Tue, 29 September 2015
What if you could create beautiful photos... of 100 products...in minutes? No, you're not dreaming! Using Photoshop and Smart Objects makes it possible. Sarah Guillot has worked with these tools for years as a User Experience Architect (how cool does that job sound?!) and now she has her own side gig helping Mamapreneurs like you and me use Photoshop for business to make our lives easier and faster.
On the Podcast
00:52 - Architecture for Users
Architecture for Users
In October of 2014, Sarah Guillot launched her first side gig. But she's still working full time during the day as a User Experience Architect (UX Architect for short) Essentially, Sarah helps big companies like Microsoft, Amazon, and GoDaddy figure out how to create the best possible experience for users traveling through their website.
She works on user flows, wire frames (a demonstration of how a website will look and function) and works on landing pages to optimize them for sales or other conversions.
Despite her brilliant day job and experience with the online world, Sarah says she had all sorts of fears that held her back when it came to starting her own business. There were so many unknowns she'd never dealt with before - getting a business license, figuring out taxes, and lots of other little details.
In October of 2014 Sarah purchased an online course for writing and publishing e-books. She followed it step-by-step until she learned about marketing her book and getting reviews. Unfortunately, Sarah felt that the course creator was encouraging her to get reviews in a way she thought was unethical. So Sarah didn't have the huge book launch she wanted, but she did get her books out into the world.
After that iffy experience, Sarah shifted directions and started making printables in the Fall of 2014. She thought it was the perfect time to jump on board since everyone would be buying Christmas printables to decorate their homes. Despite her best efforts, over the next six months Sarah wasn't getting much traction on her printable sales. The niche is so crowded already, and there are many beautiful ones available for free online. Sarah realized she'd have to drive a ton of traffic to her shop to really make a living selling printables. In the meantime, Sarah realized there was a big problem in her niche that she could solve!
(Ever notice how the path to business success isn't always straight and smooth? Sometimes it takes a bit of trial and error to find the right niche, or a problem that demands a solution. Don't give up, Brilliant Business Mom!)
Solving a Real Problem Inside a Make-Believe World
When Sarah was setting up her printables shop, she used Photoshop to make mock-ups so she could quickly and easily show case her printables.
Sarah quickly realized that there are many Etsy sellers in all sorts of field who can benefit from mock-ups to showcase their work in a realistic way.
So What's a Mock-up?
A mock-up means taking an image, such as a frame, mug, book, or t-shirt (often with beautiful props alongside it!) and putting your digital design right onto that image to show how your designs or creations will look in real life.
Mock-ups are perfect for T-shirt designers or drinkware designers who don't want to do a photo shoot for every new design they create. They use their digital design (without even making the product) and place it onto the beautifully styled photography scene.
Not all Mock-ups are Made Equal
Sarah looked around at the styled stock photos currently available and realized there was a big gap for sellers who create more unique items. There aren't nearly as many mock-ups for products that don't go into a frame. Mason Jar Mug sellers, glass sellers, mug sellers, and other vinyl decal sellers didn't have as many beautiful photos to choose from, and if they did find a great photo, they weren't sure how to get their designs into the photo and have them look natural.
One great way Sarah researched this niche and knew which problem to solve was by participating and listening in many Facebook groups. Sarah joined many groups for Etsy sellers and noticed that 5-10 people every day were asking about mock-ups. They'd wonder, "How do I make a mock-up? What are mock-ups good for? Who can find styled stock photos that fit my product?"
Sarah began solving their problems and answering their questions by recording Youtube tutorial videos and posting them on her blog.
Finally, Sarah created a Mock-up Design Essentials Course. The course has short videos that add up to about an hour of tutorials along with photoshop template files that have pre-styled scenes.
Sarah differentiates herself from other styled stock photo sellers in two key ways.
What Makes an Object Smart?
So... we're pretty sure these objects in photoshop don't have an IQ of 145. What makes them smart?
If you have a styled scene full of cute little desk accessories and you want to lay your printable (pretty piece of paper in digital form) on top of a desk, this is very tricky to do because the angle of the image will be quite different than your flat-rectangled printable.
You'll have to stretch, tweak, and mess with Photoshop for a while to get your printable design to look just right laying on the desk in the photo. But that's not the case if you turn that piece of paper into a smart object.
THEN, adding your printable design to the desk goes like this:
Smart objects are perfect in this instance for two reasons.
An added benefit to using smart objects:
You can also use one smart across multiple Photoshop files. So then, if that object needs to be changed, Photoshop will automatically change all the other files that include that object for you.
Again, let's use an example so this makes more sense! If you're designing a website with a team of people and everyone is using the same header. (It's a smart object) Then one day someone says "we're going to change the header color" The team doesn't have to go in and edit 100 files that all include that header. They simply change the smart object for the header, and all the other files are automatically updated. (Is it just me or does that sound amazing?!)
To create a smart object, take that layer you want to turn into a smart object and save it as a.psb (This is the extension for a smart object versus .psd which is the typical photoshop file extension.)
(If you're wondering if Adobe is worth the price, you should know that you can get a 1 month free trial, and after that you can get Photoshop and Lightroom for $10/month. We're not affiliates, we just use Adobe products regularly. Check out our interview with Kim VanSlambrook to hear how she uses Lightroom to save her loads of time when she takes real product photos.)
