Designers Toolbox: Navigating Business Finances, Grants, and Credit

00:00 – 00:04 Welcome to the designer’s plants and coffee podcast where we discuss how to succeed as a designer 00:04 – 00:09 while staying true to yourself, finding peace in the process, and making money doing what we 00:09 – 00:14 love. Subscribe on YouTube and wherever you get your podcast. Question, how do you prep prepare 00:14 – 00:16 for taxes, federal and state? 00:16 – 00:22 Get a federal tax ID number. It is free. They start charging taxes by the penny, so get a tax 00:22 – 00:26 ID. And keep good record Because at the end of the year or the end of the quarter, you don’t 00:26 – 00:27 have to come with those records. 00:27 – 00:34 See, I use, Quicken, and that actually keeps track of all of my business Expenses. Because the 00:34 – 00:39 one thing I will definitely say, if you are a entrepreneur and you’re doing, let’s say some 00:39 – 00:45 of your clients with the 10.99, You’re not paying any taxes, so you need to make sure that you 00:45 – 00:52 have enough expenses and deductions to counterbalance out. You can actually look up on IRS website 00:53 – 01:00 and give an idea of the percentage of taxes that you should be putting aside. Also, putting 01:00 – 01:08 some money aside for social security. Banking tax and unemployment. You really because if If 01:08 – 01:12 anything ever happens, you wanna make sure that you’ve kinda put money in that little bank. 01:12 – 01:17 So did you guys set up a LLC, sole Prior to Escort, what did you guys set up? 01:17 – 01:24 LLC over here because I actually took a class, and it explained it. It broke it down. And the 01:24 – 01:28 difference is LLC, they can’t come after your personal property. Right? When you get an LLC, 01:29 – 01:35 if the business goes Under, it happens, and you owe people, the government can’t come for your 01:35 – 01:39 house because it’s not a business asset. A lot of people think sole proprietorship is the way 01:39 – 01:43 to go, and and I’ve Even hurt people say, well, I don’t own anything, but you will. 01:43 – 01:49 I did LLC as well, and it was only a couple of $100 if I remember because I kinda just just 01:49 – 01:55 renewed it. I also filed for trademark, registered my name, the business name. So that’s another 01:55 – 02:02 thing. You definitely Want to make sure that you’re actually looking on patents and trademarks, 02:02 – 02:08 and you want to make sure you are checking to see does anyone else Have your name for the product 02:08 – 02:10 that you are actually selling. 02:10 – 02:15 The the first business that I had, I did as a s corp. Mhmm. It was just too complicated in terms 02:15 – 02:21 of keeping track of all of the the paperwork and the filing that you had to do. Yeah. But my 02:21 – 02:28 second one is a LLC. I am electing to File taxes as an escort because it protects your money 02:28 – 02:32 better instead of putting it with your, personal money. We are not accountants. 02:32 – 02:33 Right. 02:33 – 02:40 We’re CPAs. Right. So speak with your accountant or your CPA and see the best way to structure your business. 02:40 – 02:45 As Tedious as it sounds, you do have to keep up with latest in tax law. That’s just a necessary 02:46 – 02:48 thing if you wanna not be audited. 02:48 – 02:53 And I was ordered at one time, and it’s not fun. I think we had to go about 7 years back. 02:53 – 02:54 Mhmm. 02:54 – 02:59 It’s insane. Listen. Keep your records. Keep all your receipts. You know, file it on a, like, 02:59 – 03:03 a weekly, monthly basis, so and make sure you have everything. You can hire people to do it 03:03 – 03:07 for you, but if you’re starting out, probably do it yourself. Yeah. 03:07 – 03:12 Like Leticia said, QuickBook, Quicken, if you can’t afford that software, Excel does wonders 03:12 – 03:17 with math. You can break your Excel sheet down into categories, and, you know, you know what’s 03:17 – 03:22 going out, you know what’s Coming in, just set aside that one day where you compile all of your 03:22 – 03:27 stuff for that month. I use Square, and they do very good with keeping the records for me. Right? 03:28 – 03:32 They look at the tools on your website. Look at the tools on your PayPal has a similar tool 03:32 – 03:33 if you accept PayPal. 03:33 – 03:38 Stripe as well as most places that collect Money because they have to report it as well. They 03:38 – 03:43 keep records for you. So just use that to your advantage. Yeah. This leads us into the next 03:43 – 03:47 question. Do you set aside funds or do you pay quarterly Or do you pay annually? 03:47 – 03:48 Right now, I pay annually. 03:48 – 03:53 I’ve been paying annually, but going forward, I would like to start paying quarterly I’ve heard 03:53 – 03:59 that it’s better in terms of, keeping track of everything, and it’s better in terms of taxes, 03:59 – 04:01 you know, how much they tax less than what they tax. 04:01 – 04:06 And along with that, we keep talking about the money you bring in. Keep a record of the money 04:06 – 04:11 you put out. It’s just as important to keep track of the money you put out because you’d be 04:11 – 04:16 surprised at things that you can write off. Every time I buy business cards or or labels or 04:16 – 04:20 envelopes. All of those things go into that spreadsheet. Speak with an accountant if you have 04:20 – 04:22 1. TurboTax is really good. 04:22 – 04:23 Right. Right. 