How do you pay yourself? Accounting tips?

[JoeCamaro 11]

I have been doing decals and t shirts for a while now and I have been making some money with it. The thing is that I dont know how to effectively handle money. I mean, Im not wasting it on useless stuff or in beers. The thing is that I see I work a lot and I dont see the $$$. I keep on buying materials and materials and materials but I realized I am not paying myself for all my work.

How do you guys and girls pay yourselves? How do you handle your money? Can anyone give me tips on how to keep some basic accounting?

What I have been doing is from everything I make I take 50% and put it in an account to get materials and the other 50% I put it in my savings account, but I dont see the account grow at all, but I can see the amount of work growing. There must be something wrong. Maybe Im too cheap. I dont know.

How do you do it?

Joe

[haumana 1,220]

I'm curious to know too ....

[BannerJohn 1,324]

I put everything I make back into materials. My shop looks like a sign supply place. I keep back enough to pay the bills and have the occasional piece of cheesecake. You pay taxes on the profit. AS long as you put enough back into the business, you don't pay much in taxes.

[JoeCamaro 11]

Ta... ta.. tax es.. taxes? whats that?

j/k

[haumana 1,220]

Ta... ta.. tax es.. taxes? whats that?

j/k

Hahahahaha. I was thinking the same thing. Hehehehe.

[BannerJohn 1,324]

I know exactly how much I can make before I have to pay taxes on it.

[latitude42 5]

Be careful.... you can get taxed on inventory!!!!

If you are making enough to get taxed...incorporate. The TAX savings are huge!!! Oh and get a good accountant (Jewish if you can).

Larry C

[firemalt 10]

Joe, I would recommend adjusting your percentages... maybe 60 to savings, and 40 back to the business, or even 70/30. The great thing about having a vinyl business is that the overhead is fairly low compared to other businesses.

On bigger jobs, I will typically figure my material costs into the price of the job, so nothing is out of pocket, and it's all pure profit other than my time.

[cutme 5]

vinyl is just a hobby for me. i hope to make a little money with it though. i make most of my living from turning boards into sawdust, but something beautifull usually rises from the dust in the end. http://blessinghomes.net/page6/page6.html

bb

[haumana 1,220]

vinyl is just a hobby for me. i hope to make a little money with it though. i make most of my living from turning boards into sawdust, but something beautifull usually rises from the dust in the end. http://blessinghomes.net/page6/page6.html

bb

Dude (BB) - That is sooo awesome. Why can't you be a contractor in Hawaii? I'm going to be looking for someone to redo the upstairs bathroom, possibly the downstairs bathroom, and to build a deck / carport underneath the deck at the new house we're going to. Any chance you have friends or family in the trade that do great work like you that live here?

simply awesome.

[JoeCamaro 11]

Thank you firemalt. I will start doing that 60/40 or 70/30.

Anymore tips anyone?

[nonabelle 5]

I have been doing decals and t shirts for a while now and I have been making some money with it. The thing is that I dont know how to effectively handle money. I mean, Im not wasting it on useless stuff or in beers. The thing is that I see I work a lot and I dont see the $$$. I keep on buying materials and materials and materials but I realized I am not paying myself for all my work.

How do you guys and girls pay yourselves? How do you handle your money? Can anyone give me tips on how to keep some basic accounting?

What I have been doing is from everything I make I take 50% and put it in an account to get materials and the other 50% I put it in my savings account, but I dont see the account grow at all, but I can see the amount of work growing. There must be something wrong. Maybe Im too cheap. I dont know.

How do you do it?

hey joe, the way i do it is, first i double the cost on my apparel; and take half, then on the material well that's tricky, but most of the time i double or triple it just depends on the order and quantity. for instance i had a customer purchase for shirts, the shirts my cost was 14.00. doubled that her cost was 28.00 blank. then i tripled the cost to do her supplied design 8x8 easy to weed. front print, then she added a nape print on back which is another location 2x2 that was 4.00 each. i at least double but a lot of jobs u can triple and make a little more without hurting ur price point. if i know a job is going to take some time to weed like the basketball goal or the tiger ripping that i have on my pics in :show ur work i'll add a little more to the price. it really just depends. 60/40 or 65/35  iis good thought. i don't purchase material, the customers does and what i have left is profit on the next order. make any sense. ps. any job that i perform in any category of my business is mark up at least 2.5 of the cost, period.

Joe

[Benr98 40]

Well I wish I could give you some advice, but right now I'm in the same boat!!  I'll be watching this though for more advice.

