Bookkeeping is About More Than Just Numbers
It Lets You Look Into The Soul of Your Business
A lot of business owners think of their bookkeeping as a necessary evil. Something they do so they don’t get in trouble with the IRS. But ya’ll, it can be SO MUCH MORE than that. When you keep on top of it, your numbers can act as a mirror and help sure you’re running an ethical, restorative, equitable business.
There are four main lenses we can look at your business through. Let’s dive in.
1. SELF
IS YOUR BUSINESS MEETING (AND HOPEFULLY SURPASSING!) YOUR NEEDS AS A HUMAN?
I’m going to go (not very far) out on a limb and say that one thing we can all agree on is acknowledging our shared humanity and that we should all be able to have our needs met. In this day and age, we meet a lot of our needs (you know, money for food, clothing, shelter, etc.) by making money. The amount we need varies and depends on things like location, family size, hobbies, goals, dreams, etc. Around these parts, the amount you need is called an income goal.
Your financials show you if you’re charging enough to reach your income goals.
If you’re working full tilt, have a full client roster, and still aren’t reaching your income goals? Something needs to change. Your prices need to go up, your expenses need to go down, or you need to figure out how to alter space-time in order to add more hours to the day. Given that option 3 just isn’t feasible right now, I’d personally recommend option one or two. And if I may, a quick reminder: you usually can’t budget your way to higher income. You’re gonna need to raise your prices.
Next, while money is great, it’s not everything and doesn’t meet all our needs. We need other things, like time off, to play to our strengths, and do work we enjoy.
Take a look at the services and products that make up your income. Are they a good fit for where you are now and what you envision for the future of your business?
Do you enjoy making the products you sell and providing the services you offer? For example: Maybe you’ve jumped on the “create a course” bandwagon and it’s bringing in decent money. But remember, there are other things to consider than just how much money an offering is bringing in. Such as:
How much time does it take to market it? Are you having to devote large amounts of time writing launch sequences and working with affiliates?
How much does it cost to run it (software platforms, community managers, guest teachers, etc)?
If you’re enjoying the offering and the ratio of income to expense/time/etc works for you, awesome! Sounds like it’s a great fit. If not, now might be a good time to re-evaluate.
Do your current offerings lined up with how you’d like to continue in and grow your business? Do they give you the time off you need? Allow you to work with clients or produce products that feel good? If you’re happy with where you are now, fantastic! No need to change anything. Because remember: you don’t always have to be moving the goalposts on yourself. (And I will fight anyone who tells you otherwise!)
If you’d like to grow, what needs to change in order for that to happen? Does it mean hiring/growing a team? Investing in a mentor/coach? Streamlining your operations or revamping your offerings? Whatever it is, you can figure it out.
And remember, growth doesn’t necessarily mean bigger, more income, and larger teams. Growing your business can mean rooting, streamlining, and quality over quantity.
2. TEAM
IS YOUR BUSINESS RESPECTFUL OF YOUR TEAM’S HUMANITY?
If you have contractors, a VA, etc, are you paying them a thriving wage?
Not just a living wage, and certainly not the minimum wage. (A thriving wage, in case you haven’t heard me get on my soapbox about this, is an amount that a person needs to actually THRIVE, not just to pay rent, bills, and feed themselves, but to go on vacation, have hobbies, and be a happy, productive person in society.) Because if you value things like justice, equality, and non-exploitative business practices, paying anyone on your team a thriving wage is NON-NEGOTIABLE.
And if you hire a VA in a different country because you “can’t afford” to pay them what would be considered a living wage in your own country, think real hard about whether you’re ready to hire. There are *lots* of places you can hire “cheap” VA help. Before you jump on that train, consider this: The value a VA’s work brings to your business shouldn’t be dependent on where that person lives. Paying someone less for their work based on where they live is exploiting that hire’s geographic location. Why would you value someone’s work less because of where they live? Answer: you shouldn’t.