04:23 – 04:28 With your business taxes, pretty inexpensive as far as taxes go if you can’t afford an actual 04:28 – 04:33 accountant. Look into TurboTax. Look into H&R Block. Look into look into these places that offer 04:33 – 04:39 these discount on how to do your taxes because it’s tedious, but You don’t wanna get caught 04:39 – 04:40 in an audit. 04:40 – 04:44 So we wanna move on to the next question. How did you access start up funding? 04:44 – 04:50 For me, my start Your funding was whatever extra money I had laying around to invest into my business. 04:50 – 04:55 That’s yeah. I mean, my family, they helped me when I was doing, like, shows and, you know, 04:55 – 04:56 setting up stuff and all that stuff. 04:56 – 04:59 You know, the bulk of that money is gonna come out of your pocket. So it’s another thing you 04:59 – 05:04 wanna think about. Think about how much you can really put out How much can you really afford 05:04 – 05:09 to invest in this business? Because it’s more than just the making of your product. I wait until 05:09 – 05:14 the site that I get my labels from has 40% off Sell right? And then I stock up. So it’s just 05:14 – 05:18 little things like that that you have to think about. Think about buying in bulk where you can. 05:18 – 05:23 Think about wholesalers where you can. You’re making bags. It’s Some great wholesalers where 05:23 – 05:27 you could get zippers for, like, 79¢. Really, really research. 05:27 – 05:31 You know, question everything because that’s how you learn and that’s how you do the best thing 05:31 – 05:33 that’s gonna work for you. 05:33 – 05:38 You know, a lot of the web hosts have now built these things into their platform so you don’t 05:38 – 05:43 have to have several different things To get your newsletter out, to get your emails out, to 05:43 – 05:46 get your receipts printed, you can do it all in one place, which is great. 05:46 – 05:50 Tish, did you at one point get, funding for, like, machines for 05:51 – 05:58 I actually got a mini grant. So I filled out grant application, won, the grant and received 05:58 – 06:04 to start a sewing camp, to purchase 16 machines, a bunch of fabric, and they kept renewing it. 06:04 – 06:09 So the 1st year, I got the sewing machines, the fabric, and I had the, classes Free. Then the 06:09 – 06:15 next year, we order more fabric, more patterns. So that’s how I did the sewing academy. That’s 06:15 – 06:22 but with the Keeping you in stitches and the consulting. I actually applied for a business, 06:22 – 06:26 a checking account through Navy Federal. When I was getting my invoice, because I wasn’t using 06:26 – 06:31 it all the time. I was sending the invoices to my personal account. I’m like, if you don’t send 06:31 – 06:36 it to your business account because with, Navy Federal, you know, it’s It’s all about community 06:36 – 06:41 and then they like to see the money come in and you paying the bills and everything in order 06:41 – 06:47 to get the business credit card. But also with the business credit card, you also, there you 06:47 – 06:54 also need to get have a really good business, credit score. But you can start out really small 06:54 – 06:59 by it’s like 3 different types of, companies that you can open up business accounts. They will 06:59 – 07:05 report to your business credit agencies, and they will help to build you up your score. Uline, 07:05 – 07:10 Grainger, and I can’t remember what the other one is, But you can actually order supplies through 07:10 – 07:16 there. They, generally like to do, like, a net 30. You pay the bill, like, within 30 days. And 07:16 – 07:21 every time you pay it, they report they’re reporting to the credit agencies. That’s like the 07:21 – 07:26 bottom tier entry level of how I would say if you really wanna get business credit, to Start. 07:26 – 07:31 If you do that for about maybe 6 months, your credit score will begin to go up, and then you 07:31 – 07:36 can actually try to apply for, business credits and, credit cards or business loans. 07:36 – 07:42 And to piggyback on that, I know Amazon has a business, site where you can apply to be a business 07:42 – 07:47 account holder. And Square And PayPal both have checking accounts where you get this business 07:47 – 07:52 checking account. You get the credit card. You use that credit card for your business. 07:52 – 07:55 Another question to us, how did you on the grant to get just the machines. 