as you will have a difficult time getting a picture of how you are doing without the historical information on hand. However, as any self-employed individual will tell you..."I know (in their head they know) how I'm doing."
I've always loved that statement because to a great degree it is true. The person who wears all hats is the most hands on expression of the business. They know who their customers are, if they are asking for more services, if they are paying their bills and of course they know if the business is growing by virtue of how busy they are. Yet, the specifics of how they spend their money and what that amounts to or what percentage of their revenue is spent on certain things usually remains to be seen.
People I have had the pleasure working with who were self-employed or just wanted their finances tracked were always, without exception, surprised when the data was organized and put together and they could see, in black and white, where their money was going. It's quite a wake up call even if you believe you are the most knowledgeable about your finances.
So, take the opportunity now, before you pay your taxes or the end of the third quarter (9/30) to take the time to put your information together in a way that works for you. If you're not quite up to speed with Quick books or even Excel, just buy accounting paper and make your own financial statement. The good thing about this exercise is you will continue to learn about what you know and what you don't know about your business.
Remember, any questions can be easily answered if you take the time to think about them and don't be afraid to talk with others who are self-employed as they are struggling with the same issues as you. I've found it very interesting to walk into the local retail stores and if they aren't busy, talk with the managers and find out how they think things are going for their business. You'd be surprised how willing people are to talk about their perception of the economy and how their business has made changes to accommodate the economic challenges and keep business profitable. Sure, their business is different than yours but we are all challenged by these economic times and it never hurts to check in with other business people who live and work in the same world you do!