Most of us get started in our baking business just wanting it to be successful enough to make some extra cash. We think of it more as a hobby and not as a business, but if you exchange money for your goods, then you have a business even without a storefront.
Since there is exchange of money, no matter how small, you should set up your bookkeeping to track money coming in and money coming out.
Bookkeeping is the only way to know if your are making money. You must track all expenses coming in each month to money going out.
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Now I have good news and I have bad news. Let’s start with the good news. Good news is that there is software out there that will quickly calculate your information, and a large part of the data entry can be automated.
Now time of the bad. This costs money. When you have a small business and you are starting out, then your funds are most likely limited.
However, this doesn’t mean that you need to hang up your hat and quit. It just means that you need to find a better way to do your bookkeeping for your baking business.
Since my mom was in accounting for over 20 years and my sister currently is in accounting, we lucked out. We built our own profit and loss (P&L) workbook. You can get a copy here.
When we started our baking business, we did not have the extra cash for a true accounting program. We used this worksheet here to help us get through the first year of our business even without a storefront.
The workbook can be used for a monthly or annual P&L. The front sheet is set-up to summarize your income tabs and expense tabs to give you an overview of your progress. The workbook contains different tabs to collect information on both revenue and expenses for the business.
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Each month we enter our expenses and income into the workbook. We take our monthly bank statement and make sure we have captured all debits and deposits. We match our expenses to our receipts and evaluate our profit margins.
This system is great for small baking businesses or start-up businesses even without a storefront that do not have a ton of extra cash to throw at an accounting system for now.
Easily manage your money and check the health of your business from start-up through the infancy stage of your business.
If you are still struggling with your pricing, we understand. We, too, struggled with pricing until we changed our pricing mindset.
Sign up for our email sequence on How to take control of pricing in 3 days. Learn to change your pricing mindset and understand how to build pricing for your business even without a storefront.
Have you built your business plan for your baking business? If you have not, then we suggest you go here to learn why you need a business plan in your baking business.