Money Advice for Entrepreneurs from Poshmark Founder, Tracy Sun

If you consider yourself a fashionista, then you are probably well aware of the company, Poshmark. Poshmark is a digital marketplace where you can buy and sell new or used clothing, shoes and accessories. One woman made $15,000 by cleaning out her closet and posting the items on the site. That makes for a sweeeet side hustle.

According to a recent article quoting Poshmark’s press release, the site carries over 75 million items and 5,000 brands and 1 in 30 women in America sell on Poshmark. Since it’s launch in 2011, the company has grown to over 4 million sellers.

I had the great fortune to be able to meet and interview one of the founders, Tracy Sun, at the Hustle 2X event in San Francisco. Hustle is an incredible media and event company for folks like you and me - ambitious, go-getters seeking inspiration and always striving for more.

The Hustle on Money & Mimosas.jpg

The 2X event is a traveling show in 7 cities where Hustle brings together incredible women to share their inspirational stories of success.  The Hustle team was kind enough to offer an opportunity to me and Socialite Renee, to meet Tracy Sun and ask her about her journey to success.

Poshmark co-founder on Money & Mimosas


Here are some of the insights that she shared:

  1. Many of the Money & Mimosas readers would describe themselves as multi-passionate. As a woman who transitioned from science to fashion to tech, what is your advice to our community on creating a career when you have multiple passions and skills? For me, it was important to consciously give myself the freedom to explore. Once I gave myself that permission, I realized that I could bring a different perspective to fields because of my diverse background. It became my super power and unique skill.

  2. Money is always a big topic for business owners. What is your money advice for other entrepreneurs? Learn that it ebbs and flows. The first part of your journey as an entrepreneur is to survive and MAKE money. Once you start earning, then you get into the saving mode which is really really important. Once you have saved a comfortable cushion, then it’s time to focus on growing your wealth. That’s the place where I’m at now and it took a long time to get here.

  3. Do you have a mantra for money? What is your guiding philosophy for building personal wealth? Always be willing to learn more about it and how money works.

  4. What is your #1 advice for a woman who wants to be financially independent? Discover your superpower. We all have one and it will be your #1 tool for success.

Wow, such great insights! To build on her money advice for entrepreneurs, one of my pieces of money advice is to learn how to make money in every possible way you can. Especially in the beginning stages of your business. It is all about THE HUSTLE in the beginning. One easy way to do this is to use Radius Bank’s Hybrid Checking account.


It’s one of the only checking accounts that pays you interest on your balance. Most have zero percent interest which means you actually lose money on balance because of inflation. Click here to learn more about the Hybrid Checking Account.

For more money tips, join the Money & Mimosas Insider list.


This post is sponsored by Radius Bank.

5 Financial Must-Dos If You Are A Brand Ambassador or Independent Contractor

“Empowered women, empower women.”

Introducing Maritza Barrios, the newest Socialite for Money & Mimosas

Introducing Maritza Barrios, the newest Socialite for Money & Mimosas

Money & Mimosas is a movement and on a mission to empower women with the financial tools they need to live their happiest, healthiest, and wealthiest lives. We believe that when women are in control of their money, they are in control of their lives.

As a part of our mission, we are committed to providing women with opportunities to advance their careers and build wealth. And we are so excited to be in a position where we can add our newest team member, Maritza Barrios.

Maritza is the reigning Miss San Jose with a goal of becoming Miss Universe. She is a rockstar brand ambassador and manager who has worked with over 200 brands. As she will say, she is “totally not a 9-5 type gal” and works tirelessly to create a unique career that allows flexibility in her schedule. Click here to learn more about Maritza.

Maritza, Socialite for Money & Mimosas

If you’re like Maritza, being a brand ambassador/independent contractor may be the best career fit for you. Here are some practical steps to take to set your career path up for success.

