My Etsy shop beginnings were rough. The products were of the amateur quality. The listings and photos were thrown together. The tags and titles were created with absolutely no intention or strategy. Thinking back makes me cringe, but I don’t regret jumping in head first at all. Especially since I made my first sale within 24 hours and went on to sell over $1,300 in my first month.
In that year of selling on Etsy, I literally kept records of my finances written down in a notebook. I printed out the invoice for every order and calculated my profit. At the end of every month, I manually did a profit and loss report.
Nothing was automatically captured, calculated, or recorded – everything was on paper, either in my notebook or my file folders. This system took me tons of time to keep up with and stay organized. With no business background, I was doing the best I could to understand my bookkeeping.
By the end of year one, the time and amount of paper I had put into my bookkeeping was getting a little ridiculous. I was working a full time job, alongside running my Etsy shop, so filed my own taxes online. Thinking back, it likely took me about four hours – I truly had no idea what I was doing and assumed being a business owner meant I needed to figure it out on my own.
Hot Mess Biz
As my business started growing, I realized the finance side of my business was a hot mess. This hobby of mine was quickly turning into something greater, but I hadn’t taken any of the steps to make it legit. I spent hours upon hours on Google trying to find the solutions I needed, but I barely knew what to even search. All the “rules” of business made me feel super overwhelmed, sometimes to the point of tears.
I had been managing everything about my business alone, but when a friend referred me to her CPA, I knew it was time to outsource something and really organize all the not fun, business stuff. CPA stands for “certified public account” and anyone with this title is legally licensed to provide accounting services to the public. They become qualified after receiving hours in education and passing rigorous accounting exams. Basically, they are deemed official in understanding all things accounting and taxes in order to help us regular, non-accountant people and business owners figure things out!
The services of the CPA went beyond just accounting as she helped me register my business with the state and become an LLC. This allowed me to get a sales tax ID, which allowed me to receive wholesale prices when buying materials and supplies for the business.
Every month, I sent the CPA my Etsy records, Paypal transactions, and bank account statements. She set up my business with Quickbooks, which automated a ton of my bookkeeping and saved a lot of time each month.
With the way Etsy deposits work, it was a ton of trial and error figuring out how to properly capture what was a sale, what was a shipping cost, and how to subtract Etsy fees. My CPA was super kind, but we just didn’t speak the same language – she is a very experienced tax accountant and I was a fairly new business owner.
It probably took a year of working with the CPA to finally get my finances in order and a grip of understanding my monthly bookkeeping. She now handles all sales tax for my business and gives me an estimate each quarter of what I should pay in taxes. Paying taxes is seriously the worst, but doing it quarterly is much easier than being hit with a lump sum in April.
The amount of time, frustration, and confusion throughout this process made me feel so overwhelmed and question why I even wanted to work for myself. A lot of creatives consider themselves to be strictly artists or makers, with no “business brain”. I tend to think of myself as being equally business and creatively minded – I love learning about marketing, selling, and branding. However, when it comes to things like licenses, bookkeeping, and taxes – I totally freak out.
My friend Janet at Paper + Spark created the Get Legit Toolkit, which is the perfect solution to every new business owner’s big biz overwhelm. Janet is a CPA, but also an Etsy shop owner, so she gets people like us and speaks our language.
I seriously would have paid some mega-moolah if this resource was around four years ago, when I was getting started. It would have saved my heartache on trying to figure everything out myself. The toolkit is everything you need, all in one place, nicely packaged together. You also get access to Janet’s private Facebook group where you can ask questions. Here’s just a few things you’ll understand once you complete the Get Legit Toolkit:
- Exactly what you need to do to from a financial perspective to set your business up right
- How to organize your business funds, bookkeeping system, and financial documentation sensibly
- What you’re required to do on a state & local level and exactly how sales tax works
- What to expect at tax time and how to prepare throughout the year to avoid any stressful surprises
- The accounting concepts you need to truly comprehend as a successful business owner (and nothing extra!)
- How to feel confident about the money side of your biz and breathe easy in the knowledge that you aren’t missing something important
The Get Legit Toolkit is open for new students, click here to enroll now!
The VIP Toolkit even includes access to my course for beginners – Launch Your Etsy Shop in 5 Days, as well as some other super valuable bonuses. Are you ready to invest in yourself and your business? Don’t wait to get legit – I’ve been there and the longer you delay, the harder it is to do.
Disclosure: I am an affiliate of The Get Legit Toolkit, meaning I receive a small compensation if you purchase using my link. I am only recommending this product because I truly love it! The Toolkit full of value and I truly know how much it will help you and your biz!