Subscription Box Basics with Julie Ball

Subscription Box Finance with Jamie Trull

August 30, 2021 Julie Ball Episode 89
Subscription Box Basics with Julie Ball
Subscription Box Finance with Jamie Trull
Chapters
Subscription Box Basics with Julie Ball
Subscription Box Finance with Jamie Trull
Aug 30, 2021 Episode 89
Julie Ball

#089 - In this episode of Subscription Box Basics, Julie is joined by her friend Jamie Trull to talk about a really sexy subject, something you all need to know and want to know. We are talking about finances!

Jamie is a financial literacy coach and profit strategist who helps business owners understand the financial side of their business so they can make and keep more money. She will walk us through some of the things you need to know about finances, especially when starting your subscription box business. 

Links:



Show Notes Transcript

#089 - In this episode of Subscription Box Basics, Julie is joined by her friend Jamie Trull to talk about a really sexy subject, something you all need to know and want to know. We are talking about finances!

Jamie is a financial literacy coach and profit strategist who helps business owners understand the financial side of their business so they can make and keep more money. She will walk us through some of the things you need to know about finances, especially when starting your subscription box business. 

Links:



Julie:

So you want to launch a subscription box and don't know where to start? Girl, you are in the right place. I'm Julie Ball, a subscription box coach and your host here at Subscription Box Basics, a podcast for new and aspiring subscription box entrepreneurs that want to avoid overwhelm. So grab a coffee, some pen and paper, and let's have some fun! Hey everybody, and welcome back to Subscription Box Basics. I'm J ulie B all your host, and today we're talking about a really sexy subject, something you all need to know and want to know. We are talking about finances. So last week's episode, I talked about startup costs and what it actually costs to start your subscription box business. And I gave you a link to the handy-dandy calculator at subscriptionboxbootcamp .com forward slash calculator. But today I have a guest on the show that is going to really talk us through some of these things you need to know about finances, especially when starting your subscription box business, especially at the beginning of any business. So today I have my friend, Jamie Trull. She is a financial literacy coach and profit strategist who helps business owners understand the financial side of their business so they can make and keep more money. Can I get an amen? She is here to help you today. Jamie, welcome to the podcast.

Jamie:

Thanks for having me, Julie. I'm so glad to be here and I'm just going to reiterate real quick cause you just mentioned your calculator, which you sent me yesterday. And if you guys haven't gone and downloaded that, even if you're not a numbers nerd like me, you're going to love it. Like I was nerding out on that so much and I can't believe she's giving it away for free. So you guys, you guys need to go grab that and I will also say this, Julie, you mentioned like that this is gonna , you know, the sexiest topic, right? Like it is so sexy. So sexy finance is so sexy, but it can actually be...

Julie:

You need to prove it to us today.

Jamie:

Numbers can be sexy when they're big numbers. That's true. A couple of zeros may become pretty, pretty sexy. So yes, I teach finances. I came from a more traditional route and somehow woke up an online entrepreneur, helping women business owners with their finances. But previous to this, you know , crazy life that I have fallen into, I was a CPA. So certified public accountant , super sexy and cool. Right. And I worked for Fortune 500. I worked for the Coca-Cola brand for most of my career. So I worked in leadership and finance and you know, FA then found my way into entrepreneurship. It was always something that kind of was on the, you know, the back of my mind, right? Like one of those things that just kind of nags at you until finally you decide, "Okay, I gotta follow this." even though I'm an extremely risk averse person, which I'm a CPA, obviously I'm risk averse, who else gets an accounting and finance degree, but are very risk averse person. So it has been a journey. And I will say, I didn't set out to do what I'm doing. I didn't know I started kind of on a more one-to-one, which is a lot of people who kind of transitioned into online entrepreneurship. Oftentimes we'll start kind of on that one-to-one freelancing basis. I was working as a virtual CFO and it just happened that it was women clients that were hiring me. I didn't set out for that. I had no idea, and then , realize how much I loved it. And also how much of a huge divide there was in accessible financial education that really spoke to women starting businesses. I mean, and that was something that I continue to see over and over and over again was how , the information oftentimes was not packaged in a way that really made sense. It was not packaged in a way that really resonated with women business owners. And it, it felt , really kind of far away and the people that were teaching it , were not teaching it in a way that it was really understandable and made it easy. And so I sort of fell into that. I didn't know, I love to teach. And then I woke up an online course creator, fast forward, fast forward a couple of years. And so now I love it. I teach it, I teach women how to competently step into their own role as CFO of their business, meaning making those financial decisions with confidence because that's really what we are right at the beginning of our businesses. Before you have time to go hire a six-figure CFO, you are the CFO, just like you're the CEO of your own business, right, Julie.