Jenny

[nonabelle 5]

I have been doing decals and t shirts for a while now and I have been making some money with it. The thing is that I dont know how to effectively handle money. I mean, Im not wasting it on useless stuff or in beers. The thing is that I see I work a lot and I dont see the $$$. I keep on buying materials and materials and materials but I realized I am not paying myself for all my work.

How do you guys and girls pay yourselves? How do you handle your money? Can anyone give me tips on how to keep some basic accounting?

What I have been doing is from everything I make I take 50% and put it in an account to get materials and the other 50% I put it in my savings account, but I dont see the account grow at all, but I can see the amount of work growing. There must be something wrong. Maybe Im too cheap. I dont know.

How do you do it?

hey joe, the way i do it is, first i double the cost on my apparel; and take half, then on the material well that's tricky, but most of the time i double or triple it just depends on the order and quantity. for instance i had a customer purchase for shirts, the shirts my cost was 14.00. doubled that her cost was 28.00 blank. then i tripled the cost to do her supplied design 8x8 easy to weed. front print, then she added a nape print on back which is another location 2x2 that was 4.00 each. i at least double but a lot of jobs u can triple and make a little more without hurting ur price point. if i know a job is going to take some time to weed like the basketball goal or the tiger ripping that i have on my pics in :show ur work i'll add a little more to the price. it really just depends. 60/40 or 65/35  iis good thought. i don't purchase material, the customers does and what i have left is profit on the next order. make any sense. ps. any job that i perform in any category of my business is mark up at least 2.5 of the cost, period. the 14.00 bucks was for one shirt, she ordered 4 of them. hope this makes sense to ya

[laserman70 2]

My primary business is repairing laser printers, selling consumables and doing warranty work for HP.  My company is setup as a S corporation.  Incorporating isnt that expensive, it protects you and everything you own.  If something happens your personal things are protected. You are considered an employee of the company. 

I pay myself like any other employee, I get a paycheck every week.  I give myself bonus checks when the business is very busy. Every vehicle i have is a right off, everything i do is a right off, goto dinner, keep a receipt, all tolls on the road, whatever you can save, from your home to your car.

Figure your overall margin, taking into account all overhead, and include all overhead.  Be honest what it really cost you to do a shirt, or a vinyl decal.  Factor in your time, what are you worth? You can always pay yourself weekly and take a bonus when it is good.  Make sure you put a percentage aside for taxes, pay them quarterly, that way at the end of the year you dont have to pay a huge chunk of money out. 

I have been in  business for myself for 8 years, It has a lot of headaches at times.  You are the one at the end of the day, if the business isnt doing well, you dont get paid.  But when its doing great YAHOOOOOOOOOOOO show me the money. 

Just my .02 hope it helps. 

[Benr98 40]

Laserman, you have given some wonderful advice and definitely something to be thinking about!!

Thank you.

Jenny

[cutme 5]

sorry joe, i don't mean to hijack your thread. haumana; i wish i had a place in hawaii. we were on the big island last april for ten days, it was total bliss! thanks for the kudos !

bb

vinyl is just a hobby for me. i hope to make a little money with it though. i make most of my living from turning boards into sawdust, but something beautifull usually rises from the dust in the end. http://blessinghomes.net/page6/page6.html

bb

Dude (BB) - That is sooo awesome. Why can't you be a contractor in Hawaii? I'm going to be looking for someone to redo the upstairs bathroom, possibly the downstairs bathroom, and to build a deck / carport underneath the deck at the new house we're going to. Any chance you have friends or family in the trade that do great work like you that live here?

simply awesome.

[BannerJohn 1,324]

Be careful.... you can get taxed on inventory!!!!

If you are making enough to get taxed...incorporate. The TAX savings are huge!!! Oh and get a good accountant (Jewish if you can).

Larry C

around here there is only a tax on personal property...and with depreciation,well,it's not very much. No tax on inventory...yet.

any advice on how to do the LLC thing?

[Guest fivestar]

Pay?  You mean you're supposed to get paid for doing this?    I don't have mine set up as a corporation so I get hammered on self employment taxes.  I really need to incorporate it.

My wife takes a paycheck from our flower shop just as she would pay an employee, but I simply "throw" all my money from my business into another bank account and take money as I need it (if it's there to take )

[rebjr 0]

To incorporate or not to incorporate, that is NOT the question. I was incorporated once, and I'll never do that again, it works for the rich but for the average small businessman it does no good at all.

First, you end up being double taxed. The corporation has to pay taxes on income/profit. You can cut your personal income by leaving it in the corporation, and pay corporate taxes on it. Trading good money after bad in most cases. Then when you decide to take it out, and pay yourself .. woooppppssssss ... income taxes again.

