to Make a Profit Selling Homemade Crafts
Using a Recordkeeping System
is one aspect of being self-employed which seems to be universally dreaded,
recordkeeping. But it's important because keeping good records shows you
how to make a profit selling homemade crafts. Keeping up with your business
records is like craftswork. Only the grade may be more important now than
it was then. The grade is whether you have enough money to pay your bills
and feed your family.
key activity is to record and analyze your expenses and sales on a regular
basis. You should start keeping records from the day you start planning
your crafts business. Begin by gathering all business related receipts
and entering them into a software program like FileMaker Pro or writing
them down in a general accounting journal purchased at an office supply
store or on forms like those found in this chapter.
important point is to have a system you can follow up with regular entries.
You can then extract meaningful reports from the information. Since Uncle
Sam requires accurate records, you are legally responsible to do so anyway.
a Profit Selling Handmade Crafts:
Should you hire an accountant or C.P.A.?
most self-employed, the expense of hiring an in-house bookkeeper or accountant
can only be justified when the business becomes so large that the owner
canít handle it alone anymore.
you hire an accountant or not, you should know basic bookkeeping skills.
You donít have to have a degree or even formal training to learn accounting.
highly recommend Small
Time Operator, How to Start Your Own Business, Keep Your Books, Pay Taxes
& Stay Out of Trouble! by Bernard Kamoroff, C.P.A.. This
is a complete guide for anyone starting a small business. Covers everything
including permits and licenses, insurance, financing, leases, business
plans, bookkeeping, taxes, employees, partnerships, corporations, trademarks,
dealing with the IRS, and much more.
can also take a basic accounting class from your local community college
or continuing education program.
Small Business Development Centers or SBDCís sometimes offer courses
and many provide free counseling.
are several basic kinds of records you to keep up with. Here are the ones
you are most likely to need. You will find these forms and more details
on how best to use them in How to Price
Crafts and Things You Make to Sell:
Assets or Depreciation
Travel & Entertainment Log
you havenít already opened a separate checking account for your business,
you should do so. You can easily confuse business and personal transactions
if they are both present in your personal checking account. When tax time
rolls around, youíll be grateful you kept your business records separate.
records can be done by hand on paper or by entering information into a
computer. If you are just beginning your business and have no experience
with personal computers, you may find it simpler to keep records on paper. An
excellent guide is Keeping
the Books: Basic Recordkeeping and Accounting for the Small Business,
Plus Up-To-Date Tax Information (4th Edition), by Linda Pinson,
may also want a plastic filing box or metal filing cabinet to separate
and store all your records.
example, one divider will say "Rent" and contain rental receipts.
Another divider might read "Cost of Materials" and include records
of your purchases.
paper recordkeeping system will work well until you reach a point when
increased sales take too much time to record entries by hand. At this
point, using a computer will become more cost effective.
will know that time is near when you find yourself spending more time
than you can afford to spend looking up records, writing invoices, or
trying to do a cash flow projection or balance report on the financial
state of your company.
signal will be when you want to mail new product information or announcement
of a special sale to 200 customers and you have to copy their names and
addresses by hand.
are many computer software programs to help small business owners manage
their records. Most are sophisticated enough to give you in-depth reports
on all aspects of your business in seconds.
by Intuit is recommended by the Small Business Administration and the
program used by this author. QuickBooks is very easy to
setup and customize for how to make a profit selling homemade crafts.
James Dillehay, author of seven books, is a nationally recognized expert
on marketing arts and crafts. Artist, entrepreneur, and educator, his
articles have helped over 15,000,000 readers of Family Circle, The Crafts
Report, Better Homes & Gardens, Sunshine Artist, Ceramics Monthly,
and more. James has appeared as a featured guest on HGTV's popular The
Carol Duvall Show and he is a member of the advisory board to The National
Craft Association. This article is copyrighted and excerpted from James
Dillehay's How to Price Crafts and
Things You Make to Sell
"An excellent resource
. . . a well organized book is nothing without solid information and the
book delivers here." --
The Crafts Report
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