Julie:

It's true. And I like it . It's something that you're going to do on your own at first. And that's why it's important to find someone like Jamie to learn the ropes. Eventually you may grow to a place where you can hire this out, but no matter what you're hiring out in your business, you need to know a little bit about what that entails before you hire someone to do it for you. And I remember , you know, as you were starting to grow your coaching business, you throw in a pandemic and like economic uncertainty and you know, jobs being halted. And I remember that's when you started really sharing information about like how to navigate this uncertainty. And , that's where I started really following along your advice. And I saw thousands and thousands of women gravitate towards you. Cause you were, you were like you said, delivering this in a way that was relatable. And it made it a little bit less scary. It felt like you had someone in your corner.

Jamie:

Yeah. I mean, I think it's funny looking back at that, because that wasn't an intentional, I didn't, I didn't set out to become an expert in COVID-19 stimulus funds and things like that because those things didn't even exist, right, when I started this business

Julie:

Right.

Jamie:

And what happened was that that just came out of really listening to people and where they were, because I teach how to maximize your profit. Well, when businesses were shutting and people couldn't even bring in, you know, revenue, they don't really ask you questions about how to make more profit. They just want to survive.

Julie:

Yeah.

Jamie:

And so for me, that is where I kind of shifted for what I thought was going to be a short period of time. That ended up being a lot longer than I think any of us thought. My world then became PPP loans and EIDL loans and grants and you know, how to, you know, tax credits and things to help business owners be able to survive at a really, really difficult time. And yeah, I think it , it brought in droves of people because it was an area where nobody really understood it and guess what? Nobody's accountants understood it either. And so people were like, I need help. My accountant isn't helping me because they don't know what's going on. I need this information. And so I just started, you know, I started a YouTube channel that , grew really, really quickly just putting out kind of information on these topics. And it was really kind of humbling for me to feel , to just see, being able to help such a large amount of people. We went from 5,000 people in my Facebook group to 36,000 people in a very, very short period of time , which was great. But let me tell you growth like that has a lot of growing pains as well as a business owner, right. Sounds amazing. But , sometimes there can be challenges to that too, but it's been , i t's been a ride. I will tell you it has been a ride to get to this place.

Julie:

Yeah. Well, I'm glad you're here. And I think the best place to start here is at square one. So what does any business owner need from the start, when it comes to finances and like planning and keeping things organized?

Jamie:

Yes. So I think that's kind of where we start, right. Is in the place of what I call compliance, which is the things you need to do, right? There are things that you need to do in your business to keep up with your finances and the reason, right? One of the reasons that we do that, I'm going to tell you why this isn't the only reason, but one of the reasons we do that and probably the one you're most familiar with as well for taxes, I want to claim all of my tax deductions. I want to be able to get all those expenses because you pay taxes, right? Revenue minus expenses is what you pay your taxes on. And so you don't, you want to make sure you're tracking all of that. You have a good tracking for your, your income coming in. You have a good tracking for the expenses that are going out so that you can claim all that on your taxes because nobody wants to pay more taxes than they need to.

Julie:

Right.

Jamie:

So that's kind of, that's kind of the reason number one. And for that, you want to get set up on, a lot of people start, like if you're in the very beginning, maybe you can get away with doing a spreadsheet or something like that. But pretty quickly, I usually recommend people when you start really bringing in money, I recommend people move to more of a traditional accounting system. And I know, I think you recommend as well, Julie QuickBooks online.

Julie:

I do. Yeah. And in Subscription Box Bootcamp, we have that initial spreadsheet, like you got to start somewhere, right. But then absolutely graduate into QuickBooks online. And we'll put a special link in the show notes that gives you a discount on your QuickBooks membership.

Jamie:

Love it . And we also , one of the other things that I recommend is you want to get that business banking account. And a lot of people wait too long on this. And really , you don't want to commingle funds. It also is going to make, you know, doing that kind of bookkeeping work really, really hard for you. If everything's just within your personal account, you're not going to have a good idea of how much money you're making in your business or how much money you're spending. So the very first thing, I don't care if you haven't brought in a dollar, if you're planning to start monetizing the soon, or if you're incurring expenses, get that business bank account, and you can fund it with your own money to begin with, right. But then eventually that is going to sit separate from you because you want your business to kind of be separated from you.