  1. Open a bank account. This should be solely dedicated to your brand ambassador projects. Every brand has a different pay schedule and it’s imperative that you keep all of your hours/payments organized and in one place. Our favorite bank account for this is Radius Bank’s Hybrid Checking. Unlike most checking accounts who offer zero percent interest, the hybrid account actually pays you for the money you deposit into it. Cha-ching.

  2. Calendar your payment dates and follow up a couple of days prior to confirm. This will help you manage your cash flow and plan for things like bill payments. Nothing is worse than expecting a payment on a specific date and it not being there!

  3. Set up an accounting system. As a brand ambassador and independent contractor, you are your own business! Be a boss and use a program like Xero or Freshbooks to keep track of your business related expenses and invoices.

  4. File for a business license. When you first begin as an independent contractor, keep it simple and file as a sole proprietor in your local area. Once you earn $70K+ gross (before taxes and expenses), it will be time to start considering a change in your business entity status to a LLC or S-Corp.

  5. Weekly money date. You already know that we PREACH having a weekly money date. The biggest step to remember during your date is to transfer a percentage of your earnings to your savings account. This is especially important as an independent contractor because there will be times when the cash coming in is lower than usual. You can avoid stress during these times by boosting your cash reserves.

    For more money tips, join the Money & Mimosas Insider list.


This post is sponsored by Radius Bank.

How to choose the right business bank account

Do you need a business bank account as a blogger and entrepreneur? If you are a sole proprietor, you are not legally required to have a business bank account in order to own and run your business. (This is according to U.S. law for sole proprietors. To be safe, do some homework and check your state’s regulations on this topic.)

However, it is helpful from a clarity and an organizational standpoint to separate your business finances from your personal money.

If you want the money in your business to grow, you must give it a safe place to do so. 

Having a separate account for your business finances, allows you to be able to quickly monitor whether your money is growing or depleting. Not to mention that makes tax filing easier - and the audit process, if that were to ever happen.

Everyone mixes up their money from time to time, but get the sooner you begin the practice of keeping them separate, the sooner you will have a sense of clarity around the money in your business.

Wealth Wednesday on Money & Mimosas.png

 

Some banks do charge a fee to open a business account or require a minimum deposit amount. If either is not feasible for you, and you are a sole proprietor,  you can choose to use two regular checking accounts. Dedicate one for your business expenses and the other for your personal funds. We are a big fan of the hybrid-checking account with Radius Bank because they actually earn interest on the money in your checkings.

When it comes to choosing a business bank account, use the following questions to guide your decision process.

  1. How many ATMs do they have? (If you travel a lot, you may need more ATM locations.)

  2. Does your current personal bank offer a business account option? If so, what deals can they offer you?

  3. Does the bank support your local community? (A smaller bank or credit union may be the best fit. if this is important to you.)

  4. Are there any annual fees?

  5. Is there a minimum account balance that you need to maintain? If so, what are the fees if you fall below the minimum balance?

  6. Does the bank offer SBA loans or other funding opportunities for small business owners?

  7. Do they link to any bookkeeping programs? If so, which ones?

Opening a business bank account is a big step in your entrepreneurial journey! Have you opened one or thinking about it? Let us know in the comments, below!

Want more tips like this? Click here to join our Insider List.

This post was in partnership with Radius Bank.

Is it time to hire someone?

It’s common for entrepreneurs to bootstrap during the first few years of business. But eventually, you'll start asking yourself "am I ready to hire someone?"  After all, you’re the sales and marketing team, the bookkeeper, the janitor, IT, the negotiator, the president and the assistant, the graphic designer, the publicist, the agent… 

Oooo weee. When you can you sit down and take a break?

Hopefully sooner rather than later, you’ll be able to outsource some tasks to other professionals. It’s a wonderful feeling when you’re able to take a load off your plate and at the same time, help support another person’s financial goals..

So, when is the right time to outsource?

Here are the five key considerations to help you make the decision.

