Filed under:Starting Out In Business
Wikipedia has a wonderfully simple definition of Bookkeeping. Here it is:-
“Bookkeeping is the recording of financial transactions. Transactions include sales, purchases, income, and payments by an individual or organization.”
That’s all bookkeeping is. It really is that simple. You just need to keep a record of money coming in and money going out of your business. At the end of the financial year you pass on the information to your accountant and he will do his bit. Of course, it also means that during the year you have a pretty good idea of how your business is going financially.
So where do I start?
If you haven’t already done so, you should open a business bank account. I’ve written a post on that very subject. If you want to check it out, just click on opening a business bank account. All your business’s monetary transactions should go through this business bank account and at the end of each month you’ll receive a statement of transactions. You will need to refer to this statement to do your bookkeeping.
Money In – Money Out
There are plenty of software programs available to help you do your bookkeeping from home and whilst these are a viable option, bookkeeping from home can be as simple as buying yourself a record book from your local stationery store or newsagents. That’s what I do. I use an 18 Money Column Record Book, but you can also get 9 column, 12 column, etc. I use mine as follows:-
The left side pages have columns as follows:-
- 1 Small column for the date
- 1 Larger column for writing particulars of transaction
- 7 small columns – to record money in
The right side pages have columns as follows:-
- 11 small columns – to record money out
Putting Headings on the Columns
This will depend upon the type of home business you are running, but the first 2 columns are straight forward. The first one is headed “Date” – the second one is headed “Particulars.”
The money in columns (on the left page) could be headed as follows:-
- Loan to Business
- Internet Sales
- Retail Sales
- Personal Sales
- Commissions Received
- Other
The money out columns (on the right page) could be headed as follows:-
- Bank Account Fees
- Telephone Expenses
- Internet Expenses
- Stock
- Car/Petrol
- Stationery
- Advertising
- Other
You don’t have to use all the columns, but I find I need more column headings for money out – that’s why I put money out on the right hand side, where there are more columns.
Recording Transactions
Once your columns are headed up, it’s just a matter of recording each transaction from your bank statement. For example:-
- Under “Date” – 1 July ’09
- Under “Particulars” – Phone expenses
- Under “Telephone Expenses” – $89.56
I’m sure you get the idea.
When you get to the bottom of the page, add up the columns and transfer each column amount to the next page. In bookkeeping they call this c/f (carried forward) and b/f (brought forward). So, next time you see c/f or b/f you’ll know what they mean, and you can start using them yourself in your own bookkeeping from home.
Quarterly Results
I like to do my bookkeeping in quarters. In other words, I log the first 3 months of the financial year and work out total Money In and total Money Out. That gives me my End 1st Quarter results. I then do the same for the next 3 months, then the next, then the next. I find this useful to compare different times of the year and keep track of what’s happening right now, rather than 6 or 9 months ago.
And Finally
Remember, my system is just one of many. You can follow my system or come up with a better one of your own. In either case, I hope you’ve been inspired to do your own bookkeeping from home. Let me know how you get on.
December 22, 2009
As you can see by the title, this post is Part 2. So, if you haven’t yet read Part 1 you might want to do that now. Just click here.
You’ll know that in Part 1 I listed some ideas to hopefully get you thinking about the endless opportunities that exist, if you’re thinking about working from home ideas. There are so many more ideas I thought I’d list some or them, just in case your weren’t inspired by the first list.
Depending upon where you live, you may or may not be able to carry out certain lines of business, so be sure to check with your local authorities. You may also need to consider insurances (more about this in later posts).
Some More Working From Home Ideas
Yoga and/or Pilate Instructor
Are you good at Yoga or Pilate? Do you know how popular these two activities are? It’s not just the celebrities that are flocking to yoga and pilate. I’d bet money that you already know people in your circle of family and friends who are getting their mats out on a regular basis. If you’re good at it and you have enough room at home, why not run some personal or group classes. It would appear age is no barrier!
Photography Business
A neighbor of mine has a photography business where she visits local pre-schools and takes photographs of all the children. Parents can then purchase the photographs. What a great business idea. If you have an interest in photography, then why not turn that interest into a business.
Subject Tutor
Don’t underestimate the number of children in schools who are tutored in almost every subject. English and Maths seem to be very popular. If you’re an ex-teacher, or just very good at a certain subject, then why not make yourself available as a tutor in your given subject. You can choose the hours and students can come to you, or you go to them. Their parents will love you for it.
Pet Minding
So you love animals and can’t get enough of them. Then why not set yourself up as a professional pet minder. This could be for a few hours, a day or even a week or more if the owners are planning a holiday. Not really my cup of tea but, hey, everybody to their own – right?
Affiliate Marketing
I talk more about this in a previous post. But, briefly, if you enjoy spending time on the computer/internet, why not consider becoming an affiliate marketer and make some money in the process. Affiliate marketers promote other people’s products and services and earn money when they make a sale and/or provide a lead. No shipping and no customer follow up. That’s all done by the ‘other people’. To find out more go to my Affiliate Marketing post, or click here for Affiliate Marketing e-book.