Julie:

And then you can connect your QuickBooks online, directly with your bank account so that you don't have to manually input. And I guess we should take a step back. Like what is QuickBooks online?

Jamie:

Yeah. So QuickBooks online is just a method of accounting, right? So it's keeping your accounting records. So the nerd accountant in me would say like, it's your debits and your credits, but nobody knows what that means. But basically it's just keeping the records of what are your, what's your income? What are your expenses? And you can run your what's called your financial statements out of it. So your , your profit and loss statement, and there are other statements that you would want, especially in a subscription box business, something like a balance sheet, which will show you your inventory and different assets that you own and liabilities that you owe. And you could run all of that out of something like QuickBooks online.

Julie:

So not only will it help keep you organized, but you guys come tax time. It's a must. Like when your accountant asks you, okay, well, what are your expenses for the month? What you do is you go to QuickBooks online and you run your report. You don't have to pull out the shoe box and add up all the receipts old school style, you know? So I think it's really important if you want to adopt that , work smarter, not harder kind of lifestyle, something like QuickBooks online is a must for you.

Jamie:

And you can scan your receipts into QuickBooks online. That's one of the great things, you know , if you want to keep all your records in really great shape, it's really good to have something like that. And then you're not scrambling at the end of the year. So again, like the two things that keep you from having that kind of scramble at the end of the year, which is honestly where a lot of people get to or having an accounting system that you're paying attention to. Right. And actually using throughout the year and having a good system for keeping up with your receipts and things like that. And when you have that, when you kind of ingrain that, then it's going to get a lot easier come tax time.

Julie:

So is there like a good rule of thumb? Like I should go in once a month and check my numbers or like categorize my expenses, or how often would you recommend a new business owner go in and kind of look at that and, and work through that.

Jamie:

Of course there is. And I actually, if I can I'm going to give a freebie here because it's specifically to this. If anybody wants this, I have a habits checklist, which basically goes out over, what should I be doing daily, weekly, monthly, quarterly, annually in my business. So it's just a checklist of financial things that you can look at and kind of figure out what do I need to be doing. Cause I feel like that's usually what, what people kind of feel like, they're like, "I know I need to be doing something, but I don't know exactly what I'm supposed to".

Julie:

Yes.

Jamie:

So usually I'm like kind of the daily, the weekly , the more routine tasks that you need to be doing, those are gonna be things like , you know, categorizing your expenses and your income in your accounting system, things like that. Monthly, it's going to go into things like account reconciliations, which a lot of business owners don't do.

Julie:

What's that word even mean?

Jamie:

I know. So what that is, and you can do it within your QuickBooks. Right. And it basically is just reconciling what your accounting records are saying to what your bank statement is saying. Right. So it's just saying like, okay, everything's in there. We're not double counting anything. A lot of times people have issues in , if they don't really know kind of what they're doing. And it takes a little while, there is a learning curve to accounting software . So I will say that there are lots of YouTube videos out there to learn it, but there is a learning curve. And a lot of times when people don't really know what they're doing, they might accidentally double income. Well, that's not going to be good because guess what's going to happen on your taxes if you unknowingly have doubled your income and I've seen it, I see it all the time. Or, you know, not, not having expenses categorized correctly, it's going to the wrong place. So , doing something like bank reconciliations, just make sure like, okay, everything is in here, that's supposed to be in here and everything is kind of reconciling out. That's what we're looking for. And I do, I will say, I think in the very beginning you do it yourself pretty soon that that compliance work, that piece, that's just kind of, it's probably the most boring side of things for you too, right. It's probably not your like core competency. I don't wake up in the morning and say, yay . I want to go look at my QuickBooks today. That's the stuff you want to be outsourcing sooner rather than later. And then you start focusing more on, you know , some of the other monthly and then you get into quarterly tasks, which are more strategic in nature. Those are things like monitoring your cashflow . Those are things like looking at your profit margins to make sure, you know, you know how profitable you are. those types of things, that's the kind of stuff that you want to do, you know , a little bit less frequently, but you want to make sure that you're keeping up and doing it and developing those habits.

