If it is provided for the customer as part of your service, then I'd do as a COGs, the hosting for your company would be expenses for example. Good question. Tammy

4:52 I missed that 💎 you did touch on it..

Great question. Yes! They really should have a business savings account with a good emergency fund. I'm a huge fan of both this and a separate account for holding tax money so you aren't tempted and have it when the time comes. - Tammy

Awe thanks! You rock! - tammy

I do not but it is a good idea....🤔

Great question. It is a tough spot. Eventually you want to build your retained earnings to just purchase but payoff immediately or at least within a month or so. How quickly are you able to pay off new purchases? Are you able to pay new purchases currently? That is ideal. Then chip away at the debt as quickly as possible.

@@BadassBusinessOwners thank you for replying! No, unfortunately I can't pay off new purchases right away. I think my problem is not enough sales. While my p&l shows about 14% profit after expenses, like you said it doesn't account for paying out to credit cards. Basically, I'll make the purchase at the beginning of a "season" (there are two "seasons" a year, aw and ss) and slowly chip away at that for the next 5 to 6 months. But I haven't been able to get that back to zero before the next season. So it would seem to me that my problem is not enough sales.

Clothing is so tricky since you have to purchase so much to get going to have an inventory. The mission is to get to the point to stop the credit card. So yes, your goal is to increase those sales! Got to move through the inventory to free up the cash. Inventory is just money sitting on hangers for you. :-) Also, watch how much you purchase of things that might not sale. Do you really need as many sizes for example. Start fine tuning what sells and what doesn't. Do what you have to sell old inventory to free up the money and then learn as you go to get better at ordering what will sell. You will not be perfect but if you can get just 25% better at the inventory piece, it will make a huge difference for you. - good luck! - Tammy

Glad it helped! - Tammy

Ah, thanks! Goal is to help as many as I can.. Tammy

You are correct. Quite a few businesses are hurting this year. Those who boomed during COVID are really feeling it. One things I've seen some folks do that has created some business is reaching out to the folks that they helped over the past couple of years and see if they are ready for a follow up. If you are in the carpet cleaning business, thenn it is a great time right now since so many folks like to have family over for the holidays and will need to get their carpets cleaned. So a great time to reach out to folks who already love working with you. - Tammy

Thank you. I hope to make more like this soon! - Tammy

Hey there. Yep, if I recall I did do that backwards. :-(. Fixed in future stuff tho. I wish they let us go back and tweak. - Tammy

Glad you like them and are finding them helpful. :-). - Tammy

There are some categories some folks include in COGS that others don't. The best rule of thumb is, if it is used in the production of a product or providing the service it is a COG. Otherwise it is just a cost of operating the business. And those fall under operating expenses. - Tammy

Good question! The first place i always start is, "Where is the biggest bottleneck in my business". What is costing me money or customers? - tammy

Yes. Hopefully, you have a dedicated credit card for the business. But yes, if any purchase is for the business, it would go on the P&L as long as it is legitimate. You just want to be careful of the commingling of funds (personal & work). - Tammy

@BadassBusinessOwners yes the company has its own credit card but credit card expenses are allocated to expense accounts such as office supplies, travel and etc. I just wanted to confirm if that's ok to be on the p&l

You aren't alone. I had one guy who had over 40 invoices outstanding. LOL You work too hard not to get paid! - Tammy

I'd make sure my pricing led to a profit so I can get paid for my "employee" time and as an owner due to the business being profitable. With that said, I always say that your employee "wage" should be a fair wage. Similar to what you would pay someone to do it for you. This way your pricing is ready for the day you need to hire someone to replace you in the "employee" role. With that said, what would you hire someone of your skills for? In grooming, I've seen folks do it by hour and some by commission, so just go with how you would be hiring if you did. - Tammy

Happy to help! Tammy

It is just a saying. I'm not sure what I was referring to. I probably just meant that once your run it all, it came to that number. Sorry for any confusion.

@@BadassBusinessOwners thabks a lot for your explanation . Your videos help me a lot to understand financials !

Glad they help! - Tammy

Occasionally I do. Check out babolearning.com there is a form there or shoot an email to [email protected] - Tammy

thank you.... Tammy

Thanks! - Tammy

Glad it was helpful! - Tammy

I appreciate it. - Tammy

that is great to hear. My goal is to help break things down for anyone to understand business numbers. :-). - Tammy

thanks! I appreciate it - Tammy

Ah, thank you. :-). - tammy

thank you! I think that is one reason I took the couple of weeks off for content. I knew I wouldn't show up the way I needed to. - Tammy

Thank you. I appreciate it... Tammy

Glad to be back and thank you. - Tammy

Ah, thanks. I know he will! - Tammy

Thank you. :-). - Tammy

I missed all you guys! - Tammy

I will probably be hiring a pro to help me with this stuff - maybe your business- but I need to earn some money first to do that and I don't want to screw everything up

If you are a solo LLC you are considered a pass-through entity. You would be taxed on any profits the business makes which will include the money you take out (since normally you would pull from the business profits). Obviously, a tax professional is who you want to speak to, but basically that is how it works. Hope this helps. :-). - Tammy

​@@BadassBusinessOwnersthank you

It is a great business! Good luck! - Tammy

Ah, thanks! Glad they are helpful! More to come soon! - tammy

Yes. Your shipping suppies would be COGS and technically the labor hours assemble it all would be as well. - Tammy

@@BadassBusinessOwnersokay thank you so much I appreciate your response & educating videos.

Since you have to prepare them to be used, yep, you could count that as COGS :-) - Tammy

Here is another video where I talk about that piece: kzbin.info/www/bejne/Y17GeIhpq6qLhZo