Wealth Wednesday on Money & Mimosas

 

  1. Am I financially prepared to hire someone? Look at this on a monthly basis and make sure it’s something that you can incorporate, knowing the income that will be coming in. For your first few hires, aim to bring someone on as a independent contract on a per project basis. This will help you keep your costs low and learn how to articulate clear deliverables. Sometimes, business owners take out a loan to help with cash flow if they need to hire folks before the expected revenue makes it to the bank account. If you are considering taking out a loan, check out Radius Bank. They are a preferred SBA lender, loans that are focused specifically on the small business owner’s needs.

  2. Is the task you’re hiring out for something that takes a lot of time? If something takes you 10 hours, versus it getting done in 2 hours by a professional (example: graphic design), the cost is probably worth it. Those 10 hours would be better spent selling or servicing your clients.

  3. Will the work enhance your business? Sometimes it may feel like hiring a graphic designer or copy editor isn’t worth the money because it isn’t directly affecting your sales process. But investing in your business is a sure-fire way to up your entrepreneurial game and attract more paying clientele.

  4. Does the person understand your vision? The more people you surround yourself with and allow to be a part of your business journey who believe what you believe, the more aligned you will be to your mission and goal.

  5. Are they connected to any business owners that could use your services? This is an easy place to get referrals that is usually overlooked. Often times we ask clients for referrals, but what about the people we pay? By helping you make more money, they are increasing the likelihood that you will hire them again and again.

Want more tips like this? Click here to join our Insider List.

This post was in partnership with Radius Bank.

 

17 of your biggest money questions, answered!

One of our favorite things to do at Money & Mimosas is to listen your questions about money and help you find the answer to them. Here are eighteen of the most asked questions we had from you about managing your finances as an entrepreneur.

Wealth Wednesday on Money & Mimosas

 

  1. What kind of money goals do should I set? There are five categories for financial goal-setting.  Earning, Saving, Investing, Spending and Giving. Ask yourself how much do you want to earn and by when; how much of your earnings do you want to save and invest; what do you want to spend your money on (and yes, a brand new wardrobe is a great goal); and how will you use your earnings to give back to the causes you care about.

  2. What is the first step in setting money goals? The first step is to get clear on your priorities. Want to buy a home? Increase your investments? Redo your wardrobe? Launch a business? Is this in the next year? Or five years from now? Figure out where you want to spend your money, and calculate how much you want to spend in each area and in what timeframe. The total will be your money goal.

  3. How often should I set money goals? I recommend setting one goal for the year. And three-month money goals throughout the year.

  4. It's really hard for me to save money.  How do I get better at saving? Most of us have trouble with this! Automate and use a separate savings account. During your weekly money date, commit to transfer a fixed percentage of your earnings into your savings.

  5. I'm really good at setting money goals, but it's hard for me to keep them. How do I stay on track?  Find a money friend aka accountability partner.  This could be a spouse, friend or colleague. If that doesn't feel comfortable to you, check out money groups, such as the Money & Mimosas BOSS club,  to find other people that are passionate about reaching their financial goals. Once you find your money buddy, have a weekly date to chat about goals & challenges. We all need support.

  6. I am self-employed. How much should I pay in taxes? This completely depends upon your business structure and a lot of other factors. Generally speaking, if you live in the United States, aim to save 25-30% of your earnings for potential tax payments.

  7. What tools do you recommend for tracking my finances? Personal Capital and Mint are two of our faves for tracking personal finances. Xero, Quickbooks and Freshbooks are our faves for business finances.

  8. Is there a bank that you recommend? There are a lot of options when it comes to choosing a bank account. One account that we really love for personal use, is the Radius Hybrid-Checking account. They offer you the ability to earn interest* from your checking account - which is unheard of!

  9. What is bookkeeping? Bookkeeping is the process of categorizing your business transactions.

  10. What is the difference between bookkeeping and accounting? Accounting is the process of analyzing your business transactions to make decisions. Bookkeeping can be completed without accounting. Accounting can not be completed without bookkeeping.