Julie:

Cool. Okay guys. So all of the freebies and all of the resources that Jamie and I are going to talk about today, we're going to put them on one webpage for you. It's going to be subscription box bootcamp forward slash finance. So any of these things that we're talking about, you will find links to them there. Okay. So while we're talking about accounting and QuickBooks online, can you talk to us about the difference between cash and accrual accounting? Because I've always been kind of confused, like which way should I run my reports? Which way should I look at the money? And you explain what they mean first, and then I'll give you some thoughts from a sub box owner's perspective.

Jamie:

Yeah, absolutely. So cash and accrual accounting, it's two different methodologies for accounting. So the first thing I'll say is when I was in the corporate world, right in the world of, you know , these big Fortune 500 companies that have to actually file all their financial statements with, you know , t he country and the SEC and all o f this, they're all on accrual method, right? Big if you are over. And I don't remember the dollar amount off the top of my head, but the vast majority of large companies are going to be under the accrual method of accounting. The vast majority of very small businesses are under the cash basis because it's easier. And what the real difference is there is that , one of them, and we can look at it from tax perspective. And then you can look at it from a management perspective, but from a tax perspective, if you're under a cash basis accounting, that means that the revenues and the expenses count when that cash actually moves. Right? So when you actually pay the expense, that would be when you did the year that you deduct the expense. When you actually bring in the income, that's the year you recognize the income, regardless of whether you still have to deliver whatever they're paying for. Right?

Julie:

So a good example would be with a subscription box. If you sell an annual prepaid membership where they paid for the whole 12 months in advance.

Jamie:

Yep.

Julie:

Cause you still have to send them a box for 12 weeks .

Jamie:

Yes. Yes. So exactly that. So in December, let's say somebody buys the whole next year. With under cash basis accounting, you would recognize that income in the year you got the money, which would be that current year, right. Under accrual basis, you would not, that would not show up as income. That would actually , be something that you have it's unearned revenue basically is what it's called, but it would not be, it would not be income that would be on your taxes until the next year. Right? So it really depends. Accrual method is better for matching your expenses with your income. If you, if that's something that you want to do. Right. What I mean by that is you're not those expenses aren't coming until next year. Right? You will have those expenses as you paid those boxes out. So if you want the revenue to hit in the same year, you use accrual, if you want to go kind of the easier way, which is just to follow where the cash is and follow what your bank statement is showing you, then it would be cash. Most small business owners have that choice unless you hit, I can't remember. It's a few million , before...

:

We're good for now.

Jamie:

Yeah.

Julie:

I said , yeah , we're good for now.

Jamie:

Yeah. So it's pretty high before you have to switch to accrual, so you can really choose either, but I'd love to hear your thoughts from a sub box perspective.

Julie:

Yes. So the first thing that comes to mind, and this is out of personal experience and from experience with my husband running his box is, so again, that example where you sell an annual membership, just for fun, just say that's $500 and you get that money now and you are, I have $500. This is amazing. I'm going to pay down my credit card. And then, you know, 10 months, 11 months later, you're still having to fulfill those boxes and , incurring expenses like postage. But you've already spent that $500 elsewhere because you've paid down your credit card. And here's another kind of component of that is as a subscription box business owner, we're buying our products far in advance, farther in advance than we're selling them. So for example, I buy my products about 90 days out before I collect a dime on those, because the quantities that we need to get, we need to make sure we secure that inventory. Make sure there's enough time for shipping and transit and for us to repackage those. So as a new box owner, they might be buying 30 days out, right? So that's not too bad cause you're going to recover that money pretty quickly. But it's just like this ongoing , like this routine, this rhythm that it's like, you're spending money on future boxes and then you're paying down your credit card or paying expenses. And I just, I caution people that if they sell an annual subscription, personally, I look at it at one month at a time, even though we might look at it differently in my accounting, I keep a separate spreadsheet that says, okay, I have 12 months of this to fulfill. Don't spend all that money right now.

Jamie:

I love that. I love that because you, it drives from the point of, you can also use something different in your management view than what you do for taxes. Actually, big companies all do that.

Julie:

Oh really?

Jamie:

We have tax books. Yep. We have tax books. It's how we look at things for taxes. And we have actual management for making management decisions, how we look at things and that is completely fine. So what you're doing is basically creating like whatever we do for taxes, that's a separate story, right. But I want as a manager to know what's going on in my business to manage my cashflow, to make decisions about my business, I'm going to track it this way. And the great thing about something like QuickBooks online is you can actually switch back and forth between both. So it allows you, there's a toggle button where you can show cash in a cruel . And now you have to make sure that you've put information in so that it knows. Right? So , in this case, Julie, like the system would have to know that that type of sale is something that really is related to, you know, 12 months or something like that. But if you plumb the system correctly and a bookkeeper can help you with that, you can actually just switch back and forth and see it versus having to even have like a separate way to track it if you wanted to.

