If you’re like me, you might have that tax preparation information hot off the presses. Let’s talk about some financial systems you can put in place now that this financial information is available to you as a teacher business owner.
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Read the transcript:
Janice Cook 0:00 Welcome back to Your Win-Win Teacher Business. If you’re like me, you might have that tax preparation information hot off the presses. Let’s talk about some systems you can put into place now that this precious financial information is within reach to you.
Janice Cook 0:20 You’re listening to Your Win-Win Teacher Business, a podcast for teacher authors who want to make a big impact in the world for teachers and students, and have fun doing it. I’m your host, Janice Cook here with a pep talk to start your week off strong. Some seasons of running a business feel hard and sticky, but it shouldn’t feel like that all the time. Let’s make your business a win-win together.
Janice Cook 0:45 Before we get started with today’s episode, I wanted to give a shout out to Linds17 for leaving such a sweet review for the podcast. She said, I love this new podcast. The length is perfect for a drive to the store or whenever I’ve got a few minutes to spare. I feel like I can tune in anytime and walk away with something new to consider about how to make my business better. The tips feel manageable and helpful in a way that’s not overwhelming. Every episode has given me a fresh idea that could make things work more efficiently for me. Thank you. Looking forward to more.
Janice Cook 1:24 I really want this to be our podcast, so please know that it means the world to me when you log into Apple podcasts and share your thoughts about the show, it’s so helpful for other teacher business owners to know what to expect before they push play. Thank you. Thank you. Thank you.
Janice Cook 1:41 Here comes the disclaimer. I am not a tax professional. This episode is here to get your wheels turning. It’s not legal advice. It’s not tax advice in any way, shape, or form, and I know that it will not apply to every single teacher business owner in every season of business. If you have a payroll company or a professional on your team already running this part of the show, take their advice, not mine. But if you’re early on in your teacher business journey and looking for some food for thought, I’ve got some thoughts to share today.
Janice Cook 2:20 As much as you want to run away from taxes the second they are finished, there are a lot of valuable pieces of information available as soon as you finish filing your taxes. So grab a fun beverage, maybe an iced chai latte from a local coffee shop, or a McDonald’s sweet tea if those are an instant mood boost for you, like they are for me, maybe you’re a Poppi or an Ollie Pop girlie. Find something that makes this task feel fun, and let’s take a cold, hard look at some numbers. Tax season is a great time to tweak our systems. Business is a game of doing more of what’s working and less of what isn’t, and like it or not, those tax documents are telling you the cold, hard truth.
Janice Cook 3:10 In January, I let all the snail mail roll in, and I collect all those envelopes that say important tax document. The tax organizer from my CPAs office also arrives in the mail. Thank goodness they stay up to date on all the tax law changes, so I don’t have to. In February, I set the goal to complete my part of the tax organizer. This means treats at my desk and friends in the DMs for solidarity. It also means a reduction in other work projects on my business schedule – I have to make room for this important work. February is a super short month. We know this in advance. Tax preparation needs to happen. We know this in advance as well. Also it’s winter. It’s norovirus season, it’s flu season, it’s ice storm season. In some parts of the country, it’s also school vacation and parent teacher conference season. Your capacity has to be adjusted accordingly in the month of February.
Janice Cook 4:24 On this show, I always give a gentle reminder to be a good boss to yourself. And today’s episode is another one on that topic. Be a good boss to yourself. Pay yourself. My husband has a W2 job. He gets paid on the 1st and the 15th of every month. When he gets paid, I get paid. I pay myself from the business on the 1st and the 15th, or when I see his check hit direct deposit. I. I cannot tell you how many business owners I work with who don’t currently have a regular schedule for paying themselves. Your business is your job. Pay yourself on a regular, predictable schedule, even if it’s a small amount. You might want to look at your leanest month of the year and decide what the amount is that you can always pay yourself and start there. Decide how often you’ll pay yourself and then pay yourself a modest amount on a regular, recurring schedule. Maybe this number comes from your family budget instead. Maybe you need to make X dollars a month in order for the math to math for your family budget. In my situation, I would take that amount and divide by two to pay myself half on the 1st and half on the 15th of the month. You have my permission to be messy at the start with this step, but please make an action plan to pay yourself this year, if you haven’t been paying yourself on a regular, recurring, predictable schedule. You might not get the amount right the first time, but it goes a long way in the right direction, putting yourself on a regular payroll schedule.
Janice Cook 6:30 Something I started recently is the habit of a payroll reserve account, and it’s been one of the most peaceful parts of my business. Let’s say you always pay yourself $1,000 a month, $500 on the 1st and $500 on the 15th. We don’t want you to lose sleep at night wondering what date payments will clear and if you’ll be able to pay yourself on time. A good boss pays on time. A good job brings a predictable payment schedule and the secure feeling that you will be able to pay your bills. How can we create that feeling in a job that has irregular revenue patterns? One system you might consider putting into place is a payroll reserve account. Let’s say on January 1st, you have $600 in new revenue, but your plan is to pay yourself $500 you can place that air quotes “extra” $100 into a payroll reserve account. If you consistently do this every payday, paying yourself the consistent, predictable $500 amount, regardless of whether it was an extra good month or an extra challenging month in the business, you’ll sleep at night knowing how much you’ll be paid and when you’ll be paid. You have a plan for that extra money that isn’t emotional or impulsive. If one month you need to pay yourself $500 but your newly earned revenue is a little bit shy of $500 you can make up the difference by pulling a little bit out of that payroll reserve account.