So how does Photoshop stack up to the other great photo editing tools out there, like Canva and Picmonkey?
Sarah hasn't used Picmonkey in a while, but Beth Anne says adding your own fonts is easy, and arranging transparent pngs to get the perfect graphic design is a cinch.
Canva is great for typography. They have so many creative templates that you can plug your headlines into. They also have social media image sizes ready to go so you can save time.
Photoshop has some unique features that you can't find anywhere else. For one thing, their color correction tools are powerful, and you can color correct just one aspect of your photo while leaving everything else the same.
Working with layers in photoshop also means you can customize which aspect of your photo you edit, and you can shift layers around (like the png overlays I use in picmonkey).
Photoshop has powerful editing tools for other aspects of a photo as well, such as smoothing out blemishes, adding shadows, or erasing something.
Adobe products also work nicely together, so if you use Illustrator for graphic design, you can drag layers over into Photoshop for more editing.
If you're not sold yet, Smart Objects will put you over the edge. No other photo editing tool on the market can so quickly and easily take your design and place it perfectly on the right object in a photo.
Help for Photoshop Newbies
Sarah Korhnak mentioned in the interview that she probably wouldn't give Photoshop a try, because it just seemed way too complicated, and Picmonkey works great for her!
But... she may have been persuaded. Sarah Guillot says the beauty of Photoshop is that you don't have to know how to use every single feature in order to benefit from the program.
Sarah's course teaches sellers just what they need to know. You can get started and save yourself tons of time while simply ignoring the 100 other tools that you don't need at the moment.
For her course, Sarah focuses on helping sellers get their designs out the Silhouette program and into Photoshop, how to add those design to your smart object, and how to change colors, shift objects around in the mock-up scene.
One of the most common groups of people who can benefit from Photoshop Mock-ups are those designers who use a Silhouette. What exactly is Silhouette, and what can it do?
Silhouette Studio is the name of the design program that accompanies Silhouette printers. The Silhouette Cameo is a printer that can print 12 by 12 inch sheets of vinyl designs, stickers, or other items. The Silhouette Portrait is a smaller printer that can work with letter-sized sheets of material.
A Silhouette costs about $200 to $250 for the machine and a few tools to print designs.
Sunshine Sticker Co.
One of the things we love about Brilliant Business Moms are the genuine friendships we make with brilliant women who are growing businesses. Our private Facebook group is such a positive, encouraging place, and for many women, it can be a jumping off point for developing their own masterminds or partnerships.
Sarah Guillot and Ashley Monda met through our private Facebook group and teamed up with a few other women to form a Mastermind. They hold weekly Google Hangouts to encourage each other.
When Sarah came up with her idea to help Etsy sellers with photography mock-ups, she turned to Ashley for feedback, because Ashley uses her Silhouette often to make party supplies.
After getting to know each other well, they both came up with the idea to get into the planner sticker market. (Planner stickers are huge these days!) Sarah could bring her design skills to the table, and Ashley could print and ship the stickers.
The more these ladies researched their new idea, the more excited they got. They got together on Google hangout and said, "Wait... are we really going to do this?" The answer...."Yes!"
Sarah and Ashley have never met in person, but their planner sticker business, Sunshine Sticker Co. has already launched! Sarah says she already knew Ashley well and developed a friendship with her. She knows all about her family, her business, and she knew Ashley had a great work ethic. They both live in Washington state, so in-person meetings are possible down the road.
We're so excited for Ashley and Sarah and can't wait to see how their business grows!
It's only a Season
Sarah is in an interesting place right now when it comes to combining business and motherhood. She's still working full-time, and she's also working like crazy to grow her new businesses.
She doesn't want to work 40 hours a week for someone else forever, but.... right now she's working 80 hours per week trying to grow her biz and work her day job! Sarah is often up past midnight working hard on her business.
She says it's a lot of juggling, and some days it just feels like way too much to take on. But Sarah is keeping the end goal in mind. It's just a season, and working 80 hours per week isn't the way her life will run forever.
(You got this, Sarah! We can't wait to see you kiss that day job goodbye!)
The Preferred Podcast for 5-7 Year-Olds!
This funny mom moment made our day! Sarah says she listens to a lot of podcasts while she drives her girls to school. Among her favorites are Pat Flynn, Flipped Lifestyle, and Brilliant Business Moms. She didn't realize how much her girls were paying attention to what was said until one of them asked if she could start a business someday. Sarah said, "Sure!"
Here comes the best part: Sarah turned on Pat Flynn one day and her daughter said, "I want to listen to that other podcast ..you know ..the mom podcast!"
Pat Flynn, we love you, but apparently Brilliant Business Moms is a little more popular among the elementary school crowd :)
(Pssst - that's not the first time we've been requested by little kiddos. Cheri Tracy's girls love us too. How fun!)
Stay in Touch with Sarah!
Thu, 24 September 2015
Doing your business taxes can be a bit overwhelming. So many boxes...so many terms you've never heard before! Once you understand the accounting terms that the IRS uses, your taxes will feel way more manageable.
Let's take a brief moment to discuss the fun accounting terms of Asset and Depreciation. These words come up a lot, especially as they relate to your tax return. This year when the IRS comes knocking, you'll be ready. A few big vocabulary words can't scare us away!
