008- Running Your Business
How do you track expenses as a small business? How do you smartly manage your time? Is it time to hire an employee? On this weeks episode, we answer these questions, and many more!
Resources:
Taxes suck! What should you look for in a tax professional?
We mentioned Freshbooks in the episode, which is a great option for invoicing and tracking. It’s easy, and free to create an invoice with Freshbooks! Go to: https://www.freeinvoicecreator.com/invoice-template/
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
Collin 0:16
I'm Collin. And I'm Megan. And this is pet sitter confessional
an open and honest discussion about life
as a pet sitter. Hello, and welcome to episode eight on running your business. Before we get to the main topic, I did want to mention that Megan couldn't be here this episode, so it's just going to be a solo episode with me. If you haven't had the opportunity to go and listen to episode six. I really encourage you to go do that. This was our episode with our interview with Beth and Alex. I really want to encourage you guys to go and listen to that one. It's a wonderful resource with two amazing people with quite a lot of experience and a lot to say about pet sitting and traveling. A little bit of follow up from our last episode on boarding We forgot to mention that when you are boarding, you'll need a place for all of the dogs things us for the owner to bring stuff. So you need to make sure you have a place to store all of that. We have a place that's above and on our washer and dryer that acts as a central repository for all of the things that we keep organized with labels that are color coded to the dog. So each dog gets a unique color on all of their items so that we can keep track of where those are. Last episode we also talked about cleaning, but I didn't talk about how we clean. So just briefly, we vacuum in the morning, and in the evening, react. Remember that soft surfaces are your enemy, so make sure you are cleaning those specifically. We like to have our floor rugs professionally cleaned at least once a year to us and this is just personal taste. But to us a clean home should smell neutral. It shouldn't smell like anything, no cleaning products. It shouldn't smell like dog so we use natural organic cleaners that aren't scented and are meant to get rid of as quickly as possible, if we have a house full of active dogs or dogs that
are outside quite a bit playing,
sometimes it's really hard to get the smell of dog
out of the air.
So we will use a diffuser with some good smelling oils, just to make sure that it's smelling nicely. Something else that helps with that is to make sure that you are having really good air circulation. So we have our blower set to run about 55 minutes for every hour. Whether it's heating or cooling. Sometimes the fan is just blowing that helps filter the air and make sure that their circulation you don't have dead spaces. You can also have a fan or two running in the house at all times. Again, keeping that air circulation so everything smells smells fresh, opening windows when you can when the weather's nice outside. Again, the biggest thing you can do to combat settling of smells and dealing with odors is to make sure you have good air circulation of clean air. Now the main topic, your business. You are a business so you have to act like one That means there's a lot of things to consider. The first thing that usually comes up in discussion is insurance and whether you should have it or not. You need to protect yourself. One of the things you need to think about
what happens if a dog that you're caring for gets out
molds through the door and bites a neighbor, who does that fall on? And are you going to be protected? additionally, what happens when a dog that you're sitting, tears up your stuff, or destroys your flooring, or eats through a wall? So where do you get it? Well, if you're with a
rover, they do have a protection plan
that you are covered under if you book through them. Remember, it's not insurance, it doesn't cover you the same way that typical insurance does. So make sure that you're as covered
as you think you are.
A lot of people also get insurance through pet sitters international prefer pets it LLC protect equity, and you can also look into your own and current homeowners or rental insurance
to make sure that you have the right
things added to those policies and whether they would or wouldn't cover in case of an incident. Because you also have to think it's not just the dogs coming in and out, it's also the owners. And if somebody gets injured on your property, that could be a big issue. During the last ice storm up here, we actually did have a client slip and fall really hard on our sidewalk coming up. She didn't say anything about it, but it was kind of a scare to us to get us thinking about making sure that those kind of things don't happen and that our house is accessible and safe for not just the pets but also the owner. The next thing you really need to look into when you're starting up your business is to think about contracts. Get one Like, seriously, get one. We actually started by getting our first one written up by a legal help group for students at the college that we were attending. The service was provided for free. They typically provided legal services that were mostly about rental or rental of disputes, payment disputes, Other things. But
when we approached them with this,
this idea of drafting a contract that we could give to our clients, they were really excited and happy to work through that. So some of the basics that they pointed out to us is that even if you have insurance, the contract should waive any right to sue you. If something bad happens to the dog or the person while the dog is under your care. It should also in some way, give permission for you and acknowledge that you are going to do the best you can to serve the best interests of the dog. It should in some way state the payment terms and conditions and if there are any late fees, what your cancellation policy is, depending on what service you're providing expectations for what the owner is or is not to provide. And something that we added was an emergency contact information form
that to attach to that,
once you've worked through those two major things. The next item on the big on the list that's really big for small business owners
is tracking your expenses.