07:55 – 08:00 K. So DC government actually puts out, I wanna say maybe every month, they put out a newsletter 08:01 – 08:06 of a list of All of the grants that are available based on, let’s say, education, arts, you 08:06 – 08:11 have to look out for it and really get the emails, the newsletters, and Make sure you just stay 08:11 – 08:17 on top of what’s coming out, when the closing cycle is. But also even writing a grant can be 08:17 – 08:23 a bit intimidating. So Fiverr, get Some help to write and apply for grants because it can be 08:23 – 08:28 quite intimidating. Also, with the federal government, you can actually apply for grants and 08:28 – 08:33 loans as Small business grants and applications from from the federal government. 08:33 – 08:37 Because I’ve also gotten a creative grant from the DC government, and they they do this Brand 08:37 – 08:41 every year. So you have to use it towards your business. Another thing that people forget is 08:41 – 08:46 you do have to report. You don’t have to report with receipts Or say what you’ve done with it. 08:46 – 08:51 Just follow the instructions to the letter. Yes. And they will give you that grant. Every word 08:51 – 08:53 they Type. You type. 08:53 – 08:56 You can literally get a grant for just about everything. 08:56 – 09:02 We all get 50,000,000 emails a day. Put those grant emails at the priority. Get a separate email 09:02 – 09:06 address for your business just for your brand information, just for your pop up information. 09:06 – 09:11 If you apply for your domain name, take that domain name And get a email address. 09:11 – 09:16 There’s another question. It says, when pricing your merchandise service, do you use a formula, 09:16 – 09:18 and how do you set your profit margins? 09:19 – 09:26 Generally, we don’t have those those high priced names yet. And so we can’t charge $34100 for 09:26 – 09:31 certain things. You know, if I’m putting a lot of work into it, like, if I’m making a custom 09:31 – 09:35 jacket or something like that, yes, I’m charged a lot. Because the materials are also different. 09:35 – 09:42 Right. Some of the vinyl and, vegan leather I use might run me $30 a yard. So you have to factor that in. 09:42 – 09:46 When I was doing product, when I was actually making things, What I did was cost of goods sold. 09:46 – 09:53 So basically, all of my, fabric notions, all that stuff, put all that together, put the, The 09:53 – 09:57 rate together, the hourly rate, how long it took, and basically triple that. So say for instance, 09:57 – 10:02 everything costs $10, so you would charge 30. You’ll charge 20 for wholesale If you’re selling 10:02 – 10:08 to stores but actually, you actually, you would charge 40 for retail because wholesalers gonna 10:08 – 10:12 double what they pay. So say for instance, they buying it for you from from you for $20, they’re 10:12 – 10:16 gonna sell it for 40. So you have to sell it for 40 on your site. And in terms of services, 10:17 – 10:23 for my agency, the region design agency, I have packages. So I don’t charge hourly. I charge 10:23 – 10:28 per package. But when I do freelance, I do charge per hour. I give them a range and per hour, 10:28 – 10:32 and that’s it. It depends on the service. It depends on the product, and depends on what you’re selling. 10:32 – 10:37 Don’t be afraid to ask for what you think your stuff is worth. Don’t be afraid. I had a $10 10:37 – 10:41 item Other day, and the girl’s like, $10 for this? Well, I guess since it’s handmade. And I 10:41 – 10:43 was like, but you don’t have to buy it. 10:43 – 10:43 Wow. 10:43 – 10:46 Uh-oh. You’re going to get people Who are 10:46 – 10:51 telling you that your things are too expensive. You’re also gonna get people who are telling 10:51 – 10:52 you you’re not charging. 10:52 – 10:56 And you’d have to be comfortable with how much you’re charging as As long as you’re making money 10:56 – 10:59 on your product and you’re not just breaking even Right. You’ll be fine. 10:59 – 11:05 And you have to comfortable saying, no. I’m not going to Give you a discount. When you’re selling 11:05 – 11:09 a product and you’re doing pop ups, a lot of people tend to think that small business owners 11:09 – 11:14 are desperate for money and will take anything, and most of us are not. Most of us know our 11:14 – 11:17 worth, and it takes us a while to get there. When you’re selling a product and you’re doing 11:17 – 11:23 pop ups, a lot of people tend to think that, Small business owners are desperate, you know, 11:23 – 11:28 for money and will take anything, but you know what your products are worth. You know what that 11:28 – 11:32 labor was like. You know What blood, sweat, and tears you put into it. So don’t be afraid to 11:32 – 11:35 say, no. I can’t sell it for that. And don’t say, I’m sorry, when you say, no. I can’t sell 11:35 – 11:37 it for that. Don’t apologize. 11:37 – 11:44 So if you have any questions on anything, fashion business related. Please send it to us via 11:44 – 11:49 email, via Instagram, or reach out to one of us on our websites. Just let us know. We will be 11:49 – 11:51 glad to answer all your questions. 11:51 – 11:58 I’m Leticia Winston of keeping your stitches with Naima Dozier of fearless threads And Zahir 11:58 – 12:02 Dulkare with Regent Design Agency in Cover Me Chic. Next time.