In your business, most of your purchases are expenses. An expense is something that gets used up rather quickly and therefore the benefit is used up quickly. Some examples are ink and paper. You buy them, and they get used up - they are expenses. (FYI - we're not talking inventory and Cost of Good Sold here. We'll discuss that at a later date.)
Sometimes when you make a purchase it's not an expense, its actually an asset. An asset is something where the usefulness is used up over the course of several years. It provides a benefit over a longer period of time. Examples include equipment, a camera, or a computer.
As an example, when you purchase a camera and use it to take product photos, it's providing a benefit to you over the course of much more than just one year. That's the difference between an asset and an expense. Does the purchase benefit you over the course of a long period of time? An asset will help you continue to earn revenue over the course of several years.
Matching Revenues and Expenses
In accounting rules, revenue and its associated expenses should be recorded in the same period. This is called matching. Let's say you purchased a camera and recorded the entire purchase as an expense in the year you purchased it -- 2015. But the camera helps you earn money in 2015, 2016, 2017, 2018, 2019 . . . a long time. So the expense and the revenue aren't matched up together. You've got revenue produced by the camera recorded over the course of several years, but the expense of the camera is only recorded in one year. The revenue and expense are not matched.
Matching is a very important acconting principle, the revenue and associated expense need to be matched together. This is where depreciation comes into play. The way you get the revenue and expense to match up, is to depreciate that asset over the course of several years.
Lets say you bought a $5,000 computer, that expense needs to spread out over how long you think you will have that computer. In other words, The expense needs to spread over the computer's useful life - the period of time that it will be of benefit to you. Often for small equipment that's 3-5 years. Let's say you think the computer will last you 5 years, (i.e. it has a useful life of 5 years) you take $5,000/5 years=$1,000 of depreciation you should take each year on that computer.
In this way you are spreading out the expense to match the revenue you earn in future years.
Depreciation also serves to show that the asset you purchased is losing value every year. Let's say you are a florist who purchased a vehicle to deliver flowers. It's only used for business. You purchased the vehicle for $20,000 and you think it will last you for 10 years, so that's $2,000 of depreciation every year. The car is helping you earn your revenue over the course of 10 years. When you take that depreciation each year, you can see that that car is losing value every year. After the first year of depreciation the asset is valued at $18,000, after the second year $16,000, and so on.
That makes sense in our heads. A car loses value every year. As the years go on, your asset is losing value. Depreciation shows that declining value.
Other related terms you may have heard are long term asset, fixed asset, or capitalized. This is similar terminiology to describe similar things. When you hear someone say they are capitalizing an expense, it just means that they are treating it as an asset. That capitalized expense is actually an asset to their business, not an expense.
Any questions? Leave me a comment and I'll answer your question to the best of my ability!
Direct download: Episode2010720Assets20and20Depreciation20final.mp3
Category:general -- posted at: 9:48am EDT
Tue, 22 September 2015
What happens when you combine an engineering degree with a talent for sewing? A beautiful business full of well-made products and streamlined processes is created!
Kim VanSlambrook is the solopreneur behind Lucy Jane Totes. What started out as a creative solution to a problem she faced quickly morphed into a beautiful business. Kim has moved her business across states and made some risky choices in the face of parenting two twin boys.
Sarah and I especially love the way Kim's engineering brain has developed a streamlined system for taking gorgeous, cohesive photos. Stay tuned to the end so you won't miss all of her photography tips!
On the Podcast
01:13 - Engineer meets Maker
Press Play on the Podcast Player Below to Hear from Kim!
Engineer meets Maker
Kim has a civil engineering degree from Purdue University with an emphasis in structural design. But once she became a mom to twin boys, she put that engineering background to use in other ways. She had a problem that desperately needed a solution: her boys were too thin for their pants, and the only belt she could find was $18 at Janie and Jack.
That didn't fly with Kim. She knew she could create something better for less. She got to work, and soon her friends were asking her to make belts for them too.
Kim then used her structural design background to reverse engineer a bag in larger proportions for moms on the go. Kim found that the current tote bags on the market just didn't have enough space or durability to work for her. As she solved her own problem, once again, she had customers waiting to buy totes from her too.
Lucy Jane Totes was born, and Kim absolutely loves her business because she can work from anywhere. Her husband is also a civil engineer who works on bridge design. His job moves often because he has to go where the big bridge projects are, so in just five years' time, their boys had already lived in 5 cities and 3 states.
Lucy Jane Totes also gives Kim a sense of identity. No matter where she lives or how new and out of place she may feel, she has her business as a constant to fall back on.
Kim's business started with local sales. This was a great confidence booster for her, and made her realize she could make a go of selling products online. She started her Etsy shop several years ago, and initially, it was a hodge podge of items - pillowcase dresses, nursing covers, and tote bags, among other things.
Kim chose to focus on her tote bags and make that her business. In the process, she eliminated all the other random items in her shop.
This was an especially risky and difficult decision, because at the time, Kim's nursing covers were being featured in Pregnancy and Newborn Magazine!
However, Kim had to streamline for a few reasons:
Kim says when she ruthlessly eliminated other products, her sales took off!
Deciding on a "Look"
Kim's advice on choosing your brand identity is to determine what you want your overall "look" to be for your products and business.
As creatives and makers, it's easy to find new fabrics or product ideas that we just LOVE, but if it doesn't work together with the other items in your shop, you just shouldn't include it. Every new product you add needs to fit with your brand.