  11. Do I have to hire someone to do my bookkeeping? No. We recommend waiting until your business reaches at least $250,000 in annual revenue before outsourcing your bookkeeping. Why? Because you have to understand how the cash flows in and out of your business, before you can expect someone else to be able to do so. Remember, no one cares more about your money than you do.

  12. Do I need to use a bookkeeping program or can I use pen and paper? There is no legal requirement to use a bookkeeping program. Use whichever method makes most intuitive sense to you- an internet program, pen and paper, Excel or a shoebox. The key is to be consistent. However, using an internet program will save you time and money when analyzing your financial statements and filing your taxes.

  13. Is bookkeeping only important for filing taxes? No. Bookkeeping is necessary in order to file taxes. However, managing your finances is one of your #1 tasks as a business owner. Bookkeeping allows you to stay on top of your money throughout the year.

  14. How does bookkeeping help my business? Bookkeeping allows you to determine when it is time to hire someone, expand your business and make strategic tax filing decisions.

  15. I don't have an accounting background. Will I mess up my books? It's ok if you don't have an accounting background. As the boss of your business, you can easily learn how to manage your books. The key is to find a bookkeeping program that works for you (refer to question #4) and use it consistently.

  16. When should I hire an accountant? This is a personal decision. We recommend working with a tax accountant as soon as possible. Keep in mind, not all accountants file taxes. And most tax accountants do not offer strategy services. You should hire a someone to help with your bookkeeping and/or with financial strategy, once you reach a minimum of $250,000 in annual revenue or feel that you have a good understanding of your books.

  17. Should I write off as much as I can in business at the end of the year? Your tax filing strategy is a personal decision. While most business owners want to write off a lot of expenses at the end of the year, remember to consider your future goals. For example, if you plan on purchasing a home next year, you will want to show a healthy profit in your business as opposed to writing off a lot of expenses. You may also want to consider your retirement planning before spending your money on other business expenses.

Have a money question that’s not listed here? Click here to submit your question for a chance to have it answered on Money & Mimosas.

 


This post was in partnership with Radius Bank.

*Annual Percentage Yield (APY) is accurate as of 05/2/2018. Minimum amount to open account is $10.00. Rate tiers are as follows: 0.00% APY applies to balances of $0.01-$2,499.99, and 0.85% APY applies to the entire balance on balances of $2,500 or more. Rates may change after account is opened. Fees may reduce earnings.

Hiring an accountant? Here are 15 interview questions to help you choose the right person!

Hiring an accountant is an awesome moment in any BOSS's journey. It means that you're making money, and enough of it to warrant asking for guidance on how to make the best use of it.

I know that hiring an accountant can seem intimidating, especially if you don't know what questions to ask. The important thing to remember is that it's just like hiring a Virtual Assistant or Social Media Manager or someone to handle your PR, you want to hire an accountant that understands your business and vision. And someone that you get along with!

Danetha Doe and Money & Mimosas

Most accountants are good at their job, but most of them will not be a good fit for your business. To help you figure all that out, here are 15 questions you should ask before choosing the right person for you.

Fifteen Interview Questions Before You Hire Your Accountant

  1. What experience do you have with my industry?

  2. Could you help me figure out how to grow my company and give advice when I'm looking to hire or expand?

  3. Do you file taxes? If not, do you have a recommendation?

  4. How often do you meet with your current clients?

  5. How often may I contact you? Will I be charged each time?

  6. How do you charge your clients? Is it a flat fee, retainer or hourly?

  7. Which accounting tools are you familiar with?

  8. Is there a bookkeeping program that you prefer? Why do you prefer it?

  9. What are some of the latest trends in my industry and how will they help me in my business? (i.e. If you’re a health coach, what are some changes within the way coaches are doing business that may help improve your business?)

