Category Archives: Entrepreneurship

Using Paypal As A Simplified Bookkeeping System

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As a personal finance blogger, my business transactions are at a minimum, but around tax periods, I agonize over the involved bookkeeping task. I looked into different financial management systems and found that there are varying degrees to which businesses need finance programs.  I would meticulously copy the transactions from PayPal, my Chase Freedom credit card and my bank into my custom excel business spreadsheet that I use to calculate my taxes.  Things have changed recently, now I’m using PayPal to create a simplified bookkeeping system for blogging.

My Old Record-keeping System

I created an excel spreadsheet that had 13 tabs. Twelve tabs for each month, and one tab that represented a year end summary sheet.  For each month I would copy the transactions from the various sources and paste them into each month’s tab.  The Year End page would automatically update with revenue, expenses, profit, etc.

Of course I had a template to make this process easier by enabling me to just make a copy of the blank template and rename it to the current year (ex. moneyreasons_BK2012.xls).  This was highly functional and much cheaper than paying for an excellent program like Quickbooks, especially since blogging transactions are very simple and repetitive in nature.  Quickbooks (while awesome) is overkill for my simplified book-keeping requirements.

PayPal

 

My New PayPal Simplified System

First, let me mention what enabled me to do this new (nearly automated) simplified bookkeeping system!  I applied for a new PayPal credit card!  Yep just that simple change has enabled me to drastically simplify my bookkeeping process.  You see, now I can now track both my revenue and expenses within PayPal.  I use my PayPal credit card (which is a rewards card by the way), to pay for all my expense that I can’t pay with my paypal account, then I pay the credit card balance with my PayPal account directly.  That way I don’t have to send any check for my previous credit card bill anymore via snail mail anymore.

Now all I do is export my data from PayPal into a one sheet spreadsheet.  Next, I add any non-PayPal transactions (which are few at this point in time),  and that’s it!  Since the revenue is positive, and the expense are negative, I don’t have to do any special formula, just a sum at the end!  I do purge and clean up some statement that I export from Paypal, but that’s a pretty quick and painless process.

I’m actually pretty excited about the process.  I love to automate things as much as possible, and this will cut my time working on bookkeeping by hours!

Bests,
Don

Striving for Income Diversification

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Most of my life, I’ve been an employee.  For the most part, it’s been a good living and I have no complaints about the workability of the employee model, it has put food on the table and supported my family.  Recently, an associate at work retired, and I decided to ask him his plans.  And while he has a few personal projects going on, for the most part he said he doesn’t have much in the works.  No big plans to tour Europe for a month or year…  He’s not going to talk to the mortgage brokers sydney company, and buy a house in Australia.  In fact, he has no travel plans at all!

Since he had no big plans, it piqued my interest on what he would have done it he had it all over to do again, so I asked him.  Surprisingly, he said he wouldn’t have stayed with my current employer so long.  This was a surprise to me considering he was well liked and seemed happy most days.  His statement has motivated me to create more choices for myself!

Getting Paid for recycling

Money recycling

Jumping back a few years ago, I first started exploring the entrepreneur route with selling stuff on eBay.  And while I learned skills I didn’t previously had, and it was a boost in confidence, it wasn’t for me.  Next I started blogging, and it’s been more of a hobby than a total revenue stream, but I do make more blogging that I did with selling stuff on eBay.  Plus it’s much more fulfilling and profitable.

Now I’m at the stage where I want to explore real estate.  I plan on starting out small with a duplex (or triplex) for the first year, just to get my feet wet.  Then as my investment money builds up for the next potential property, I’ll buy a larger unit (hopefully).

With the investment property, that will mean that I now have income coming from the following sources:

  1. Employment Income
  2. Entrepreneur Income
  3. Passive Income (via dividend stocks)
  4. Passive Income (via real estate)

So now I’m back in the deep learning phase of my life to learn about all elements of real estate.  I’m even thinking about getting a real estate agent license.

Cheers,

MR

5 Financial Tips For Start-Up Entrepreneurs

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5 Financial Tips For Start-Up Entrepreneurs

Free enterprise is amazing.  The ability to formulate a business idea, create a business model, develop a product/service, market the product/service, close deals, and make money—that is the entrepreneur’s dream!  The current economic climate in the United States is poor, but this type of environment can often be the best for launching a new company.  The reason is simple.  Recessions force established companies to cut back on expenses and reign in company spending.  This decreased spending makes it very hard for established companies to adapt and change during a recession, and oftentimes severe recessions force companies to change everything from products to marketing to sales.  This makes it much easier for a new company to enter the market.  A common metaphor is comparing a new company to a fast, agile ship on a wide open sea. Large ships have a hard time changing course and maneuvering.

