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How not to wreak havoc on your creative business!



As a creative entrepreneur financial planning often seemed daunting and was mostly overwhelming. While I did enjoy budgeting (for the most part!), I was unable to forecast my income with any certainty. Can you relate? How often are you left feeling anxious at the thought of staring at spreadsheets and crunching numbers?


For the first year of my business, there was no method to my madness. After a switch from a traditional job setup, I pursued my passion of seeing concepts come to life and started an event decor company, The Poppy House Co. The creativity came easy, but the rest was a struggle. I was functioning in survival mode- finding customers, finding vendors, building an inventory, hiring a team, finding an office space, building social media pages.


Ultimately, financial planning took a backseat and I ended up with a stack of unpaid bills and a major government tax default notice. My negligence and carelessness almost cost me my entire brand but it also helped me get a grip of my finances, get educated and make informed choices.


They say: “Give a man a fish, and he’ll eat for a day. Teach a man to fish, and you’ll feed him for a lifetime.” But what if that man doesn’t know what to do with the fish once he catches it?

When you understand how your business finances work, you’ll know what to do with “the fish”—in other words, the money you’re earning and spending.


Here’s my cheat sheet on financial planning:


1.Build all your essential financial skills for success:


a) Separating Personal and Business Finances: The first, and easiest, step is to separate your finances. This can help in streamlining your financial management, simplify tax reporting, and provide you with a clearer understanding of your business's financial health. Choosing the right bank account here is key. Not all banks offer the same services and some may even tailor their services around your business needs, while others may have a more standardized approach.


Questions to consider:


• Do they offer online banking?

• What do they charge to conduct business transactions?

• What interest rates do they charge? (Eg. to take out business loans)

• Can they offer you a business credit card?

• Can they help you add other people and permissions to your account as your business grows?


b) Budgeting Techniques: The financial road is paved with bumps, but you can avoid surprises by building a solid budget and by efficiently keeping track of your money. Muster up the courage and create a sample budget and as you keep tweaking it over time, you will know what to expect. Soon it will become easier to budget, and you’ll get better at forecasting expenses and revenues.


A great budgeting practice, suggested by experts, is to spend 50% of your after-tax income on needs, 30% on wants and 20% on savings. This method is best utilized when a budgeter is less focused on specific line items and more on the big picture.


Creating a budget based on this rule isn’t a one-and-done process. You’ll review your income, assess your current spending habits, set goals, and then adjust your budget regularly. Here’s how to get started.


i. Calculate your after tax income- Check your bank account, tally all the deposits for the month and then deduct the amount you’ll need to set aside for business expenses and taxes.


ii. Categorize how much you spent in the past month: Split your expenses into- needs, wants and savings. Remember, a need is an essential expense that you can’t live without (Eg: rent). A want is an additional luxury that you can live without, (Eg: dining out). Savings are additional debt repayments, or money that you’re saving for a rainy day.


iii. Evaluate and adjust your spending to match the 50/30/20 rule: First, calculate how much you spend on your wants. A want is not extravagant—it’s a basic nicety. Since needs are more challenging to cut back on, you would rather reduce your wants. The more you reduce how much you spend on these additional niceties, the more likely it is that you’ll be able to hit your 20% savings target. (Tip: Microsoft Excel, Google Sheets and Apple Numbers all offer templates that can come in handy to categorize your expenses)


c) Tracking Income and Expenses: Diligently monitoring your income and expenses is essential. Use tools like ZohoBooks or Goodbudget to simplify this process.


d) Understanding your taxes: Now it’s time to address the elephant in the room…Taxes!. With the implementation of GST (Good and Services Taxes), you need to now register your business, read up on taxes that apply to your business and remember to file your taxes on TIME through their online portal (it’s shockingly easy to navigate!). Warning: there is a late fee for anyone who puts this off so don’t forget to put this on your to-do list. Ascertain the tax deductions and credits that are particularly relevant to the nature of your business such as supplies, studio space, marketing costs. Also maintain accurate and organized financial records, including invoices, receipts, and transaction logs to enable easy filing of your taxes. ZohoBooks is also great for online bookkeeping and accounting. Even if your finances are being managed by your parent chartered accountant, or a business manager, being aware of these nitty gritties can help you manage and plan your business operations.


2.Nurturing a Growth Mindset:


Financial management is not solely about numbers and spreadsheets; it is also about cultivating a growth mindset that fosters financial success.


a) Setting Financial Goals: It is important to set specific, measurable, attainable, relevant, and time-bound (SMART) financial goals. These goals can provide direction, motivation, and a sense of purpose to your financial journey. Start by setting small goals and holding yourself accountable to them.


b) Pricing your work and services: It can be tricky in the beginning to ascertain the value of your time in order to price your services, especially when you may lack experience and have less work. You must know what you bring to the table and also know the value of your time to price fairly! Consider factors such as cost of materials, time invested, market demand, and perceived value to establish fair and profitable pricing structures.


No one size fits all, so remember the path to financial success is unique to everyone. Tailor these strategies to your specific needs and circumstances.


By acknowledging your personal challenges, learning from your experiences, and implementing practical strategies, you can find a safe balance and become better informed about your finances.







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