If you have contractors are they truly contractors, or are they actually employees?
The line between a contractor and an employee is pretty damn thin and getting thinner every day. We usually like to hire people as contractors because it’s cheaper (no social security or Medicare taxes to pay, benefits to coordinate, etc). But hiring people who should rightfully be legit employees is illegal and unethical. And you don’t want that karma coming around to bite you in the ass. So do your research and if you can’t afford to pay someone properly, you’re probably not ready to be hiring in the first place.
Related Post: Is Your V.A. an Independent Contractor or Really an Employee?
3. MONEY OUT
IS HOW YOUR BUSINESS IS SPENDING MONEY REFLECT YOUR VALUES?
Doing your bookkeeping brings you eye-to-eye with how you’re spending your money. You can see in black and white what companies you’re supporting and what teachers you’re learning from.
Look into the companies you buy software from, where you purchase your raw goods, and who you generally do business with. Do they share your values? Have they made public statements on their efforts to work toward justice, equality, diversity, and inclusion? If so, are they acting on those statements? (If you’re not sure, Jessica Rodriguez of Freedom Driven Success has done a LOT of legwork and created this fantastic spreadsheet. Just click the link in her IG bio. No opt-in required.)
Look HARD at the leaders and teachers you’re learning from (especially if you’re giving them your money!). Do you share their values? Do they use high-pressure marketing tactics? Look at the comments sections of their social media posts. Do their customers look like a crowd you’d like to be associated with? If all seems kosher, awesome! If not, maybe it’s time to start looking for a new teacher.
Remember: We get to vote with our dollars. Make sure you know who you’re voting for.
4. MONEY IN
DOES HOW YOUR BUSINESS BRINGS IN MONEY REFLECT YOUR VALUES?
Specific products and services aside, how your business brings in money is a measure of its ethics and regenerativeness. (Is regenerativeness a word? It is now!)
If you offer payment plans, do you mark them up, and if so, by how much?
I get SUPER spicy about this. Marking up your payment plans is a slippery slope to capitalist douchery.
If you mark up your plans because of “extra administrative expenses”, how much does it really cost you in time and energy to tend to those payments? When set up properly, payment plans are super easy and barely any trouble at all. If you mark them up because it’s “industry standard”, well, I suggest it’s time to set a new bar for your industry.
If you’re afraid that people will flake and not pay the full amount, what does that say about the relationship you've cultivated with your clients? The level of trust and value provided and shared humanity? ALSO: what does that say about your preconceived notion of the type of people who need to pay in installments? That perhaps they aren't quite as trustworthy as people who can pay in full?
Because, while it may not be your intention, when you charge more for paying in installments, you're rewarding people who already have the most access to money, and penalizing those with the least. You're making the people who can least afford it, pay more. Which is how the rich get richer and the poor get screwed. And where's the equity in that?
Look at your streams of income and consider how you’re marketing them.
Are you using high-pressure sales tactics? Things such as:
Creating a false sense of scarcity / creating artificial deadlines (We all know it’s a pre-recording webinar. There’s no limit to the number of seats you can sell.)
Playing on people’s fears and pressing on their pain points in your sales pages and emails, as opposed to speaking to their goals, hopes, and aspirations.
And, since we’re talking about money here, are you money shaming people into purchasing your service or product? If you’re saying things like (or implying that) “You can’t afford not to” or “If you really cared about your business you’d find a way”. Gag. Me. With. A. Spoon. People have REAL disadvantages when it comes to access to capital, loans, credit, etc. And to imply that they’re not investing because they don’t care enough or don’t have the right money mindset is wrong on so many levels. WRONG I TELL YOU.
*Steps off soapbox*
So yeah. Bookkeeping and financial reports aren’t the dry, useless, waste of time and paper a lot of people think they are. If looked at in the right light, they’re incredible fonts of information on where you are, what you value, and how your business is serving you and your community.