Selling On-line
Have you ever bought or sold anything on the eBay? If you enjoyed the process, then why not start doing it as a business. I’ll be writing a post about this very topic in due course, but in the meantime you may want to check out what a couple of very successful eBay sellers have to say. Here’s the link.
That’s about all from me on this working from home ideas post. Don’t forget to leave me some comments.
August 19, 2009
So, what are you good at? And what do you enjoy doing?
You know, the second question may be more important than the first. If you really enjoy doing something, you can always get better. If you’re already good at something, but don’t really enjoy it, then what’s the point. Having said that, being good at something and enjoying it quite often go hand in hand…and if you’re thinking about working from home, then maybe you can turn that passion into a profitable business.
I’ve decided to just fill this post with lots of working from home ideas. Of course, the list could be endless, but I’m hoping that by listing ten or so suggestions it will get you thinking about endless opportunities. Depending upon where you live, you may or may not be able to carry out certain lines of business, so be sure to check with your local authorities. You may also need to consider insurances (more about this in later posts).
Lots of Working From Home Ideas
Teach Music
Do you play a musical instrument quite well. Do you realize the number of schools that have bands? and band members are usually required to have lessons for their particular instrument. Get in touch with your local schools and let them know you’re a local teacher. Get a few students on board, and if you’re enjoying yourself and you’re good at it, just watch your student list grow.
Dog Walking
It never ceases to amaze me, the number of people who have dogs but just can’t be bothered exercising them. If you’re a dog lover and like to exercise (yourself, as well as dogs) then how about letting your neighbors know that you’re starting business as a dog walker. Put out some notices in your local area too. The dogs will love you, and so will the owners.
Hair Cutting
Did you used to be a hair dresser, but maybe the hours didn’t fit in with your children’s schedule? Why not start a business as a traveling hair dresser. You can go to clients, or they can come to you. Think about all those mums who don’t have time to go to a hair salon, or it’s too much trouble with the kids in tow. And don’t forget about elderly people who just can’t get to a salon. Many aged care facilities use traveling hair dressers to meet their ongoing needs.
Web Design
If you’ve already created a couple of websites for yourself, and enjoyed the process, then why not help other people to do the same. People are paying for new websites to be created every day hour.
Fix Computers
Computers are now common-place in the home – and most of us can’t do without them – and if they break down we go into panic mode. If you’re good at fixing computers then there’s a market for you ready and waiting. You can have people bring their computers to you, or you go to them. You decide, but I’m telling you, a market exists for your expertise.
Book Keeping
I love keeping track of my businesses finances – but a lot of people don’t. If you too enjoy and are good at book keeping, then why not make a business out of it and help other people sort out their business finances. Their accountants will love you for it – and so will they. (I’ll be doing a post about book keeping at a later date, to try and inspire you to do your own books. Watch this space!).
Painted Pot Plants
I have the most beautiful painted pot plant on the pool deck and visitors often comment on how special it is. I bought it from a lady who hand paints them and sells them from her home. Her home is on a busy road and she proudly displays her master pieces for passing vehicles to see. Hey, it worked. I bought one…and judging by the number of years she’s been there, and by the constant updating of stock, she’s doing ok. I take my hat off to her!
Write an Ebook
For those of you who aren’t sure what an ebook is, it’s a book about literally anything that’s available on-line. No need to get the book published, it’s available to down-load at the click of a few buttons. If you are knowledgeable about a certain topic/subject, then why not write an ebook and sell it online. Thousands are doing it, so why now you?
Conveyancing
I swim several mornings a week and over the years have got quite friendly with other regulars. One particular lady does conveyancing, from home. She left her conveyancing paid job to look after her young family, but occasionally helped out friends and neighbors with conveyancing. What started as a favor to friends and neighbours has turned into a successful home business, carried out at times suitable to her and her family.
Hopefully, this post has given you a few things to think about and maybe sparked some working from home ideas of your own. You might like to also check out Part 2 of this post.
Let me know what you’re good and passionate about in the comments below. Thanks for reading.
August 17, 2009
If you’re working from home, or contemplating working from home, you may have been thinking about registering a business name. A business name can help distinguish you from your competitors and ensure you are creating the right image for your business. It’s the name by which your customers and the people you deal with will recognize and remember you.
What is a Business Name?
A business name is simply a name under which a person, or other legal entity, trades. If you want to use a business name other than your own legal name, you may be required to register the business name with your state and/or local government. You may even be required to register your own name, if that is what you choose to trade under. By default, the legal name of your business will be your full name if you are a sole trader. For partnership agreements, the legal name defaults to the last names of the partners. Would Google be as well-known today if it had been called Page and Brin (the names of the founders)? What about Microsoft? Better as Gates?
Does Registering a Business Name give me any Ownership Rights?
