Recently, the heavens opened up and upon me descended a realization that I, Jodee Ball, of JP Ball Photography, was dwindling away profits.
Okay…that’s a tiny bit of an exaggeration. It goes a little more like this. Recently, I
willingly reluctantly, handed over my business finances to my fiscally responsible husband. It was upon his request and against my wishes. I knew I was in for endless questions and his snore-worthy lectures.
Shortly before our first office stand-off, I did my homework and started to closely assess my business accounts. What I found upon my investigation disappointed me. Over time, I had carelessly squandered away much of my hard earned money. This next sentences is to be kept at a top secret level. He was right and I was wrong. I needed the accountability and his assistance with regards to my business finances.
In my defense, I didn’t let this money slip away because I am an irresponsible adult. I did so because “life happens fast.” I was chasing three kids and keeping up with my teaching career along with starting my photography business. I simply let these minor details slip day by day, month to month.
As a business owner, I have come to realize that I will not be successful if I continue to carelessly stroll this path.
Below, I’ve outlined 6 ways I have piddled away the dough over the past few years. Are you squirming? Nodding in agreement? Read on.
1) Credit Card Merchant Fees – Not all fees are created equally. These fees may seem insignificant, but they do add up. Two of the more popular merchant accounts are Paypal and Square. Square is convenient to use with clients because it is immediately accessible and the client does not need to have his/her own account. Paypal is beneficial for sending an invoice online.
The fees for these two popular options are as follows:
Square – 2.75% for swiped transactions
3.5% + 15¢ for manually-entered transaction
Paypal Online – 2.9% plus $0.30 per online transaction
Paypal with card reader – 2.7% for swiped transactions
3.5% plus $0.15 for manually-entered transaction
*Notice the difference in percentage when you are keying in a number and not using the swipe extension on your mobile device! If you are charging a client $1000, then you are looking at a difference of $7.65 for a keyed-in charge versus a swiped charge. This can really add up over time!
2) Automatic Renewals – In this industry, we are blessed to have great resources such as educational websites/DVDs, forums, management services and software. But, as we change and grow in our business, so do our needs.
Many of these resources are set up so that they automatically renew semi-annually or annually. I don’t know about you, but because I didn’t consistently use everything I had signed up for over the years I did not pay attention to renewal dates. My last credit card statement included renewals up to $50 and that was just one month! What a waste on my part!
3) Rush Fees – When we compiled our tax information for this past year, I’m embarrassed to admit that I calculated a large sum in rush fees. Rarely would these fees have been needed if I had set reasonable turnaround expectations with both clients and myself.
For some reason, my Super Woman alter ego pops out when I am asked the question, “When will my order be in?”. Then, in the days to follow, I am wondering why Super Woman has abandoned me while I’m rushing to finish orders.
Watch your labs when you order as well. Many labs will have the rush fee option chosen and you have to manually change that option before ordering… to the tune of about $4-5/order!
4) Unnecessary Marketing – Keep your focus when choosing when and where to market your business. Oh the dollars I have tossed away in the name of marketing!
Tips for keeping down the cost:
- Social media marketing is free and can be used creatively. Use this to your advantage!
- Stick to your brand! Business cards, marketing goodies, and packaging supplies all add up to large amounts! I should know. It has taken me years to settle on a logo and I have stacks of wasted cards, notepads and bags taking up residence in my storage area.
- Set a yearly budget and stick to it!
*I’m going to be writing a blog post soon sharing some free marketing ideas.
5) Tax Penalties – Sore subject, I know, but since it’s post April 15th, I thought I could include it in this article. If you are registered as an S-Corp, be sure you are talking with your CPA about paying estimated taxes throughout the year. I am grossly under-qualified to explain much further, but HERE is a link to an IRS resource that provides pertinent information.
YOU WILL BE CHARGED A PENALTY IF YOU FAIL TO PAY ESTIMATED TAXES ACCORDING TO GUIDELINES.
If you missed Vickie’s personal blog post on Monday, check it out HERE. Vickie shares their story about their business undergoing an audit.
6) Impulsive Purchases – Still with me? I’m talking to you. Yes, you!
“It’s a write off” is a terrible excuse to use when making purchase that are not needed. Impulsive buying can include anything from basic Photoshop actions to software updates to props and equipment. Even a studio space can be considered impulsive spending if you rashly make the decision without considering all of the pros and cons of the arrangement.
Ask yourself 4 questions before making a purchase for your business purposes.
- Will it help me increase my sales/profit?
- Will it help me produce better quality images and products?
- Have I researched this item fully and completely?
- Do I currently have the money in my account to pay for this item or would it require more credit?
Dig a little deeper into your day to day financial transactions. We’d love to hear some of the ways that you increase your business profits by avoiding frivolous spending! Post your ideas on SSG’s FACEBOOK or TWEET us!
Remember when life was this carefree?
*Please note that my marriage was not harmed in the making of this blog post. Even though the financial sway has been a challenging transition, we are working together better than ever.