Janice Cook 8:22 I like to rename my bank account with a goal. That might be one month equals $1,000. I might want there always to be at least $1,000 in my Payroll Reserve and the name of the account might give me that visual reminder not to let the account dip below that amount. If it does dip below that number, I know it’s time to take a step back and look at my financial systems and make a plan to find out why the business is not generating enough revenue to pay myself the salary I’m used to. Given the volatility of the summer months in the teacher niche, you might decide that 90 days or three months of your salary is the amount that brings you peace to hold in a payroll reserve. You get to choose this number, the number that feels safe and secure to you. But if you don’t have a payroll reserve system in place. Maybe this is the year you give it a try.
Janice Cook 9:25 If after a full quarter of paying yourself $1,000 a month, your payroll reserve is fully funded, you might decide to give yourself a raise and try paying yourself $1,100 a month. You have a system, an if / then way to decide, without emotions, about what you can afford. You have a date on your calendar to make that data driven decision.
Janice Cook 9:54 Like all systems, this is an idea. It’s an experiment. If you feel like this might help bring you more peace, give it a try, but please pay yourself something. Know that business revenue has both ups and downs, and have a system in place to weather the storm before those leaner months arrive.
Janice Cook 10:21 When we file our taxes, we have a clear picture of income and expenses. I love to take a moment and step back and look at the income streams objectively. Which parts of my business are bringing in the most money? Which parts of my business are bringing in the least money? Sometimes the answers surprise me. It’s not always the income streams that I’m putting the most blood, sweat, and tears into that are actually bringing in the most revenue. Emotions aside about what parts of my business I enjoy the most, I have to ask myself, would pausing or stopping certain actions in the business make room to really grow and flourish those areas that are already thriving? There’s something about the cold, hard numbers of tax season that really gives us perspective. It’s so different than how we felt during New Year, New Me vision board season. Maybe you started a website store to bypass the TPT marketplace commission and fees, but later learned that driving traffic to that store was harder than you expected, and the taxes side of that adventure, it wasn’t for you. Maybe you loved making a certain type of digital resource when they were in high demand during distance learning, but paying the fees associated with those third party platforms no longer makes mathematical sense in the current day. Maybe you loved the creative outlet of designing T shirts, stickers, or notepads, but the profit margins were slim when compared to spending the same amount of time on your digital offerings. If you took time back from some of those projects, what potential could you achieve with those income streams that are working well?
Janice Cook 12:23 and we get to look at our expenses objectively too. Can I run a leaner business by putting any services, support, or software on pause to evaluate if I truly still need them? Do I actually need a paid Zoom account? Do I actually need to pay for Canva? This professional development community that I joined, am I actually using it? Do these tools align to the goals I’m currently working towards and the tasks that are currently on my desk? What were my largest expenses last year? Are there more cost effective ways I could gain the same transformation? Are there any buying patterns I can identify? Do I purchase out of FOMO because a cart is closing but then never open the resource and take action? Are there certain places where purchases temp me, like Facebook, Instagram, or even my email inbox?
Janice Cook 13:26 Taking the time to really face the music and ask myself these questions always pays off, because it’s only February, and the goals that I set out for the year can still be adjusted. If I’m off track and I’m unlikely to make it to my goal, I could know that by the third month of the year, I could still have 10 months to go to try something new. I don’t need to let the whole tax year go by and fall into the same patterns and the same potholes that I tried last year. I don’t need to make the same mistakes I made last year for an entire another year.
Janice Cook 14:16 And then a bonus tip that I want to mention is time tracking. Time tracking tools can be another powerful source of truth. If I spend 80% of my week on action A, but action B is bringing in the most money, then it’s time to really take a hard look at how I’m allocating my time. Personally, my favorite time tracking tool for client work is Clockify, but in my own business, I know I’m not likely to stick to using a time tracking tool consistently long term. So how do I get that information? Well, I use my Asana calendar. It shows me what I actually spent my time on, in the past. I have different colors for different buckets of my business. I can see which months were heavy seasons for batching out marketing content and which months were heads down client work seasons. When I look at the lower revenue streams, I can look back in Asana and ask myself how often I actively worked on growing those income streams. If I poured a lot of time with not much to show for it, then it’s time to make some hard decisions. When I look at revenue streams that were surprisingly profitable despite not spending a lot of time on them, I get excited and curious about what could happen if I opened up a bit more time and focus to make the most of those opportunities.
Janice Cook 15:49 Even if this job is only one of many income streams and not something you 100% depend on, it’s still a job. Please be a good boss for yourself, and make sure you have systems in place to pay yourself a consistent, predictable salary. If a payroll reserve account could bring you peace in the leaner months, give it a try. Put the emotions aside and look at what actions are truly bringing in most of your revenue. And look at where that hard earned money is being spent with the same critical lens.
Janice Cook 16:27 And if you’re a student of my course, or I’ve built a custom Asana workspace for you, then your calendar is a gold mine of information about how you have been spending your time. You’ve got so much information available to you right now. Follow the breadcrumbs, tweak the goals and schedules you have in place for this calendar year. There’s still time. Don’t repeat the same mistakes you made last year. This year can be bigger and better. The data is right there, if we get curious and we ask the right questions.
Janice Cook 17:04 Thanks for making this podcast a part of your day. I’d love to help you find clarity with your next step in business. Go to cookfamilyresources.com/hiring-guide – I’ll also leave that link in the show notes for you. This guide is packed with good news for those days when you feel like you can’t possibly do it all. It might be time for you to invest in paid support, but the truth is, there are a lot of free steps to explore first. After you dive into that guide, I’ll be in your inbox every Monday morning with more actionable tips to help you enjoy running your business again. See you in the next episode.
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