Kim's husband always reminds her that the most successful restaurants tend to have focused, small menus. It should be the same way with a handmade business.
Kim's Risky Move
Kim made another risky move in her business not long after deciding on her brand identity. She closed her shop for an entire year! The business was rolling along. She was getting a lot of sales and good publicity, but because she didn't have good child care for her boys, her work time was falling from 8-midnight each night.
Kim admitted that she started turning into "mean mommy. " She wasn't getting enough sleep and she felt pulled in every direction.
Kim asked herself, "what will I regret the most?" She knew that she would regret pushing hard on her business at the expense of her kids and family. Her relationship with her kids and husband matters most - so she took a break from the biz and just focused on them.
A year later, the boys were starting school and Kim's schedule was better. She got back to work on Lucy Jane Totes and says it was a great decision! She returned to her business with a new energy and focus on where she wanted things to go.
Why Kim is the CEO and COO
Kim hasn't outsourced very much in her business, and part of this is because she didn't have the best experience when she tried.
Last year, Kim set up her own website using the Shopify platform. Initially, she hired someone to create an e-commerce site for her, but it turned into a bit of a disaster because Kim had a very clear vision for how she wanted her site to look. (After all, she had refined her branding and knew what her business was all about!) The project was so far along that Kim ended up paying for a site that she never used.
That was her lesson. She loves learning , and she's not intimated by googling until she can figure out how to add a new piece of code. So Kim uses a template from Shopify and changes aspects of the template to suit her brand. By being her own COO, she can ensure that her vision comes to life.
Etsy versus Shopify
Etsy has changed a lot since it first began. It's now much easier to sell items that are far from handmade on the site, and for this reason, it's a bit discouraging for a true handmade seller like Kim.
There are plenty of tote bags on the site that were purchased wholesale from China and a monogram was added. Kim creates her bags from start to finish. Potential customers even write to Kim to tell her that they can get a bag like hers for less money!
On the other hand, Etsy is great for getting traffic into your shop, and great for getting found via search engines and via Etsy search. It's hard to get the same level of traffic on a brand new site of your own.
But, it will take time for Kim to build up the same level of traffic and customers that she gets from Etsy. It's a balancing act, and at this point, she wants to keep both shops open.
How to Get Found
Kim gets more consistent sales from Etsy because of the sheer volume of shoppers searching there and being able to optimize her listings for SEO.
But if an influencer is talking about her items on social media, they'll link right to her own site and she'll see a spike in sales. Kim also uses her business social media accounts to point people to her own site versus Etsy.
Kim also gets found quite often via Google image searches. Both her Etsy listings and her blog photos get found this way. Kim actually got an order from the Estee Lauder companies to use her tote bags for a sales meeting, and they found her Etsy shop via Google image search!
Working on the Business
One of Kim's biggest goals is to increase traffic and sales on her Shopify site, but it's difficult to do when she's still the person sewing all of her bags.
She knows that in order to grow, she'll need to hire someone to help with the sewing so she can work on the business more and in the business less.
It's a difficult task to find someone who will do the job well, because Kim is very particular. She creates quality products that will last for years so she has to find an employee with the same high standards and skill level.
She knows that outsourcing will be worth it in the end, but the first step is the hardest!
Instagram vs Pinterest vs Facebook - It's War!
Ok, so the headline was just for fun. It's really not war between these social networks. Kim finds them all useful for different things, and we have to agree!
Instagram: Kim is most active here. She's a visual person and she loves turning her Instagram feed into a board of inspiration. Instagram also lets Kim have more interaction with her customers and followers versus Pinterest, where people don't chat very often.
Pinterest: Kim loves Pinterest for its ability to take photos of her work and make them spread. She once had a photo from her blog on a kitchen storage project that got featured on Apartment Therapy! That pin has been re-pinned thousands of times and still brings her steady Pinterest traffic.
Blogging for Business
Keeping up with a blog while running a handmade business is hard, but Kim has a clear goal with her blog: Keep content fresh enough that when someone new stops by her site, they know she's a real and active business. From there, Kim makes it really easy for a blog visitor to head to her shop or follow her on social media where she has time to post more often.
Kim posts about shop updates, a bit about family life, and crafty tutorials or photography tips.
If she had unlimited time, Kim says her focus would be on more DIY tutorials, sewing projects, and home projects.
Blog Ideas for Handmade Business Owners:
My name is Who, my name is What?
Sorry for the Slim Shady reference, I couldn't resist! Just like Sarah and I couldn't resist asking how Lucy Jane Totes got its name. It's such a cute name... but its owner's name is.... Kim?
The story behind Lucy Jane is really sweet. Kim and her husband originally planned to have a whole slew of kids, but with twin boys and a tough pregnancy, they decided they were quite content with two healthy kids.
They knew if they ever had a girl they would name her Lucy Jane. Jane is Kim's mom's name, and she's been a big source of inspiration in Kim's life.
When they realized they likely wouldn't ever have a girl, they named the business Lucy Jane instead.
The Creative Process
After talking about Kim's business name, this launched us into a conversation on the doubts that creep into all of our minds when we pursue something creative. When an idea first strikes you think, "Oh my gosh this is the best thing ever!" Then the next day you'll think, "Oh my gosh this is the worst thing!" Then a few days later you'll think, "Oh this is really good!"