Money, Money, Money

The most common cause of business failure is a lack of capital.  If you are just starting out your entrepreneurial venture, take this truth to heart.  If you build your business plan around this concept, your chances of success will increase significantly.  If you have bad credit, you can apply for a business loans for bad credit.  Here are a few tips to consider when making financial decisions in the ramp-up phase of your operation.

The Foundation

First, you must understand that if you have a vision for a product/service, there is real power in that vision.  And that power can tempt you into thinking that you are going to make tons of cash right out the gate.  I like to call this the throes of entrepreneurial passion.  If you are not careful, you can easily conceive an illegitimate child in the throes of this passion!!  Therefore, be conscious of this.  Let the energy and power of your idea invigorate you and drive you every day, but don’t let it cause you to make unwise financial decisions.

Forgo Office Space

Now, this will depend entirely on your type of business, but if it is possible, do not sign a lease or secure office space until you have launched the new company and are making money.  One of the quickest killers of momentum in the early stages of a company is a lack of cash, and office space is generally one of the largest overhead expenses each month.  If possible, delay it.

Office Furnishings

If you do acquire a space, or even if you operate out of your home, do not spend money on lavish furnishings.  You may think you need to in order to create a certain type of “feel,” but the truth is that you do not.  Remember, Microsoft and Apple were both started in a garage.  Don’t use business loans for bad credit to buy things you do not absolutely need.

Employees

You will need help, but try to hold off taking on employees until huge sales requires more administrative help.  Sure, it may be nice to have a secretary that gets your coffee and newspaper every morning, but it’s not worth killing your cash flow to make it happen.

Pre-Sales

Do not bury yourself in a hole by building up inventory before you make any sales.  If at all possible, do the opposite.  Try to secure as many pre-sales as possible.  This will not only help you gain essential momentum in the early stages of ramp-up, but it will significantly reduce the cost of inventory.

Review and Analyze

Look at your financials on a consistent basis.  Take a seriously look and conduct in-depth analysis in order to determine where you can cut back. If you commit to rigorously keeping costs down, then you will be positioning yourself to not only survive the inevitable challenges of the ramp-up and launch phase, but you will also be instituting good habits and principles that will help guide your decisions when cash does begin to flow strongly.

This was a guest post by Michael T.

Thanks,

MR

 

My Largest Business Purchase For My BlogTo Date

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Today, I’m going to go through the thought process that a financial blogger such as myself would go through to make a business purchase.

Understand that I’ve been considering this business purchase for a long time, at least since last year.  So you are probably wondering what has been holding me back?  The financial considerations involving such an expensive purchase…

When I initially started looking for the type of laptop that I wanted, they were running at a cost of around $700.  Since my blog is small and for the first five months I only made about five dollars, I couldn’t justify spending that much money for what was basically a borderline business, but more of a hobby.

So what has changed?

First, the Apple iPad and other tablets have come on the scene and made me rethink whether I wanted a laptop or a tablet.  After playing with my son’s Apple iPod Touch and my dad’s IPad 2, I’ve come to the conclusion that they are both awesome products but for me, the larger screen of the laptop just fulfills my blogging needs better.  I especially like the larger screen when I’m working on graphics for my blog.  Needless to say, the apple products were very tempting and it wasn’t an easy decision.

Second, the price of the laptops that I was looking at dropped by more than half the original cost!  The particular type of laptop that I wanted now costs $300!  That makes a four gigabyte laptop with a 320 Gig drive cost as much as my son’s iPod Touch…  As awesome as the iPod Touch is, the pure horsepower and larger screen make the laptop an obvious choice.  Still, I think an iPod Touch or iPad would have been very useful and functional…  perhaps next year.

Third, my blog is finally making a little bit of money.  Not enough money to quit my day job, but enough to afford better tools for working on the blog.  I plan on pouring some of the money from my blog back into the blog itself.  This purchase will enable me to blog from many more places than I previously could.  Now I’m able to be more mobile with the longer battery life of my new laptop.  Previously, I was occasionally using the laptop from work but this feels more right, and the longer battery life and greater processing power will enable me to do far greater things with it than the older laptop I was using.

All told, it still took me longer than 1 year to make this purchase.  In fact, had I not see this bargain on one of the bargain sites (techbargains.com), I wouldn’t have made the purchase.

Even after the salesperson brought out the laptop and handed it to me, I had to walk around for about 30 minutes before going up to the cashier for the purchase.

Thanks for letting me share my largest business purchase with you!

MR