Not to mention the reports that are required to be filed, tons of them, in addition to the normal IRS stuff. And, if you fail to file them, or mess up, there can be huge fines associated.

Most states smoke corporations pretty heavily. Some are lenient and give great breaks, or so I am told.

Used to be that you could get protection from lawsuits by being incorporated, or having a limited libaility corporation. That still holds true in some cases of civil suits, but suppliers have begun to demand personal guarantees due to the number of folks who have dumped a corporation in bankruptcy and walked away with tons of loot. And, consumers have gotten smarter as well and most suits name every stinkin' person employed in any management capacity in the corporation.

All of this rant holds true for private ownership as well, all that is except double taxation.

The need for a good accountant is paramount.

Back to Joe's original question. Back when I had employees and an EIN I paid myself an hourly wage, 40 hours a week. At the end of each quarter my accountant told me how much we had made (or lost) and I handed out bonuses to myself and to those employees who deserved one.

I take it, Joe, that you are employed as a graphic designer and doing the vinyl thing on the side, be I correct?

If so, your 50/50 split seems to be the ticket. But, you say the savings account isn't growing? How about your stock? If one isn't growing, I doubt the other is either. If you are just paying for your material, and only managing to replace what you have used you need to increase prices in order to affect any growth and personal gain.

Many folks, particularly if they have another income, tend to calculate their potential profits way too low. You can't figure making, lets say $25 an hour as reasonable income. You need to gauge somewhere in the $50 (at a minimum) an hour range from the beginning. As you grow you will need to add space, add employees, add more equipment, stock, utilities, etc., etc.. If you start out with pricing that will allow you to do that when the time comes you won't have to fight your customers on down the line to get them to come off with the extra duckies.

[Guest fivestar]

good post rebjr, Those are the reasons I have not incorporated, I have heard them same things from a few different people.  As for the hourly rate, I, myself charge $45.00 per hr for my vinyl design work and as I like to call it on my computer repair side, tech level 1, now on tech level 2 I charge $70.00 per hr.  basically if it's personal computer work then it's tech level 1, business and government is level 2. 

[JoeCamaro 11]

Thanx rebjr that was very interesting    You rock!

[Dellrose Custom Lighting 0]

This is some good info.

Here is a little bit of ihistory about my business. As you might can tell from my user name (Dellrose Custom Lighting), about 2 years ago I started out selling and installing emergency lights and related equipment for emergency vehicles. But to be able to get any business from some of the local agencies, I have to keep my prices at or below what the other local companies are charging for the same item or service. I have one customer than started buying from me, and then after I had done installs on a few vehicles the top people said that anybody that did work for them had to have insurance. Well, long story short, I have just about lost that account, and had about $300 worth of lights that I could not sell them, because I cant afford to pay $200+/- per month and only bring in about $400+/- gross per month. At the rate I am going right now, I am making just barley enough to pay what bills I have which is one reason I started doing the vinyl graphics. In the next couple of weeks I will probably place an ad in the local paper to see if I might can get a little extra business. For the most part, I have paying myself with an extra light or two whenever I actually sell enough at one time. Good Lord willing, this summer I am going to setup at some of the local tractor show and see how good I can do like that.

Well, I feel a little bit better getting that of my chest. I appreciate everyone listening to my rant.

[BannerJohn 1,324]

This is some good info.

Here is a little bit of ihistory about my business. As you might can tell from my user name (Dellrose Custom Lighting), about 2 years ago I started out selling and installing emergency lights and related equipment for emergency vehicles. But to be able to get any business from some of the local agencies, I have to keep my prices at or below what the other local companies are charging for the same item or service. I have one customer than started buying from me, and then after I had done installs on a few vehicles the top people said that anybody that did work for them had to have insurance. Well, long story short, I have just about lost that account, and had about $300 worth of lights that I could not sell them, because I cant afford to pay $200+/- per month and only bring in about $400+/- gross per month. At the rate I am going right now, I am making just barley enough to pay what bills I have which is one reason I started doing the vinyl graphics. In the next couple of weeks I will probably place an ad in the local paper to see if I might can get a little extra business. For the most part, I have paying myself with an extra light or two whenever I actually sell enough at one time. Good Lord willing, this summer I am going to setup at some of the local tractor show and see how good I can do like that.

Well, I feel a little bit better getting that of my chest. I appreciate everyone listening to my rant.

what kind of insurance? My brother carries  a million dollar liability insurance on his concession biz...the premium I think is about $300 a year.

[Dellrose Custom Lighting 0]

The quote was for about $100k liability. I was only able to actually get one company to give me a quote, because they said that the type of stuff that I was doing was high risk. Every company that I talked to pretty much told me NO as soon as I told them what kind of business I had.