So what kind of things can you track you can log your insurance or fences, your mileage or gas, but not both. You cannot log and file taxes on both mileage and gas, it's going to be one or the other, the supplies that you have to buy to support your business. So cleaning supplies, dog supplies, food, crates, that kind of thing. If this is going to be based out of your home, typically you can track in right off your internet, your phone, and something that comes up quite a bit is carpet cleaning. That's a service to keep your business clean and is a business expense when you're tracking miles. It's wise and kind of just good ethics to track miles between care but not miles to and from your home. That is unless you have your home claimed as a home office, which you totally should dedicate an area actually set out an area that's only used for office and business duties. And you have a home office. You make sure you're keeping your receipts if you claim gas and you can't or again, I just want to reiterate this you can't claim both gas And mileage, you have to pick one. As far as keeping track of all of this stuff, you'll have to decide if you're going to keep paper or electronic copies for your receipts. And as we do, it's not a bad idea to keep both so that you always have a backup and making sure you're keeping them organized. Some of the common apps for tracking these things mileiq is great for tracking mileage. Just a basic Excel spreadsheet. You can use QuickBooks pen and paper, fresh books is another great option. Time to pet is one and then you could also think about hiring a bookkeeping service. There are lots of internet based bookkeeping services these days, so you don't even have to have one in your area. An example of that is one like Park when that specializes in small businesses. If you're not going to be involved with a pet sitting platform, you're also going to have to consider scheduling software. It is so important to keep track of your dates and times. And then having those in multiple places so that you always know what's next on your calendar. You obviously do not want to forget about a meet and greet or a Drop in, or somebody who's dropping off their pet and your home, and you'd be busy or doing busy doing something else and completely miss it. So setting up alarms and reminders is also a good option and idea too. So whether it's for you or an employee, you want to make sure that you're doing reviews each week and over each day schedule ahead of time. Megan and I do regular check ins to discuss the upcoming week and, and we'll go over the next day's activities, especially if it's going to be really busy. That way we can make sure we're dividing duties and responsibilities appropriately, making sure all of our obligations are covered. So you can do this very simply with a diary, pendant, eraser, eraser, sometimes important when things don't always work out. You can use precise Petcare for scheduling invoicing and client info, although the app can be a little glitchy on that. So again, having backup of these is always a good idea. Time to pet pet sitter plus leash time and And as I mentioned at the beginning of this, if you are going with an established platform, that's all this stuff is going to be taken care of through them. Although it's not a bad idea to yet again, have a backup, you can use do timely, calm, or put everything in your phone, Google Calendar, which is what we do. So since we use rover, predominantly, all of our calendar and scheduling is done through there. And then we put all of those appointments and obligations into a shared calendar between Megan and I, so that we have it on our phone and easy to reference. Once you've decided how you're going to track your obligations, for taking care of clients, you can have all of the app tracking and everything written down and all of that in place. But you could still be missing a major component of that, which is time management, that tends to get pushed to the side because we don't really think it's that important. We want to be busy. We want to be serving as many people as we can and always working. However, there is a point at which you could become overworked, you can become less efficient. And you could actually start doing a worse job. If you're not actually seeing how you're spending your time. It's more than just putting things on the calendar. It's realizing what your limits are, it's trying to understand and get a better idea of where your time needs to be spent. And what gives you the biggest bang for your buck. So for you, and where you live, that may be doing dog walks all day, every day. However, if you don't set up your days, so that you can effectively do the dog walking, you're not going to be as efficient at it, and you're not going to make as much money.
