Author: Laura

Tracking COGS For A Handicraft Or Manufacturing Business

Posted on | by Laura

For IRS Schedule C, Cost of Goods Sold (COGS) relates to both the supplies (raw materials) you use and the finished goods (things you make) at various stages.

Your inventory includes three main categories:

  1. Raw Materials/Supplies: The unused components you purchased to make your products (e.g., fabric, thread, beads, wood).
  2. Work in Process (WIP): Products that are partially completed.
  3. Finished Goods: The products you’ve completed and have on hand ready for sale.

The Cost of Goods Sold (COGS) calculation essentially tracks the movement of these costs and allows you to deduct the cost of only the goods you actually sold during the year.

How Inventory Relates to COGS on Schedule C

To calculate your COGS in Part III of Schedule C, you use an equation that involves your inventory values:
{Beginning Inventory} +{Purchases} + {Direct Labor} +{Other Costs} – {Ending Inventory} = {Cost of Goods Sold}

Here’s a breakdown of how your inventory fits into this:

  • Beginning Inventory (Line 35): This is the total value of all your inventory (raw materials, WIP, and finished goods) from the end of the previous tax year.
  • Purchases (Line 36) and Materials and Supplies (Line 38): This is the cost of the raw materials/supplies you bought during the current year.
  • Ending Inventory (Line 41): This is the total value of all your unsold inventory (raw materials, WIP, and finished goods) still on hand at the end of the current tax year.

The Key Principle

The most important concept is that you cannot deduct the cost of supplies until the finished product made with those supplies is sold.

  • When you buy supplies, the cost goes into your Inventory.
  • When you use supplies to make a product, the cost moves from Raw Materials to Finished Goods Inventory.
  • When you sell the finished product, the total cost to make that product (materials, labor, etc.) moves out of inventory and becomes your Cost of Goods Sold (COGS), which is a deduction against your income.

This approach ensures that your income is clearly reflected because you match the expense (COGS) with the income (Sales) in the same tax year.

2. Setting Up WordPress For WooCommerce

Posted on | by Laura

Before we install WooCommerce, there are a few pages we should set up first:

Step 1: Setting Up Relevant Pages

  1. About Page: Share your story with your customers. ( see example )
  2. Contact Page: Provide a way for customers to reach you. ( see example )

Step 2: Disabling Comments on Pages

In WordPress, pages are for static content like “About Us” or “Contact” pages, which typically remain unchanged over time. Posts, on the other hand, are for dynamic content like blog entries or news updates, which are organized chronologically and can be tagged and categorized. Comments are great for blog posts but don’t always make sense on pages. Let’s turn them off:

  1. Go to the Admin Dashboard.
  2. Navigate to Pages.
  3. Select all your pages.
  4. Go to Bulk Actions, choose Edit, and click Apply.
  5. Under Comments, select Do not allow.
  6. Click Update.

Now, when you revisit your About page and scroll down, you should no longer see the comments box, making it more “page-like”.

Step 3: Setting Up Permalinks

Permalinks in WordPress are the permanent URLs of your posts, pages, categories, and other archive pages on your website. These URLs are designed to be permanent and should not be changed, hence the name “permalink.” They help create a URL structure that is easy for both humans and search engines to understand and share.

Pretty Permalinks: These are SEO-friendly and attractive, usually containing words such as the title of the post or page, post category, or tag name. For example: http://example.com/2012/post-name/

Pretty permalinks are SEO-friendly because they include keywords from the post title or category, making URLs more descriptive and relevant to search engines. This helps improve search engine rankings and provides a better user experience by creating readable and memorable URLs.

To create prettier permalinks:

  1. Go to the Admin Dashboard.
  2. Navigate to Settings > Permalinks.
  3. Choose any option other than Plain (e.g., Day and name, Month and name, Numeric, Post name). Personally, I’m a fan of Day and name.
  4. Click Save Changes.

Return to your About page and refresh it to see the updated permalink. This will apply to your About page, Contact page, and future Product pages.

1.Why Use WordPress WooCommerce?

Posted on | by Laura

If you’re considering starting an online store, WooCommerce offers a robust and flexible platform to build your business. It is a popular e-commerce plugin for WordPress, and it’s a great choice for several reasons:

  1. User-Friendly: It’s relatively easy to set up and use, even if you don’t have a lot of technical expertise.
  2. Customizable: It offers a high degree of customization, with a plethora of themes and plugins to tailor your online store to your exact specifications.
  3. Cost-Effective: The core plugin is free, and while there are paid extensions available, you can start selling online without significant upfront costs.
  4. SEO-Friendly: WooCommerce is built on WordPress, which is known for its strong SEO capabilities, helping your store rank better in search engines.
  5. Community Support: There is a large community of developers and users, which means you can find plenty of resources and support if you run into any issues.
  6. Secure: Regular updates and a focus on security help protect your online store from potential threats.
  7. Integration: It integrates seamlessly with many other services and platforms, including payment gateways, shipping services, and marketing tools.