  10. How do you prefer to communicate with your clients? Is it via text, email, social media?

  11. Do you have a staff member, or someone other than you, who will be accessing my file?

  12. How much work do you need me to do to make our relationship as effective as possible?

  13. Do you have any previous or current clients that I could reach out to?

  14. What’s your #1 tip to me about how I can improve my business?

  15. Why did you fall in love with accounting and working with small business owners?

For more money tips, click here to get weekly updates from Money & Mimosas

What to do when you fall behind in your bookkeeping

We’ve all been there. When we’ve gone weeks, maybe months, without organizing our bank transactions and receipts. It can be overwhelming to think of the backlog that needs to get taken care of.

I wish I could say that there was a quick fix to this situation, but there isn’t. If you’ve fallen behind in your bookkeeping and want it cleaned up correctly, you will have to put some time and effort into it.

Why is having up-to date books important? Usually the first thing we think about is taxes, which is important. The cleaner your bookkeeping is, the easier and more accurate your tax filing will be.

But, we also want to keep track of how much we’ve invested in our business and if we’re actually making a profit. Too often I speak to entrepreneurs who are super excited about breaking through six-figures, but then have no idea how much they’ve actually spent on their business. Remember…

It’s not what you make, it’s what you keep if you want to run a successful business. 

This page will walk you through the exact steps you need to take in order to get your bookkeeping up to date. If you’ve already started using a bookkeeping program, begin with Step #5.

  1. Choose a bookkeeping program. Some of my favorite programs are Xero, Quickbooks, Kashoo and Freshbooks.

  2. Set up the program. Follow the program’s instructions on how to get set up. The key step is to link your related bank and credit cards.

  3. Make sure all of your transactions are included. Depending on the program you choose, when you link your bank info, it may allow you to backdate to the first day of your business transactions. If not, you will need to obtain the CSV file from your bank and upload the transactions manually.

  4. Set up your chart of accounts. These are your categories (aka “buckets”) where you’ll place different transactions.

  5. Reconcile your transactions. Depending on how many transactions you have in the backlog, I would start with the oldest and work forward. Why? Because the further away the date is, the harder it will be to remember it.

  6. Divide the transactions into week-long chunks. Do not try to reconcile them all in one sitting. For example, if you are three months or 12 weeks behind, plan to complete everything over the course of 4-8 weeks. Each week you’ll reconcile 1 or 2 week’s worth of old transactions.

  7. Reconcile the old transactions with the ongoing transactions. As you're catching up on older transactions, you are also doing the bookkeeping for the present. In this case, if you have 12 weeks to catch up on and do 2 weeks of old transactions and the current week (a total of 3 weeks), within a month and a half you’ll be all caught up!

It’s okay if you’ve fallen behind in your bookkeeping. The past is the past. Now, it’s time to take action, get caught up and establish habits so that it never happens again.

For more money tips, click here to get weekly updates from Money & Mimosas

Budgeting against your goals throughout the year

This post was in partnership with Wells Fargo. Originally posted on Wells Fargo Works.

One of the more challenging aspects of running a company is determining how to best allocate the company’s revenue according to a budget. Oftentimes, a company will begin the year with one idea and, midway through, realize that they want to take a different direction. This can lead to uncertainty about how to best manage cash flow and how to adjust projections. 

The key with business budgeting is to always remember that a budget is a fluid document. It’s merely a guide for you to use to determine your next best move, and it is OK to adjust it throughout the year. 

Estimate your annual budget

When you’re creating your annual budget projection, you may want to consider applying the 60/20/20 rule. Generally speaking: 

  • 60% of revenue should be used for fixed expenses. This includes salaries, overhead expenses, reserves for tax payments, and the company’s profit goals. 

  • The first 20% should be dedicated to growth. This may include investing in marketing, advertising, and other initiatives to expand the company’s brand and reach. 

  • The second 20% should be designated for internal development. This could include R&D for products-based businesses or training for staff members to improve their skill sets and leadership abilities. 

