The Importance of Counting
The Importance of Counting
Boy, do I understand that predicament! Many of the people who come to me are in the same boat. And, since I’ve been there myself, I help them out of frantic mode by sharing with them that accounting didn’t come naturally to me, either.
I was a musical comedy actress for years. All through high school, and then as a Dramatic Art major in college, I avoided math like the plague. Math class in my day had word problems that began, “Farmer John has six bushes of wheat and he sells them at 39 cents a bushel…” Uh, who’s Farmer John? What’s a bushel? When’s recess? I just couldn’t relate. So I tuned out and turned off.
It wasn’t until the company where I was a secretary promoted me to Office Manager that I had to learn, because bookkeeping was one of my duties. I told them I didn’t know anything about that, but they said they’d teach me. So I nervously set out to learn what I had been avoiding all these years…and was surprised to discover I loved it. It wasn’t “accounting”—it was “counting my money”. Like Cuba Gooding's character in "Jerry Maguire", everyone in the company came to me and said, "Show me the money!" They were all bringing money in or sending money out, and some of that money was mine. The life of the business depended on making sure there was more money coming in than going out. That’s what profit is, and without profit, eventually there won’t be any business, and then everyone is out of a job.
If you’re working in a home-based business, you need to become proficient at counting your money. Keep it simple—list all your income from your business each month at the top of a piece of paper. This is your “gross.” Then list all the expenses related to your business at the bottom. When you subtract the money you spent from the money you made, you have your profit or “net”. (My accountant, Barbara Barschak, has an easy method for remembering the difference between “gross” and “net”: “Net” is a smaller word!)
Here is the reason you do all this counting: Look at your “net” and see if that’s the amount of money you want to be making every month. If the figure is too low, maybe you need to raise your prices, make more sales, or make bigger sales to bigger customers. Or perhaps your income is fine, but you’re spending too much money on new computer programs, advertising, taking clients to lunch, or promotional giveaways. Debtors Anonymous has a special section called Business Owners Debtors Anonymous because the endless expenses a business owner can justify as “good for business” or “tax deductible” can trap them in a cycle of overspending.
In addition to counting your money, here are more things you need to count in order to have a profitable business:
1. Count your ads. Count how many customers you get from that networking group you belong to. Does it justify the expense of the dues and dinners? How many customers has that ad in the yellow pages brought you?
2. Count your calls. Count the number of sales calls you make to get business, and count the number of clients you get as a result. How many calls do you have to make to get a customer? (Tip: if you want to double your income, double the number of sales calls you make.)
3. Count your time. How many hours do you spent making the money? If you’re spending 3 hours to make a $10 sale, you are only making $3.33 per hour before expenses. Probably that isn’t enough.
4. Count your blessings. Be grateful for every sale—someone wants your product or service. You are doing wonderful work in the world that is helping someone!
© Copyright Chellie Campbell. ALL RIGHTS RESERVED
The Importance of Counting - To learn more about this author, visit Chellie Campbell's Website.
Like this article? Share it with your friends
“I’ve just always been math-challenged,” my client Barbara moaned. “The words ‘Balance Sheet’ and ‘Income Statement’ scare me! I don’t know how or where to start doing the accounting for my business.”
Boy, do I understand that predicament! Many of the people who come to me are in the same boat. And, since I’ve been there myself, I help them out of frantic mode by sharing with them that accounting didn’t come naturally to me, either.
I was a musical comedy actress for years. All through high school, and then as a Dramatic Art major in college, I avoided math like the plague. Math class in my day had word problems that began, “Farmer John has six bushes of wheat and he sells them at 39 cents a bushel…” Uh, who’s Farmer John? What’s a bushel? When’s recess? I just couldn’t relate. So I tuned out and turned off.
It wasn’t until the company where I was a secretary promoted me to Office Manager that I had to learn, because bookkeeping was one of my duties. I told them I didn’t know anything about that, but they said they’d teach me. So I nervously set out to learn what I had been avoiding all these years…and was surprised to discover I loved it. It wasn’t “accounting”—it was “counting my money”. Like Cuba Gooding's character in "Jerry Maguire", everyone in the company came to me and said, "Show me the money!" They were all bringing money in or sending money out, and some of that money was mine. The life of the business depended on making sure there was more money coming in than going out. That’s what profit is, and without profit, eventually there won’t be any business, and then everyone is out of a job.
If you’re working in a home-based business, you need to become proficient at counting your money. Keep it simple—list all your income from your business each month at the top of a piece of paper. This is your “gross.” Then list all the expenses related to your business at the bottom. When you subtract the money you spent from the money you made, you have your profit or “net”. (My accountant, Barbara Barschak, has an easy method for remembering the difference between “gross” and “net”: “Net” is a smaller word!)
Here is the reason you do all this counting: Look at your “net” and see if that’s the amount of money you want to be making every month. If the figure is too low, maybe you need to raise your prices, make more sales, or make bigger sales to bigger customers. Or perhaps your income is fine, but you’re spending too much money on new computer programs, advertising, taking clients to lunch, or promotional giveaways. Debtors Anonymous has a special section called Business Owners Debtors Anonymous because the endless expenses a business owner can justify as “good for business” or “tax deductible” can trap them in a cycle of overspending.
In addition to counting your money, here are more things you need to count in order to have a profitable business:
1. Count your ads. Count how many customers you get from that networking group you belong to. Does it justify the expense of the dues and dinners? How many customers has that ad in the yellow pages brought you?
2. Count your calls. Count the number of sales calls you make to get business, and count the number of clients you get as a result. How many calls do you have to make to get a customer? (Tip: if you want to double your income, double the number of sales calls you make.)
3. Count your time. How many hours do you spent making the money? If you’re spending 3 hours to make a $10 sale, you are only making $3.33 per hour before expenses. Probably that isn’t enough.
4. Count your blessings. Be grateful for every sale—someone wants your product or service. You are doing wonderful work in the world that is helping someone!
© Copyright Chellie Campbell. ALL RIGHTS RESERVED
The Importance of Counting - To learn more about this author, visit Chellie Campbell's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
|
To learn more about the Evan Elite Author Program please contact us. |
 | |
|  |
Subscribe to Chellie's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
 |
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Termination Suit Startegic Plan Creation Competetive Advantage Article Explode Expo Results Business Wisdom |
|
 | ||
 |
Top 50 Political Blogs
Top Political Blogs of 2009 | |
 |
Top 50 SEO Posts - 2007
Top SEO Posts of the Year | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