Isn't that the truth? When Kim designs bags or new products, she likes to make one, step back for a bit, then re-examine who work to figure out if she really likes it or not.
Kim Takes all her Own Photos...of herself?
Sarah and I were dying to know how Kim gets such great photos of her bags! And... most of those photos have her in them holding the bags and showing them off. (Seriously, if you haven't clicked over to Kim's site yet, now's the time to do it... her photos are amazing.)
So how does Kim manage to take all her own photos... while she's in them?!
Gorgeous photos and cohesive look... DONE!
Kim says she used to take all the photos at once then sit down at her computer to edit only to find out that something was off. Now she saves herself loads of time by seeing the photos on the computer immediately and making adjustments before she takes too many photos that aren't right.
So... what's a tether?
To start a tether, just use the mini USB port to connect your camera directly to your computer .
Kim's other Killer Tool: Dropbox. Kim exports her photos as a square to dropbox, so that way she's ready to upload them to her website or use them on Instagram.
To Photoshop or not to Photoshop: Kim says she struggles with Photoshop because she has a tendency to over-edit, and in the end, she doesn't even remember what the photo was supposed to look like!
Wow! I'm so impressed with the way Kim streamlines her photography process. It's obvious that she's got things down pat because her site and her Instagram feed are just filled with beautiful, creative photos of her products.
Kim's Adorable Mom Moment
You'll have to tune in to hear how Kim's son Teddy is creating his own "department" within her business - so cute!
Stay in Touch with Kim!
Thu, 17 September 2015
The Home Office tax deduction is a topic that people often have questions about. Find out today whether you qualify for a Home Office tax deduction and how you can calculate it.
The information presented in this episode is derived from IRS Publication 587.
When determining if you qualify for a home office tax deduction, the main question to ask yourself is, "Do I regularly use part of my home exclusively for conducting business?"
In order to qualify for a home office tax deduction, the IRS stipulates that you cannot use the space for both business and personal purposes, it must only be used for business purposes. If you have a home office, you can only use it for the business to qualify for the tax deduction. I personally have half of my basement that I use exclusively for our Amateur Naturalist Etsy shop. This portion of my basement houses all of our inventory and packaging supplies and it's where I process all of our orders. I don't use that portion of my basement for anything else but our Amateur Naturalist Etsy shop, so it meets the exclusivity test.
Let's say you are a food blogger, your kitchen does not qualify for a business use of your home tax deduction because you are using your kitchen for both personal and business activities. Now if you were a really wealthy food blogger and you had two kitchens in your house, and you used one exclusively to make and test your food blog recipes, then that second kitchen would qualify for a home office tax deduction.
For Brilliant Business Moms I do most of my work at the kitchen table or the family room couch. Because the kitchen table and couch are not exclusively used for the business, those areas of my house don't qualify for a tax deduction.
An area of your home that you use to story business inventory does count for the business use of your home tax deduction.
If you have an area that you use exclusively for your business, you must also use that area regularly in order to qualify for the business use of your home tax deduction. It can't be an area of your home that you only occasionally use for the business.
Principal Place of Business
The IRS also stipulates that your home must be your principal place of business in order to take the home office tax deduction. As bloggers and Etsy sellers this is almost always the case.
There are two methods you can choose from when calculating the amount of your tax deduction.
Actual Expenses Method
There are two methods to choose from for calculating your tax deduction. The first is called the Actual Expenses method. Calculate the square footage of the business use part of your home, lets say its a 10x10 area, or 100 square feet. Next determine the square footage of your entire house, lets assume you have a 1,000 square foot home. Lastly, calculate the percentage used for business purposes so for our example 100/1,000=10% of the home is used for business purposes.
A portion of the expenses involved in owning and maintaining your home can be counted as a business tax deduction. In the case of our example, 10% of Real Estate Taxes, Insurance, Mortgage Interest, Utilities, Depreciation, etc. can be counted as a home office tax deduction. These are called Indirect Expenses.
There can also be direct expenses. If you have to paint or repair the business portion of your house, then the entire cost to repair or maintain that area is a business expense, not just a portion. However if you are repairing or maintaining other parts of your home, those expenses are unrelated, and not even a portion can be taken as a business expense. For instance if you paint or repair your kitchen, you can't claim even a portion of that as a business expense, those costs are unrelated to the business portion of your home.
If you choose the Actual Expenses method, you'll need to complete Form 8829. I know this all seems confusing, but keep in mind that you'll be using a tax professional or tax software to complete your tax return. The tax program will walk you through these steps and complete this form for you. You just need to know to check that box that yes, you do qualify for a home office/business use of your home deduction.
There are limits on how much home office deduction you can take based on your business profits for the year. These limits are also calculated on Form 8829. The tax program will also adjust your Schedule A itemized deductions for the portion of certain items (such as Real Estate taxes) you take as a business deduction. The IRS is not going to let you double dip and count the same expenses twice.
The Easy Method
Yes, there really is an easy method, and it's actually easy!
Begin by calculating the square footage of the business use of your home. Lets use our 10x10 foot example, 100 square feet. Multiple the business square footage by $5 to determine your tax deduction. So in our example that's a $500 tax deduction. The maximum deduction for the easy method is 300 square feet or $1,500. Isn't that easy? All of this is right on Schedule C.