SEO Tips For Etsy Sellers

Posted on | by Laura

SEO stands for Search Engine Optimization, and it’s the practice of enhancing the visibility of a website or a web page in a search engine’s organic results. In simpler terms, it’s about making your site more attractive to search engines like Google, Bing, and even Etsy’s internal search, so that you appear higher in search results. :

The importance of keywords in SEO can not be over stated. Keywords are the terms and phrases that users enter into search engines when looking for specific information, products, or services. They’re like the secret sauce of search engine optimization (SEO).

Here’s why keywords are important:

  1. Visibility: Using relevant keywords helps your content appear in search engine results, making it more likely that people will find your website.
  2. Relevance: Keywords help search engines understand the topic and content of your webpage, ensuring it shows up for the right searches.
  3. Audience Targeting: By choosing the right keywords, you can attract your target audience, who are already interested in what you offer.
  4. Competitive Edge: Analyzing and using the right keywords can help you stay ahead of competitors in search results.
  5. Improved User Experience: Good keyword usage can lead to more relevant search results for users, enhancing their experience.

For instance, if you have a blog about healthy recipes, keywords like “easy vegan recipes,” “gluten-free desserts,” and “low-carb meals” can help your content reach those who are specifically looking for these types of recipes.

Here are some Etsy seller SEO Tips:

Shop Optimization

  1. Use a clear and descriptive shop title that includes relevant keywords.
  2. Write a detailed shop description that highlights what makes your shop unique and includes important keywords.
  3. About Section: Share your story and what inspires your creations. This can help build a connection with potential buyers.
  4. Shop Policies: Clearly outline your shop policies to build trust with customers.
  5. Shop Reviews: Encourage satisfied customers to leave positive reviews, as they can boost your shop’s credibility.

Listing Optimization

  1. Listing Titles: Use descriptive and keyword-rich titles for your listings.
  2. Listing Descriptions: Write detailed descriptions that include relevant keywords and highlight the unique features of your products.
  3. Listing Photos: Use high-quality photos that showcase your products from different angles.
  4. Listing Prices: Set competitive prices that reflect the value of your products.
  5. Listing Categories: Choose the most relevant categories for your listings to help buyers find your products.
  6. Listing Attributes: Fill out all available attributes to provide more information about your products.
  7. Listing Tags: Use all available tags and include relevant keywords to improve your listings’ visibility.

Additional Tips

  1. Keywords: Think like a shopper and use keywords that potential buyers would search for.
  2. Conversion Rates: Focus on improving your listings’ conversion rates by providing excellent customer service and high-quality products.
  3. Recency: Regularly update your listings to keep them fresh and relevant.

GnuCash For Etsy Seller’s Tutorials

Posted on | by Laura

Using GnuCash as an Etsy seller can help you efficiently manage your shop’s finances, track income and expenses, and generate reports for tax purposes. In this course we’re going to explore the business model of a handmade crafts and jewelry shop known as Handmade Haven Creations. Handmade Haven Creations specializes in creating unique, handcrafted items, which includes: Handmade Bracelets. Handmade Necklaces and Home Decor. All the products are listed and sold on Etsy, Etsy handles all sales transactions and payment processing. By understanding the various components of the Handmade Haven Creations’ business model, you can see how a small handmade crafts shop can efficiently manage its finances with Gnucash Free Accounting software. Let’s begin!

Before you begin you should
1. Install GnuCash
2. Download the Etsy Chart of Accounts



What Type of Business Should I Start?

Posted on | by Laura

Deciding what type of business to start involves considering several factors, including your interests, skills, market demand, and the resources available to you. Here are some steps to help you determine the best business for you:

1. Assess Your Interests and Skills

  • Passions: What are you passionate about? Consider businesses that align with your interests, as you’ll be more motivated and engaged.
  • Skills and Expertise: Evaluate your skills and experience. A business that leverages your strengths is more likely to succeed.

2. Identify Market Needs and Opportunities

  • Market Research: Investigate market demand and trends. Look for gaps in the market where you can provide unique value.
  • Customer Pain Points: Identify problems that your potential customers face and think about how your business can solve them.