When we were very busy doing house setting
where we would go into the client's home. That takes up a lot of time. That takes up a lot of energy and resources. And it's very hard to sit multiple houses at the same time. And so that's not always the most efficient way to do that. Now, you won't always see that if you're just out there and you feel like you're busy and you are making money. So it tends to work out. But until you sit down and look at where your time is going, and how much money you're actually making, you've got to put those two pieces of the puzzle together before you can actually start seeing how you should be running your business. And that's all tied up in making sure you have good time management. And again, that's understanding where you should be spending investing your time so that you can get the most out of it
for your income
to remember your business and part of business is making money. So how are you going to take payment and the two really common ones are going to be square and PayPal. And both of these service was will actually send you a free card scanner that you can plug into your phone so that you can take credit card payments directly in front of the in front of the client and they can sign it and get a receipt and all that. You can actually also send invoices through those programs as well. Fresh books is another great option for invoicing and they can pay directly through there and obviously everybody's favorite with this is going to be cash because That makes accounting a whole lot easier. As I mentioned a couple times already know if you're with a service payment is going to be already taken care of remember, though, that they are going to take a cut out of whatever they have to process. Obviously, this has pros and cons. And we decided ultimately that for
us, it wasn't
worth having to manage all of that. So we've stuck with a platform up until this point. Otherwise, if you're going alone, you'll have to decide when and how often you're going to invoice and definitely have a contract again, in that contract that I mentioned earlier, that states what happens if they don't pay? And then, depending on what client Are you going to have paper copies, email, phone, receipts, all that kind of stuff needs to be thought about and think of the options of if somebody doesn't want a digital copy, are you going to be able to provide paper copies to them? Again, as I've mentioned multiple times to this and just as a reminder, all of these services are generally taken care of, for better or worse if you decide to go with a platform like
rover and wag. But
a big downside to that is that you Don't have full control of your business stack from top to bottom, and you are for better or worse reliant upon that third party. So if they are delayed in getting the payment to you, that's something you're going to have to deal with. If they don't invoice properly. You don't have any say over that. If you decide to go with a platform, and stay private, you'll have to decide on how you want to keep them separated. As I mentioned, since we use rover, we still do put everything in a shared calendar between us. We also keep our care info for each pet, in a spreadsheet, and Word documents for each client that describes specifics for each of them how the previous day went any oddities about the path that we need to watch out for, and also any specific things that the owner mentioned during the meet and greet. So we keep things pretty basic, and we also track our income, expenses and expenses through just a typical spreadsheet. Now, if we were ever to hire employees, though, we would absolutely ditch this basic setup. Go with a multi more full featured tracking and filing system. Another thing to keep in mind is that most of the options that I've mentioned here are software and computer based. So if you lose access to them, you might be screwed. If you don't have your phone, and you don't remember what your next appointment is, that's a bad thing to having a backup of digital and hard copies is a great option. And it's something you really need to make sure you're doing so that you don't get in a bad spot. Now, all of this discussion up until now has kind of avoided the big topic in the room, and that is taxes. Now, right off the bat, I want to say that neither Megan nor myself, our tax professionals are accountants or any of that. We are simply people who have filed small business taxes for several years now. So this is all based on our experience in this process. Your mileage will and probably should vary. So you have to decide how you're going to file a sole proprietorship, as a LLC, C Corp, S corp, nonprofit, you know, however you decide your services best fit in with that is where you need to go. We we file as a sole proprietorship, because it's a little easier given our circumstances and some other things. But you should definitely check with a tax professional about your specific situation I cannot stress that enough is that this isn't really something to mess around with and kind of winging it off the cuff. If you have questions, and as soon as you start going into business taxes, it is definitely we're sitting down with somebody, at least one time to get everything set up in a good solid way. As a general rule, we set aside about 10% of whatever we make to go towards paying taxes. Some most of the time, it's a lot less than that, but it's it's a way of just making sure that we have enough so that we're not hit with a huge tax bill. We actually do pay our taxes quarterly, again as a way of avoiding at that big hit at the end. Because if you just take everything in, you don't send anything off the side, and you spend everything, or you put it to other uses, when that big bill comes in at the end of the year, where's that money coming from? So you have to plan for that. And like I said, just a 10% rule is a good way it's easy to remember and it's very simple to set up. rover and wag, I want you to hear this rover in wag and other platforms will not send you a 1099. Again, if you're with a platform, they will not send you a 1099 