There is a gross income limitation on the easy method. If you don't have enough profit to cover the business use of your home tax deduction, you're not going to be able to take it in that year. So if you profit was only $100, you can only take up to $100 of a home office tax deduction.
All of our episodes on taxes and accounting will be pinned to our Small Business Accounting and Tax Help Pinterest board.
(Caveat, this information is meant to be a tax guide not a tax authority. Consider your own unique tax situation when you complete your tax return and consult with a tax professional who knows your unique situation.)
Direct download: Episode2010520Home20Office20Tax20Deduction20final.mp3
Category:general -- posted at: 3:30am EDT
Tue, 15 September 2015
Do you have a skill that you'd love to teach to others? Or maybe you just love connecting brilliant women in business with each other and with new customers. In addition to selling handmade purses, Angie Gordon does both of these things. She teaches classes locally on how to open and grow an Etsy shop, and she created the Handmade Chic Artist's Fair - a twice-annual event for handmade sellers to showcase and sell their items.
Plus, I have to say, this conversation was one of the quirkiest and most fun we've had yet! You'll have to press play below to see what I mean!
On the Podcast
01:19 - The Road Less Patterned
Press Play on the Podcast Player Below to Hear Angie's Story
The Road Less Patterned
Angie got her start making purses quite a few years ago. She and a friend decided they wanted to make themselves bag. They found a pattern and tried their hand at sewing.
Angie quickly discovered that she hates using patterns! From the lingo to the little pieces to cut out and match together, Angie finds the process tedious and strange. So, she designs her purses in her head and comes up with a process all her own.
As Angie started wearing her bags, friends at school and church would ask for one. The business started to grow and spread organically, and all of a sudden, people she didn't know were asking for her bags.
And once again, it was a friend who introduced Angie to Etsy! She started selling there in 2010.
Encouragement for New Etsy Sellers
Angie helps many brand new Etsy sellers get their shops off the ground with her classes, and one of the biggest misconception about selling online that she sees is that people assume if they simply put their work out there, people will come.
Selling online simply doesn't work that easily. You have to spend a lot of time and work hard to get found and get sales. And you need a lot of patience too!
The hardest part of selling on Etsy is getting noticed initially and getting your first few sales. But if you take a few minutes away from making your craft and figure out how to take great pictures, work on your listings to come up with the best tags and titles, and get your name out into the world with some marketing strategies, you'll start to see results.
"Don't give up!" Angie says. She's in several Facebook groups for handmade sellers, and she sees so many of them get discouraged really quickly. Angie didn't grow her business overnight - it took several years to get a steady stream of sales.
Coffee + Etsy = Perfection!
A few years ago, Angie started teaching workshops on how to get started selling on Etsy. Once again, the people found Angie! Friends and family would send emails and Facebook messages asking if she could help them get their shop started. But Angie didn't have an hour to spend with each person who asked.
A friend suggested that Angie gather a whole group of newbies and teach classes on Etsy. She found a coffee shop that let her use a room and a projector for free!
Lessons Learned from Teaching
Angie's first workshop was 2.5 hours long, very comprehensive, and when she finished, she saw nothing but deer in headlights!
She made sure the next class was smaller, and they started at the very beginning of opening their shops. writing their policies, creating an about page, and figuring our shipping. The women there literally brought out their laptops or ipads and got to work on their shops while Angie circulated around the room to help. Angie answered questions as they came up, and everyone left feeling equipped to open their first Etsy shop!
Advertising + Pricing
Angie started a Sheboygen, Wisconsin Etsy Sellers Facebook group, so she posts to the group when she's hosting a class. This alone, has been enough for Angie to fill her classes!
Angie charges just $20 per person for each class. She wants to keep it affordable for brand new sellers, but the small amount of money she makes helps to compensate her for her time.
Angie says that she spends the better part of a Thursday before class immersing herself in the topic she's teaching on, and putting together folders full of printed materials that everyone can take home. (Angie's so nice she even buys the ladies a cup of coffee for the class!)
Is Teaching a Business Strategy?
We were curious about whether teaching classes is something Angie views as part of her business, or just something she does to be generous to new sellers.
Angie considers her classes a hobby with benefits! She absolutely loves teaching, and she gets so excited when she has a class scheduled, but the small income she makes from classes is definitely not the meat and potatoes of her business.
For any women out there who may be considering starting their own classes, you should know that there are other ways you could do them. Angie chooses to make hers informal, but you could get in touch with your local Chamber of Commerce, or you could suggest that you teach a class to your local Community or Public College!
You don't have to teach about business - you could teach about your craft or hobby. You could even host a one-day conference on your field of expertise!
It's easy to get excited about the idea of teaching others, but quickly count ourselves out because we don't think we're expert enough to do it. Sarah and I say "you're expert enough!"
There is always someone a few steps behind you that you can teach. And Angie admits that she still doesn't know everything, but she teaches what she does know. And some of the things she teaches took her years to figure out! She loves passing along what she's learned and giving someone else a shortcut.
There's also value in learning from someone who's only a few steps ahead versus five thousand steps. That person who is miles in front of you may not remember what it was like at the starting line. They tend to gloss over the beginning and simplify the process of getting started. The person just a few steps ahead well remembers what it was like, and all the exact steps she took to get where she is today.
Angie saw an illustration the other day that serves as encouragement: There's a guy running really slow, but he says, "I'm lapping everybody on the couch."