3. Evaluate Business Models

  • Service-Based Businesses: These can include consulting, freelancing, coaching, and professional services. They’re often easier to start with lower upfront costs.
  • Product-Based Businesses: Selling physical or digital products, either through e-commerce, retail, or online marketplaces like Etsy or Amazon.
  • Content Creation: Blogging, podcasting, or creating a YouTube channel. These businesses can generate revenue through advertising, sponsorships, and affiliate marketing.
  • Tech Startups: Developing software, apps, or tech solutions. These require more technical expertise and potentially higher initial investment.

4. Consider Resources and Investment

  • Startup Costs: Determine how much capital you need to start your business. Some businesses require minimal investment, while others may need substantial funding.
  • Time Commitment: Consider how much time you can dedicate to your business. Some businesses may require full-time attention, while others can be managed part-time.

5. Test and Validate Your Idea

  • Minimum Viable Product (MVP): Create a basic version of your product or service to test the market and gather feedback.
  • Feedback and Iteration: Use customer feedback to refine and improve your offering before fully launching.

6. Long-Term Vision and Goals

  • Scalability: Consider how easily your business can grow and scale over time.
  • Impact: Think about the long-term impact you want your business to have on your customers and community.

Here are a few examples of popular Online and Offline business ideas to consider:

  • E-commerce Store: Selling products online through your own website or platforms like Amazon and Etsy.
  • Freelance Services: Offering skills such as writing, graphic design, web development, or social media management.
  • Online Courses and Coaching: Sharing your expertise through online courses, workshops, or one-on-one coaching sessions.
  • Subscription Box Service: Curating and selling subscription boxes in a niche market (e.g., beauty products, gourmet foods, fitness gear).
  • Drop-shipping Business: Selling products without holding inventory by partnering with suppliers who ship directly to customers.
  • Local Services: Starting a local business offering services like cleaning, landscaping, personal training, or pet care.

Choosing the right business type requires thoughtful consideration and planning. Reflect on your passions, skills, market opportunities, and resources to find the best fit for you.

Identifying your niche and target audience

Posted on | by Laura

Identifying your niche and target audience is crucial for the success of your online business. Here’s a step-by-step guide to help you:

1. Self-Assessment

  • Interests and Passions: Start by listing your interests, passions, and skills. What do you enjoy doing? What are you good at?
  • Experience and Expertise: Consider your background and expertise. What unique knowledge or experience can you offer?

2. Market Research

  • Identify Market Gaps: Look for gaps or underserved areas in the market. What problems are not being solved? What needs are not being met?
  • Analyze Competitors: Study successful businesses in potential niches. What are they doing well? Where are their weaknesses?
  • Trends and Demands: Research current market trends and demands.
  • How to use tools like Google Trends to research popular money making niche ideas.

3. Define Your Niche

  • Specificity: Narrow down your focus to a specific niche. For example, instead of “health and fitness,” you might focus on “yoga for busy professionals.”
  • Passion and Profit: Balance your passion with profit potential. Your niche should be something you enjoy and can monetize.

4. Understand Your Target Audience

  • Demographics: Define your audience’s age, gender, location, income level, education, and occupation.
  • Psychographics: Understand their interests, values, attitudes, and lifestyles. What motivates them? What are their pain points?
  • Behavioral Insights: Analyze their buying behavior, spending patterns, and preferences. How do they interact with similar products or services?

5. Create a Customer Persona

  • Detailed Profiles: Create detailed profiles of your ideal customers. Give them names, backgrounds, and specific characteristics.
  • Goals and Challenges: Identify their goals and challenges. What are they trying to achieve? What obstacles are they facing?
  • Solutions: Determine how your product or service can solve their problems and meet their needs.

6. Validate Your Niche and Audience

  • Feedback and Surveys: Collect feedback from potential customers through surveys, interviews, or focus groups.
  • MVP Testing: Launch a Minimum Viable Product (MVP) to test your niche. Gather data on customer interest and engagement.
  • Analyze Results: Use analytics tools to track performance and gather insights. Adjust your strategy based on the data.

7. Continuous Refinement

  • Stay Informed: Keep up with industry trends and changes in your niche. Continuously research and update your knowledge.
  • Engage with Audience: Maintain an open line of communication with your audience. Listen to their feedback and adapt accordingly.
  • Innovate and Adapt: Be willing to innovate and adapt your approach as needed. Stay flexible and responsive to market dynamics.

By following these steps, you can effectively identify your niche and target audience, setting a strong foundation for your online business. If you need further guidance on any specific step, feel free to ask!