Julie:

So I actually have a spreadsheet that is my like daily go-to spreadsheet. And at this like two, three years ago, I would check it daily and change the numbers daily. Now I check it maybe once a week or every other week, because I know my rhythm, my flow of income and expenses a lot better now, but this spreadsheet basically says, okay, I'm just looking at this month right now. And I've sold X amount of boxes, which equates to this much revenue. And I don't really look at those future boxes when I'm looking at that decision-making view, like you said, so I've got my spreadsheet, which is the spreadsheet that we have in Subscription Box Bootcamp. And then I have my , QuickBooks online, which I, you know, discuss regularly with my accountant. We have a, probably three meetings strategy meetings a year because I feel like taxes. And like that's such a moving target. So when we like adjust things a couple times throughout the year based off of , you know, in the summer is our slow season. and then in the fall and, and Q4 specifically, like we pick back up, so we need to like adjust things. So I feel like it's always a moving target , and it can be overwhelming, but if you have that spreadsheet that you get really comfortable with, and then you've got your accounting software, it's, it's definitely manageable.

Jamie:

Well, and I do the same thing. It's really funny cause I love, and I'm a big proponent of having an accounting software, right. I think it's really, really important. It's going to help you with taxes can help you keep track of things, but also having your own, like if you want to, you can do it in your accounting software or outside. I even have some things that I track outside of the system. It's just easier for me to do that. And that's how I like to see my numbers. Right? Like the things that help you make decisions about your business and decisions about your cashflow , you want to be able to see that easily. And that's really going to help kind of inform that. And it's totally fine if that's a little bit different than what your accountant sees, right?

Julie:

Yeah, exactly. Okay. Let's switch gears for a minute to talk about actual taxes, but not the taxes that we pay, but rather what do we charge our customers? I want to hear what you have to say about it. And I know it varies from state to state and it varies on , volume levels and stuff. So what can you share with us about charging the end consumer, our subscriber taxes?

Jamie:

Yeah. Tax is one of those things that, oh my gosh, it's a beast. It's an animal, especially for a product based business. And this is something that now I'm a digital entrepreneur, but it is starting to also impact digital sales as well. And it is tough. And so I do always recommend like people consult with somebody who's knowledgeable in sales tax. Ask that question. Cause not all accountants are super knowledgeable in sales tax when you're selling across borders, which you probably are, right. You're probably not selling everybody who lives in your state. If you weren't, it would be easier. If you were just telling everybody in your own state, you just collect your own, you know, that sales tax rate and you remit it to your, you know, your state and local governments and easy peasy. But when you're selling and this actually changed , this happened a couple of years ago where there was the Wayfair ruling. I don't know if you've heard of that, Julie, but this was where they basically said, okay. essentially people, companies like Wayfair or even Amazon, all of them got around having to charge sales tax to a majority of the states that they sold to, even though they were selling huge quantities in volume. And the reason for that was because they said they didn't have, what's called economic nexus and I'm not going to get super into that. But it's one of those things where it's tricky to figure out. And what nexus just means is you have to pay sales tax to people, to buyers who are buying that live in that state. So if you're shipping something, that's the state that dictates where it's being shipped to where the buyer is, is what dictates where you pay sales tax, but you don't have to pay it if you don't have nexus there. So that was the big fight.

Julie:

For example, I'm based in North Carolina, if I'm shipping a box to North Carolina at checkout, that customer gets charged North Carolina sales tax. However, if I'm shipping to you, Jamie you're in Tennessee.

Jamie:

Yep.

Julie:

You would not get charged that same sales tax. You wouldn't get charged the sales tax at all, as it stands right now.