Angie seems to have a trend of jumping into something fun that a friend suggested, and then later turning it into a something big! About 7 years ago Angie did a house party in her home to sell her purses. She hosted the party in November, and this time, she invited a few other maker friends to come and sell too.
The night went so well for the sellers that it became a tradition. After the second year, people started calling Angie and asking if they could be a part of it! 4 years ago, Angie had 14 people sell in her home, and 70 people walking through during a 2-hour timespan!
2 years ago, Angie and her family moved into an older home with a less open floor plan, the November event had 80 visitors who were shoulder to shoulder, so she had to find a bigger place! Angie moved Handmade Chic to the coffee shop where she had been teaching classes.
The coffee shop was so generous - letting Angie and the makers take over the entire shop, and even helping her advertise. She tried Handmade Chic in the summer to test out how it would go in the shop, and then they did it again in November. During the first summer event in the shop, they had 85 come through on a Saturday morning.
Recently, Angie did another summer show at the coffee shop, and this time, she took applications and branded it as Handmade Chic Artist's Fair. It's official! Angie has been very intentional in branding her event as exclusively handmade items.
Handmade Chic has a problem, though, they're outgrowing the coffee shop! It's a good problem to have, and Angie is fervently looking for a bigger space for this year's show.
Craft Show Fees
Angie charges just $35 for a 5 by 5 foot space inside the coffee shop, because they're very limited on space! But outside, a vendor can take a chance on the Wisconsin weather and pay just $20 for unlimited space.
Craft Show Advertising
When Angie first turned her November open house into an event, she would go on Vistaprint and make post cards. She mailed them out to everyone she knew and handed them out at school and church.
To this day, people come to the show and thank Angie for sending out a post card! It may be old school, but that physical reminder can make a big difference for a local event. It goes up on the fridge, and people don't forget to come. Angie also orders plenty so that the other makers can hand out postcards as well.
Welcoming guests to the event and offering a door prize serves another function too - they're able to get email addresses so they can let all the attendees know about the event for next year.
Angie's local radio station advertises community events for free. They'll read them on air for a week or two leading up to an event. In addition, Angie hires someone to write an article about the event, and it gets published in local newspapers. Once again - free advertising for the fair!
Building a Reputation
Because Angie has been very intentional in her branding of her craft show, she's building a good reputation that will help Handmade Chic grow from year to year.
Friends love to tell others about which craft shows are great (and which ones stink!) Angie realized early on that visitors were coming just for the handmade items, and those with home party businesses didn't sell well. So she decided to make the show juried and only accept the right handmade sellers.
Angie's recommendation for a juried show: Hire yourself a "Kim"! There's nothing more difficult than having to turn down friends and family who want to sell at your show. But if you leave the decision to someone else, you can tell your loved ones that it's out of your hands. :)
How many hours (& cups of coffee!) does it take?
We were curious about the number of hours it takes to plan and put on a craft show.
On the list:
Angie says when she's not physically working on the craft show, she's thinking about it, but it's something she really looks forward to.
The grossest of gross story
Angie described her funny mom moment in just that way! We'll leave it at that - you'll have to tune in to hear the crazy thing Angie's girls did when they were little. And shhh don't you dare tell them she shared this story on the podcast!
Stay in touch with Angie!
Tue, 8 September 2015
Doesn't it seem like the best ideas for our business often come at the craziest times? Sarah and I started the podcast in the midst of Chris coming home from deployment, us leaving for a trip to Spain, and Sarah and her husband Mike re-doing their kitchen...themselves. Before that, our Etsy shop, The Amateur Naturalist launched just months before Chris and I brought Holden home from India.
Rachel's business started in the midst of a crazy time as well. She had a newborn at home! And not long after Rowan was past the newborn stage, Rachel became pregnant with her second child. Learn how Rachel nurtures both a baby and a business - with incredible results on both fronts :)
On the Podcast
02:15 - Nurturing a Business and a Baby
Press Play on the Podcast Player Below to Hear Rachel's Story
Nurturing a Business and a Baby
4 Strategies for Exponential Growth
1 Year...Is it Enough?
Fits & Spurts -a Realistic Strategy for Moms
Making the Business More Passive
How to Schedule Life Around Baby and Business
Can a Solopreneur take Maternity Leave?
The Question that Will Give your Business Clarity
Rachel's Adorable Mom Moment
Stay in touch with Rachel!
Tue, 1 September 2015
BAM! You found it! Your perfect business idea, along with the best name, logo, and tagline to go with it! You're pumped! You're ready to get out there and make some sales!
But despite your best efforts, you end up with one unhappy customer among the thousands you've served. They're convinced you've ruined their life... and they're going for broke!
On top of that, you've noticed a similar business in your niche that has the same company name and tagline. What's a small business owner to do?!
No worries. Nellie Akalp has you covered.
While registering as an LLC or Trademarking aspects of your business may not be first on your to-do list, Nellie shares why they're important issues to consider as soon as you know you have a viable business on your hands.
On the Podcast
01:15 - Nellie's Second Start-Up
Press Play on the Podcast Player Below to hear from Nellie
Nellie's Second Start-Up
CorpNet is actually Nellie Akalp's second start-up! Her first business began in 1997 with her husband, Philip. They were in law school together and saw a need for an online business that provided entrepreneurs with legal filing help so they could get their businesses off the ground.