but you are still responsible for paying those taxes on that income. Now, when you do go to pay taxes, and everybody's favorite time of year, I know but pull out all of those expenses that you've been tracking and keeping night neatly organized and itemize your deductions and see what's going to work best for you. Again, maybe that first time you go to file taxes, sit down with that professional and make sure you're doing it right. And then as you get the hang of it and you get accustomed to the software and what you can and cannot track, subsequent years, you may be able to do it by yourself. But I strongly recommend that first year sitting down with somebody who knows what they're doing, who has done it before, and having them walk you through that process. It is, you know, you you, you probably have to pay money for that service. But it is so nice to sit down with somebody who can just walk you through step by step, instead of staring at Turbo Tax software, or whatever you choose to do, or however you choose to file, pulling your hair out trying to know I don't know how to make that measurement or what in the world. How do I know what that means? to just take all that stress away, put that money towards making sure it gets done right. Now one of the last questions that typically comes up after somebody has been doing pet sitting
for a few years. They've got a really good client base is when is it time to hire employees
Now right off the bat, I will say that
Megan and I have not hired anybody to start pet sitting under us. However, we thought through that process of what would that look like? And we've reached out to other people about what what they thought about. And a couple things pop up. The first thing, first clue. first clue that's going to come up is you should think about hiring an employee when you're too busy. And yet you want to slash need to keep growing. Obviously, one of the first steps you should try and do is raise prices to meet that need that you have for more income. But if you still want to or need more growth, it's definitely time to look into more employees. Again, as I said, we do everything ourselves.
It's a little easier for us because there are two of us.
So there is that, but it has come up in conversation a couple times between us about what would be that trigger for us. What's our number? how busy Do we need to be? Another clue that it may be time to hire an employee is when you start wanting to or sometimes needing to step away and move on to other things. This is if you feel like your time is better spent managing, than actually doing the sits, you can hire an employee to do them. It may also be that you start having other commitments above and beyond pet setting. But you don't want to let the clients down and you still want that to move forward. So you hire somebody on to do some of the tasks that will allow you and free you up to do other things that you start wanting to do. Obviously, you'll need to pay them what they deserve. Hear me know, they're not going to be as awesome as you trust me. They're not going to be as awesome as you are right off the bat. But as you know, it's still hard work and they're going to gain experience. pay employees what they're worth and for the job that they're doing. Now, since you're an awesome business owner, depending on how you file your taxes and how you pay them, you may be required to send them a 1099 So be ready for that. Again, speak with an accountant to better understand your specific situation and what you're legally and ethically required to do for the employee. You obviously want to make sure you're doing what's right. And more importantly, what's best for the employees. Don't put them in a hard spot just because you want to avoid some paperwork. That's not okay. Now, if you do decide to hire an employee or two, to start taking on some responsibility, you'll obviously want to be able to track what they're doing and making sure that they're doing what they say they're doing.
And there are two things that come up.
You can use time to pet which is a great tracking service. You can see updates view services as the pet sitter, and it lets the clients put in their request for scheduling. So it's kind of a full featured service there.
Then you can also use a service called precise pet care.
Now I know that's been a ton of information for running as a business and I'm sure we've missed some assets. perspective there. So if you have comments or feedback that you'd like to give to us, please reach out to us, either on our Facebook page, or through our email. We'd love to hear back from you and get a conversation started about your experiences running your business. Coming up next week, we have quite the interview in store for you guys. Kelly Hayes rate admits she sleeps around. So usually with the animals. She's a full time house sitter and traveler and she's been that for the past decade. Now she has quite a lot of experience and she's learned a thing or two and she's got this great book how to become a house sitter insider tips
from the house it diva. Now
she comes on to our show, and she discusses how she got started. Some of the ins and outs of how she goes about doing the kind of pet sitting that she does and shares several amazing stories and experiences that she's had along the way. We definitely want to make sure that you guys don't miss that episode. So if you haven't already going to iTunes, Google Play Spotify, our heart radio tune in where You listen to podcasts and make sure you subscribe to us there. That way you'll never miss a new episode. Obviously, we'll keep posting to the Facebook groups to keep you updated and these will always be available on our website. But it's a great way to make sure that if for any new content that we put out, you're not missing. You can find us at pet sitter confessional.com join our Facebook group sitter confessionals, and also like our page pet sitter confessional on Facebook. We're also on Twitter, PS confessional and on Instagram, at sir confessional
until next time
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