I'm rubbish at running my own business

[notmywords]

I feel like a complete idiot.

I just gone through my year end figures and, although my turnover looks OK, my profit is really not very good. I've hardly earned anywhere near the money I need (which is my turnover really).

I really haven't paid attention to the finances and my credit card bills have gone up and up - I think because I spend like I'm earning my turnover not my profit. I've buried my head over the whole thing.

I'm convinced I'm under charging. I've just taken someone on to help me as I actually have too much work, but I'm not earning anywhere near enough. I feel like I've worked my arse off for the last year with no much to show for it.

How do I get my finances under control. I don't even know where to start.

I've just had a little cry.

I hear you. I haven't actually kept proper accounts this year despite me promising myself I would. And now we are in June...

What is your business? What do your competitors charge?

What type of business is it?

I own my own business and the way I work the finances is really simple:

1. I don't have a company credit card or any loans.
2. I invoice immediately I've finished the work (I'm a will writer)
3. If the client is faffing about, I bill for the work done to date within 28 days
4. If they don't pay on time I remind them very soon after the due date
5. When they do pay, the first thing I do is stick 20% into a savings account to pay the tax at year end
6. All money in and out, no matter how tiny, goes on a spread sheet and I keep the income and outgoings updated once a week so I always know exactly where I am.

Have you been putting 20% of all income into a tax account? (I realise you don't need quite as much as that, it is only payable on gross profits, but I like to have some wiggle room for things like accountants fees or particularly expensive months.

Also are you claiming mileage at 45p per mile, and for all other expenses?

Oh well you have realised now and you can start doing something about it. I don't know what work you do but have a look at the following :-

1. Work out how much you actually need to earn - after tax and expenses - then work backwards

1. Are there any expenses you can cut back?

1. Get an accounts package so that you can do your books every month and see exactly where you are

1. Make sure you put your tax money away in a separate account

1. Are you actually able to earn enough doing what you are doing, in the time you have available?

x

Marketing consultancy. I have quite high costs though in terms of software subscriptions etc. Competitors charge anywhere between much lower than me and much much more for big agencies. I'm assuming that's because they've got their costs nailed down!

I also think I don't manage to squeeze enough billable hours into my working day!

Start with the take home pay you need

Add tax, add expenses, this will give you what you need to earn gross

You then need to divide this by your hourly / daily rate to work out how many hours you need to be working

Is all of the software essential? Is any of it rechargeable?

I need to do a review of what I''m paying for - I could definitely lose some of it I think. Or recharge it at least.

I'm taking on people to do some of the work for me. I need to make sure I'm making a profit on them, and it's not just their wages plus costs.

Yes and don't forget payroll costs, employers national insurance, possible pension you will have to pay, sick pay, etc

Yes - at the moment they are freelancers on contract but eventually hopefully they will be staff. Presumably I need to add that into my costs now don't I.

I think I need someone to sit down with me and help me work it all out.

Do you have an accountant?

I would be happy to help if you PM me x

I'm taking on people to do some of the work for me. I need to make sure I'm making a profit on them, and it's not just their wages plus costs.

Yes, you need to add on a proportion of general overheads and also your time spent in recruiting, supervising and managing them & their work. I suspect you aren't properly appreciating the time you're spending and that's where you're losing part of your working day and hence personal billing time.

Thanks everyone. Brit I'll DM you.

No I'm not allocating enough time to projects and therefore costs.

I never have enough time to get everything done