A business name registration does not give you any ownership rights to that name in itself. Only a trade mark gives you that kind of protection. So if you want exclusive use of your business name you would also need to register a trade mark. I will be talking more about trade marks in future posts.
How to Register a Business Name
So, how to register a business name. You will need to check availability of business names in your location. The easiest way to do this is to carry out an internet search on “registered business names” and look through data bases. If you live in the US, this link is a good place to start. Even if a business is already operating under a name you would like to use, you may still be able to use it if the existing business offers different goods/services to you or they are located in a different area. Depending upon where your business operates, laws may vary, so check with your state/government to make sure you comply with regional policies.
Does it cost a lot of money?
Not really. For something as fundamental as your own business name, it does not cost a huge amount of money. There will be a fee to pay when you register your business name, in the region of $100-$300, and there is also an ongoing fee, payable every 2 or 3 years – check details for your particular location with your state/government. There are companies who will search data bases and register your details for you, but they will of course charge an extra fee for this service. I have not personally used the services of such companies as I found it quite straight forward (and cheaper) to do the search and register myself. You decide what is the best option for you.
What happens next?
That’s up to you. But I suggest you get down to some business!
You can leave feedback/comments about this post on How to Register a Business Name below.
August 4, 2009
If you’ve decided to work from home (and in doing so intend to earn some money – which I assume is the idea) it might be a good idea to set up a separate bank account purely for your home business. All monetary transactions can then be directed in and out of this account.
Opening a business bank account may not be something you’ve thought about doing at this stage but, as in many situations, it’s easier in the long run to set things up correctly from the start. Having said that, you don’t want to get carried away and set up an account with more features (and costs) than you need. More about that further in the blog.
The main advantages of opening a business bank account are:
How much does it cost Opening a Business Bank Account?
You’ll generally have to open a new business account with some money. How much you initially put in will of course depend on what your expected start up and running costs are likely to be be. But, remember, whatever money you put into the account from your personal money is in effect a loan to your business, which you can take back out at a later date, once your business is making money.
Check out the different types of business accounts that are available and shop around with different institutions to find the best deal for your circumstances. Don’t sign up for an account with more features than you need as you may find yourself paying for things that don’t give your business any value or benefit. Some banks charge fees for merchant services that may be useful and relevant when you’re making $000′s, but are over the top when you first start out. Go give some thought to how your home business will initially function and choose the right account for you. You can always update at a later stage, if necessary.
Things to consider might include:
- What will your customers want? What’s the most likely way you will be transacting with them?
- Do you need to be able to accept credit card payments or will an online service such as PayPal provide that service?
- Is an overdraft facility necessary or can your own funds keep the account in the black and cover costs until you start making profits?
- Would you be better to choose an account with a set monthly fee and free transactions, or pay for each transaction and pay no monthly fee? Or a combination of both?
- Should your business account be with the same bank/institution as your personal account? Would this make it easier to transfer money between your linked accounts? Do transfers between linked accounts cost anything?
In the early months of running a business you may need to keep topping up your business account from personal funds. By doing this through the bank account there is a permanent record of the money going in – so you won’t forget how much the business owes you, once it starts making a profit.
Credit Card Transactions
Having a separate credit card for your business may be the best option for you, but there is no reason why you can’t use your personal credit card for business purchases. If this is the case, make sure you split the payment between personal and business at the end of the month when you pay the bill. If the total bill is, say, $1,000 and $250 of that amount is for business purposes, then make sure the $250 is paid directly out of your business account. This can be done by writing a business check, phone banking, internet banking or however you usually pay your credit card. I am of course assuming you always pay your credit card off in full – which I hope you do. Remember, if you don’t, you’ll also need to work out how much of the interest next month has come from the business related spend – and that’s starting to get complicated! Better to just pay it off in full if you can.
Money Received – Money Spent
Any money the business receives should go straight into the business bank account, whether it be cash, check or money received via internet banking. Likewise, any money the business has to spend should be done via the business account either by check, internet banking or credit card (mentioned above).
Petty Cash
There will often be small items you need to buy for your business that require a cash transaction. For this reason, it’s a good idea to have some petty cash to use specifically for business purposes. Again, this should be done via the business bank account. Draw out, let’s say, $100 cash from your business account and keep it in a safe place. When you need to buy small items, use this cash and keep all receipts to account for the expenditure. If the petty cash funds are running low, draw more cash out from the business account to top it up.
Book Keeping
Book keeping will be all the more easy to do when all your monetary transactions are in the one place – your business bank account. If you choose to employ the services of an accountant at financial year end, then you’ll make his/her life easier as well, which generally means a smaller bill, which has got to be a good thing.
Future Blog
I’ll be writing about Book Keeping for your Home Business in a future blog. It’s easier than you think, and it will keep your costs down and make your accountant even happier! But the first thing to do is open a business bank account.
Thanks for reading my opening a business bank account blog. I hope you’ve enjoyed and learned from reading it. Please send me your comments below. Thanks.
July 29, 2009