Jamie:

Potentially depends on the volume you're doing. So it's changed now. It used to be that that used to be the case. Yes. In large, for the most part, unless you had a physical presence in a state. So if you had employees in Tennessee, then yes, you would charge me. But previously it was, you can kind of work around it. If you didn't have a presence in the state, if you were just shipping there, you wouldn't have to pay sales tax. Now that has changed, but there are some great caveats. And what that means is yes, technically if you're selling to other states, you are considered to basically have nexus, you know, just by selling to that state. But you have to sell typically a certain amount of volume in that state now. So you know, the big retailers they're paying sales tax, you know, we as consumers, you can see it when you check out pretty much any retailer. Now you're going to see it cause they are probably, you know, making millions of dollars, smaller businesses. it's not necessarily that way. So for smaller businesses, a lot of times the threshold is let's say like a hundred thousand dollars or a hundred sales in a particular state. That's a common threshold is a hundred thousand dollars. So until you're big enough to sell a hundred thousand dollars in one specific state, that's not your state, then you probably don't have to worry about it. But I do have to say like, make sure that you're consulting with, with an accountant because some states are a little bit different and you know, but for the most part, if you're not selling huge quantities outside of your own state, your own state you have nexus automatically in because you are there. So there's no threshold there. so you do want to pay and collect and remit sales tax for sales that you're making to people who live in your own state.

Julie:

Got it.

Jamie:

But me as a digital entrepreneur is challenging because I don't even know what states people live in. Cause I'm not shipping them anything.

Julie:

That's true. Okay. I have two questions. One is, do they look at that, that nexus, you hit it as an annual revenue or is it like monthly?

Jamie:

Typically it's going to be annual. Typically it's going to be an annual revenue or in an annual sales volume. But again, different states, everybody's a little different, they're working to kind of do some , you know , c onsistent consistency where they're adopting somewhat consistent rules because it is getting a little bit crazy if anybody does, is worried about it. A great thing to use, depending on what you're using for your subscription box is something like either Tax Jar or Avalara. Those are softwares that you can kind of plug in and they will automatically, y ou k now, c ut find those sales rates, you and plug them in and collect the right amount and help you remit the right a mounts b ecause you don't want to be doing that yourself.

Julie:

No, no. And that was going to be my second question. Where can we get more information on this? So I know Tax Jar has a great blog. You can also even just type in like Tax Jar sales tax and then your state, and probably take you right to the right page. And for those of you who are using Cratejoy, there is an app like you can plug in Tax Jar. and then even if you don't use Tax Jar, Cratejoy does have, and most, I would hope most softwares do this as well. They have a report that you can run. So for us at sparkle hustle grow, we run our report once monthly, my virtual assistant does it on , on the first of every month for the month prior, she exports my list of , orders that collected sales tax. And then we submit that to my accountant. We have our processes in place where then she handles the rest from there on out. So it's something you definitely want to keep your thumb on, but at the same time, like Tax Jar can make it really a lot easier for you.

Jamie:

Yes, absolutely. I love those types of things because I just imagine , I mean, there were, there were accountants at one point that were literally doing this coming from having making spreadsheets of all the different, you know, tax rates and all the different places.

Julie:

It changes all the time.

Jamie:

It changes all the time. I just can't even imagine that it sounds like the worst job ever. So that's why I love, you know , this 21st century world that we live in, that we don't have to do that.

Julie:

Yeah. And if you see an order coming through and it's a little different than the order before it's because different is it different counties have different states. And then if you're selling to someone who's in a Metro area, sometimes there's like a city tax. And so yeah, it confused me at first. Cause I I'd see an order come through and that all be the same. And then randomly there , this one that was like a dollar 25 more I'm like they didn't buy something for a dollar 25. It was sales tax.

Jamie:

Yeah.

Julie:

So yeah. Okay. So that's really, really good information. And so far we've covered a lot. We've covered all tactical things. Can we tackle just one little mindset issue before we wrap it up ?

Jamie:

You knowI love this stuff.

Julie:

Yes! Okay. Charging your worth is a big thing for female entrepreneurs. We oftentimes undercharge and that's one of the biggest mistakes I see when it comes to people starting their box business and they start priced out too low. I am guilty. I've been in business for five years now and I've raised my box price three times because things change things like cost of goods can rise. Cost of postage can rise, things, change like , I don't want to work for free anymore. That's a mindset part too . You have to keep in mind that it takes time to put together the box physically, but also to curate it, to do customer service, all those things. This is not a hobby. This is a business. And so we need to treat it that way. So you need to make sure that you're able pull, they didn't come from it. And so I seen you talk about charging your worth before. So what do you have to say about it?

Jamie:

This is one of my favorite things and I need, like, I think right now I need everybody who's listening to this to just like raise their right hand right now. This is going to be like kind of creepy, but really like, I need everybody to say, "I will not work for free".

Julie:

I will not work for free.