Create quarterly budget goals

Every 90 days or so, you should aim to check in on your annual budget projection. To help with this, you also need to create four separate quarterly budgets. When planning your quarterly budget, work with your team to decide on the number one objective for each quarter. It could fall under one of three categories:

  • Growth: Pushing your business into a growth phase 

  • Stability: Remaining stable and consistent 

  • Research and Development (R&D): Increasing your service level with an advanced technology investment or internal team training 

RELATED: Need help setting financial goals for your business? Expert Ellen Rohr is here to help.

Adjust based on your needs

Keep in mind that the 60/20/20 rule is a guide. Depending on your quarterly objective, you may need to tweak these percentages. For instance, if you are developing a new product to bring to market, you will likely need to increase the percentage dedicated to internal development, and decrease your funds allocated to growth. 

Once that product has been created and is ready to go to market, you may reduce the amount devoted to R&D from perhaps 30% or 35% back down to 15% or 10% and re-allocate the remaining funds to growth. At this point, you might consider increasing the percentage of revenue dedicated to growth to 30% or 35% in order to pay an outside branding consultancy to help you package and position the product, work with a marketing agency to help you spread the word, and later work with an advertising agency to help you increase sales. 

If you are a service-based business, you may decide to focus on developing your staff at a specific point in the year, which will increase the amount of money that the company is using for internal development. 

The key to business budget planning is flexibility when it comes to your objectives and quarterly budgets. This will help drive your budgeting decisions and keep your business on track. 

Did you like this article? Join our weekly #MoneyandMimosas newsletter for more tips on how to be savvy with your money.

Our Top 5 Favorite Bookkeeping Apps for the Independent Woman

Oh, bookkeeping. The bane of every business owner's existence. 

But, we all know that keeping track of our monies is the secret to leading the carefree, glamour-filled lifestyle. As an independent woman, it is imperative that we know how to manage our books. And not end up in a BBHMM situation like Rihanna did with her CPA firm. More about that, here.

Often times, business owners wait until tax season to start thinking about their books. Leaving you in a frenzy trying to figure out where the receipt is for that random $87 charge way back in the month of the May. 

Top 5 Bookkeeping Apps for the Independent Woman.png

Do your tax accountant a favor this year and let's burn all of the shoeboxes. Get a jumpstart on organizing your books by using an online program. Not only does this make filing super easy peasy, it also helps you stay on top of your finances throughout the year during your weekly money dates

Here is a list of the top five bookkeeping programs that I love for the independent woman.

  1. Quickbooks Self-Employed - a fantastic tool for freelancers and independent contractors. Best feature: Love that it automatically calculates your quarterly taxes, and allows you to send invoices on the go. Downside: customizing your invoices is very limited, which we know is important to our creative friends. Cost: Starts at $10/month and goes up to $17/month.

  2. Freshbooks- great tool for the self-employed and project-based businesses. Best feature: hands down the best invoice customization tool on the market. Downside: the financial reporting is limited, which may be an issue as you grow your business. Cost: Starts at $15/month and goes up to $50/month

  3. Xero Tax Touch- known as beautiful accounting software, this program's design is really easy on the eyes and geared towards freelancers/independent contractors. Best feature: easy-to-read report on your income, expenses and how much taxes you owe for the year. Downside: no invoicing capability, which is a huge downside for the woman on the go. Cost: $6/month

  4. Sage One- geared towards the small business owner on the go. Best feature: great inventory tracking capabilities. Downside: this product is a little too robust for the freelancer or independent contractor, and therefore not very intuitive. Cost: $25/month

  5. Kashoo- named the #1 accounting app on the iPad and really great for the traveling business owner. Best feature: works offline so you can access your data even if you are out of internet range. Downside: similar to SageOne, not necessarily an intuitive program for the freelancer or independent contractor. Cost: Approximately $17/month

And now we'd like to hear from you! Which accounting software do you use for your business and why? Leave a comment below.

For more accounting tips for the independent woman, be sure to click here and join our weekly newsletter.