2019 SUMMER ISSUE | CHOICES 53
BUILDING A FINANCIALLY SUSTAINABLE MASTERPIECE BY JULIE DELONG s a bookkeeper, it has been my privilege to work with hundreds of business owners as they follow their passion to build businesses in all kinds of industries. It is exhilarating when they thrive and can be heartbreaking when they fail. In any endeavor, but especially when building your own masterpiece, it is essential to consider the costs and make sure you have the resources to reach your goals. Since dealing with financial data is my specialty, I’d like to share three practical tips for ensuring your masterpiece business is financially sustainable and will be able to serve the purpose you dreamt for it.
First, understand the true cost of selling your product or service. Do you have a handle on what the cost per unit is in your business? If you sell a product, you have a cost associated with making or buying that product, but you have other directly related expenses, too: the time it takes to process or prepare the product, packaging costs, merchant fees, etc. If you are providing a service, you may have some payroll costs, processing fees, perhaps some supplies or travel expenses, and certainly the cost of your own time. What is the true cost per unit for your business? When you know the true cost per unit, you can start asking the critical ques-
tions for business planning and development. Am I charging enough? Are there ways I could reduce my direct costs? Is my gross profit (revenue – direct costs as calculated above) enough to cover all my other operating expenses? Is it enough for me to pay myself? How many units do I need to sell to pay myself what I want to earn, or reach the goals I have for my business? Knowing and understanding these numbers will help you build a solid financial foundation for your masterpiece business. Review your balance sheet regularly. It’s a common mistake for business own-
The Masterpiece Issue