Jamie:

I will not work for free. I am worth a lot, a heck of a lot more than that. Okay. So know that, know that even honestly, and I believe this, even in the beginning, right, that we shouldn't like fall for this idea. I know people who say, well, most businesses don't make a profit for two or three years. And I'm like, are you kidding me? That is so not actually true and actually can make a profit , pretty quickly, especially in something that's scalable, like, like this, right?

Julie:

Exactly.

Jamie:

You should be able to make a profit. You should know what your profit is. Maybe you have some fixed costs that you need to kind of break. But for the most part in a subscription box, I imagine most of your costs , Julie, right. Are going to be, especially in the beginning, really variable, meaning like it's your inventory.

Julie:

It is.

Jamie:

Yeah. And so we need to kind of make sure that we are taking that into account when we are, when we're doing some pricing. And when I, when I always used to kind of laugh when people said, like charge your worth, and now I say it all the time, like charge your worth. But like, what does that mean though, Right? Like we all kind of look at that. We're like, okay, but what, what, what does that mean? Like, what am I worth? Like what, like, you know, as a person, as a human being and , and really to me, this is where as a left-brained person, I'm like, okay, let's, let's do some math. Let's, let's put some numbers to this like idea of charge your worth . And what, to me it means is pay yourself a wage that makes sense for what you were doing for what you are putting in and recognize that you have value and your work has value. And if you don't know how to value that. Right? You know, and I don't mean like you as a, as a human, you know, in the world, of course you have value. But I mean, like even in what you're doing the best way to do that, I think when you're trying to kind of price things out, think about, okay, if I had someone else do this for me, right? Like if somebody else was going to do this for me, what would I have to pay them? And I can't tell you how many people are like, why can't hire someone because then I wouldn't make any money in that. And I'm like, well, that means you're not paying yourself enough. Right? Like if you can't hire someone to help you, because you're not making enough money, that means you're not paying yourself what you need to be paying yourself. That means you're paying yourself less than what you would pay someone else to do the job that you're doing. Why are you doing that? You know? And so I think like your calculator, that's what I loved about it, Julie, because it takes this concept of like charge your worth. Right? And, and make sure that you're you're , you know, including that and it , it puts some numbers on it to say, yes, how you figured out your markup . It's, it's math, it's an emotional let's , let's get rid of this. Like I'm not worth it. Who's going to pay? It's math at the end of the day.

Julie:

Yes, absolutely. That, and that's a second calculation. We actually have two calculators. There'll be on that same landing page. The second calculator actually helps you figure out what you're going to charge for your box. And, you know, we, we say shoot for a 30 to 50% margin because there's just so many variables. I talk about constantly about setting yourself a product budget and having the discipline to stick to it. Because the more you go over that product budget, the less you get to pay yourself. But if you head to that subscription box, bootcamp.com forward slash finance, you'll find both of those calculators and what I love, what you're saying about paying other , like, what would you pay someone else to do that? Because when it comes down to it, if you're not making enough from your business, one is not sustainable. Two, it's going to build resentment and you need to approach your business from a place of gratitude, not resentment. And I know we're kind of getting a little woo and emotional here.

Jamie:

A little bit.

Julie:

Yeah. But that's what charging your worth is, is part of that mindset is working through that. And I don't know, like when I , especially when I first started , I was like building these boxes and I just felt so much gratitude, even though I wasn't making any money until I think it was the fourth month is when I got into...

Jamie:

That's fantastic. Right? It's not two or three years.

Julie:

No, it's not. And you know what you are so right about with the subscription box business, as you scale, that's where you have the opportunity to grow that profit, because you're going to, the more product you buy, say, you buy a hundred books versus 10 books. You have more negotiating power, you are going to get a better deal on that. And there's just, there's so many ways that you can provide value without products too. So like adding value with the community, digital downloads, you know, maybe , zoom calls and happy hours and stuff like that. So when you think about that profit and thinking about like the value you're providing with your box, it's not always just the products. So...

Jamie:

Yeah. And I want to say this too. So like I had somebody who went through my program , crystal is her name and she had an Etsy shop, so kind of different, but similar in that she had a practice based business and she was investing a lot of time into it. And until she sat down, like sometimes it can be a little bit tough to even know, like, do you, first of all, before we even get into, you know, any of this, like, do you know what your cost is? Are you aware of like the exact cost of the thing that you're making, right? And , and like, if there's a range, like what is that range? And I think that that's kind of the place to start is figuring out what is the cost of all this and including packaging and including shipping and all of the different things. Like what is the true cost of this? And when she actually sat down and did this for her Etsy business, she realized she was actually losing money. She had no idea that that was the case. She had no idea. And she cried in her closet. This story , it's , it's one of my favorite stories not because of, you know, that she went through that, but the fact that she immediately, she went in, she doubled all her prices. It just like overnight, she's like, I'm done . I don't care. I don't care if I never sell another one. I'm doubling o n my prices. She had her best year ever after that had more sales after doubling her prices. She was so like caught up in this, like, "no, nobody's going to buy". She doubled her prices. She had more sales and every sale, she loved so much more. She felt so much more because she was like, I know I'm making money now, like before, you know, if you're getting a sale and you're like, "oh man..."