Intuit acquired the Akalp's company in 2005, and after their three-year non-compete clause was up, the Akalps were still so passionate about helping entrepreneurs in this way that they started from scratch once again and founded CorpNet.
Nellie and Philip have helped over half a million corporations and LLCs to get started by assisting with their document filing and streamlining the process of business formation for them.
Do you have a Fictitious Business Name (We hope not!)
If you've never taken steps to become an LLC (Limited Liability Company) or S-Corp, and you're not in a partnership, then you have a fictitious business name.
The default business structure for a solopreneur is called a Sole Propietorship. Many businesses start out this way, but it's not wise to continue with this structure for very long.
Essentially, a Sole Proprietorship allows you to do business under you own name, or a "fictitious business name". Filing this business type is called a "Doing Business As Filing" or "Fictitious Business Name Filing."
So get rid of that fictitious business name, and structure your business as an LLC or S-Corp.
(Note: You should always talk with an accountant and legal advisors. This article does not constitute either accounting or legal advice, but simply recommendations based on experience.)
What are the Benefits of an LLC or S-Corp?
The S-Corp or LLC are the best types of business entities for a small business owner to consider. Since laws vary from state-to-state, be sure to check with your accountant to determine which structure makes the most sense for you.
The Benefits of an S-Corp
What are the Benefits of an LLC?
Here's the best news of all! An LLC provides all the benefits of an S-Corp without all of the formalities required to file as an S-Corp.
With an LLC, you have have your cake and eat it too. You get added tax benefits, additional legal protection, more privacy, and appear more legitimate in the eyes of the consumer.
The only formality required for an LLC is to have an operating agreement that's executed by all of the members of the LLC and to file a yearly compliance document.
What Good is a Trademark if there are Two Companies Called "Nike"?
What is a trademark and why does it matter to you as a small business owner?
A trademark is a word, phrase, symbol, or design or a combination of any of these that identifies the source of a product or service and distinguishes it from its competitors. Trademarks can be given for product names, company names, logos, and taglines.However, trademarks apply only to a particular category of goods and services.
For example, Nike Inc. owns the swoosh mark on shoes, clothing, andsporting goods along with the name Nike and the phrase "Just do it" within the sporting goods category. However, there is also a Nike Corporation (a completely different company) who sells hydraulic lifting jacks and machinery.
These two companies, both called Nike, can both exist because each is clearly distinguished within a particular category of goods and services - one in sporting goods and the other in hydraulic machinery.
So what's the point of a Trademark if there can be two Nikes?
A trademark keeps your brand ID safe so that no one else in the marketplace can use your name, logo, tag line, or combination of those for a similar product. Trademarks are still powerful, even though they only apply to a specific category or just a few categories.
When should you Trademark?
If you have a viable business name and you're planning on using it in more than one state, then trademarking your brand name and possibly logo and tag line should be done during your start of business checklist. You don't want others to dilute your brand name or logo by using it on similar products that didn't come from you.
The Benefits of Registering a Trademark
Is Obtaining a Trademark Complicated and Expensive?
Acquiring a Trademark can be a complicated process, but you don't have to have a lawyer to do it. However, a document filing service like CorpNet can help you along without all of the crazy expense that comes with hiring a lawyer.
Below are the steps you'll go through to obtain a Trademark for your business.
This is where things may fall apart for the entrepreneur. If they're too busy and don't respond to requests for more information, the trademark application will expire and they will have wasted their application fees.
The $100 Investment that Turned into Millions
After snagging tons of technical advice from Nellie, we wanted to take things back a few years and find out what it was like to grow a start-up in 1997. Nellie was more than happy to share her story!
One of the hottest trends at the time was starting a business online because the internet was booming. However, these bright-eyed, enthusiastic internet entrepreneurs often had no clue about the tedious work of filing as an LLC or S-Corp or getting Trademarks for their business.
Nellie and Philip came up with the idea to help all of these start-ups with the legal filing they would need to bring their businesses to fruition.
With a $100 investment, the Akalps acquired a domain name and started their business out of their 2- bedroom apartment. They worked day and night until they reached a substantial amount of sales.
They were able to purchase their first home with their business, and then they acquired their own office space.
The Akalps signed a non-compete clause that lasted for three years. But rather than get used to their (very!) early retirement, they decided to get right back into the business when their non-compete was up.
Back to the Future
Clearly, starting a business in 1997 is much different than starting a business in 2009. We were curious about the challenges of starting again. Nellie was very open about several challenges that confronted CorpNet in 2009. But clearly, she's pushed past all of them!
The Benefits of Starting in 2009
More than a Million Reasons to be Proud
We love to get inside the heads of the mamapreneurs we interview to find out what makes them tick. Out of everything they've accomplished, what are they most proud of?
Nellie found it difficult to pinpoint just one thing considering everything she's done over the past 18 years, but she cited more than a million great reasons to be proud. Her company was acquired at an early age - Nellie was just 31 years old at the time, and she and her husband had built that company to be so successful that they became multi-millionaires when they sold it.
(Yep, I'd say building a company to that level - along with helping many entrepreneurs along the way is certainly something to be proud of!)
Nellie's Hilarious Mom Moment
Nellie's 4 year-old had us cracking up with one of her funny misunderstandings about how the world works. Seriously, this story is just too good! Tune in to hear it!
Find Nellie's Business Online