Julie:

I'm losing money.

Jamie:

Then you're not making enough money. And so that was a huge mindset shift for her where she was like, "heck I don't even care if I sell another one. As long as I know I'm getting a profit off the ones I sell". Right? Like that's the key know that you're getting a profit and then you won't come to resent your business in the same way.

Julie:

Yes, yes, exactly. And if you start out higher than you're maybe comfortable with, you can always do promotions and discounts, but it's , it's so much harder to raise your price.

Jamie:

It is.

Julie:

So, yeah. So you just talked a little bit about your program. You want to tell everybody what your program is because now is a good time to get connected with you there , the , you and all kinds of like challenges and, and free trainings and stuff. So tell us a little bit about what you got.

Jamie:

We've got, depending on when you're listening to this, we have all kinds of things going on right now. So go to the , the link , that Julie gave out. And then we'll be in the show notes because it'll have all the information where you need to go. Right now, we have a quiz you can take to figure out how to be more profitable. We have a free seven day challenge coming up. That starts September 1st. So if you're listening to it on or around September 1st, you can check out our challenge by going to that site where we're basically, it's a challenge to make 5% more in your business in one week with, you know , and I'm not talking about working more. In fact, you actually may come at the end of this challenge and realize you can work less for more money. That is the dream, right? Like that's what we want if we're gonna do that in seven days. And then , on September 9th, I'm going to be opening my program. It's only going to be open to the 15th of September. So depending on when you are listening to this, if it's between the ninth and the 15th of September, I need you to come check it out. We are closing doors after that for a long time, it's called Financial Fitness Formula. And we're going to be enrolling a whole new class. And it's basically really about stepping into the confidence in making those financial decisions in your business. So , it really piggybacks off of a lot of what Julie's doing here too with like pricing, but then we're going to go into like, how do I know what costs, how do I spend money in my business? You know, how do I forecast out the future? Right. I love at the end of the program, everybody comes out with a five-year forecast for their business. And so , and it gets like all my fun worksheets and things like that, that I'm kind of known for.

Julie:

Nice.

Jamie:

So, so I want everybody to , to definitely, definitely check out all the fun things that we have going on. if you're listening to this and September, if you're listening to this after September, still go to that same place. Cause Julie's gonna update it with where you need to go to get more information as well.

Julie:

Yeah. And you guys, I mean, if you learned anything from today's podcast , just think about what you're going to learn in this program. When you get all these templates and worksheets and you have the support that you need to feel confident in your finances. It doesn't have to always be like that thing that you dread every single month. Like, "oh, I have to finally tackle these". You don't want to drag your feet with us because finances are kind of important in business.

Jamie:

And I'm gonna make them sexy, y'all alright . I want to make them sexy.

Julie:

Awesome. Oh Jamie, thank you so much for taking the time today to break down the basics with us, to talk to us about mindset and talked about taxes and QuickBooks.

Speaker 2:

It's just so helpful. I wish I had someone like you when I was starting my business.

Jamie:

I love, I love that. Well, I'm so glad that we got connected. Julie, I love our relationship. I love being been in your Sparkle Hustle Grow as well, which is amazing . So I just love connecting with you and I love the mission that you are spreading. I think we have really similar missions around just helping women really take control of their life. Right? And, and really grow a business that they love. And so , there's different facets to that, but I think like we're a perfect, you know , peanut butter and jelly.

Julie:

Yes! Oh PB and J. Okay guys. Well, I hope you enjoy today's podcast with Jamie Trull. Again, if you go to subscription box bootcamp.com forward slash finance, we will have all of the links to all kinds of free resources. The calculators, we talked about the challenge and depending like Jamie said, depending on when you're listening, we'll be updating it from time to time. So you can get the most recent updates, the most recent goodies.

:

So thank you as always for listening and we'll see you the next episode. [inaudible] .