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This episode is sponsored by Clariti.
Welcome to episode 401 of The Food Blogger Pro Podcast! This week on the podcast, Bjork is kicking off the Habits Series on the podcast with a discussion about monthly reviews.
Last week on the podcast, Bjork celebrated 400 episodes of the podcast and shared 4 main themes he has taken away from all of those episodes. To go back and listen to that episode, click here.
Why You Should Start a Monthly Review of Your Business
This solo episode with Bjork is the first in our Habits Series, in which Bjork will dive into simple, but effective habits that you can (and should!) incorporate into your business.
Bjork explains the concept of a monthly review of your business’s finances and analytics, and how it can benefit your business and help you think more strategically about growth.
It’s a really informative listen, and we hope you’ll take away some helpful tips and tricks that you can incorporate into your business moving forward!
In this episode, you’ll learn:
- The importance of a monthly review of your revenue, expenses, and profit.
- How to get started tracking your business numbers with a spreadsheet.
- Why you should separate your personal and business expenses.
- How to think strategically about losses and expenses in your business.
- How your bookkeeping and monthly review process might evolve as your business grows.
- Why a monthly review can help you be more intentional about growing your business.
- Atomic Habits
- Pinch of Yum Income and Traffic Reports
- Join the Food Blogger Pro Podcast Facebook Group
About This Week’s Sponsor
We’re excited to announce that this week’s episode is sponsored by our sister site, Clariti!
With Clariti, you can easily organize your blog content for maximum growth. Create campaigns to add alt text to your posts, fix broken images, remove any broken links, and more, all within the Clariti app.
Sign up for the Clariti waitlist today to receive:
- Access to their limited-time $45 Forever pricing
- 50% off your first month
- Optimization ideas for your site content
- An invitation to join their exclusive Slack community
- And more!
If you have any comments, questions, or suggestions for interviews, be sure to email them to [email protected].
Transcript (click to expand):
Alexa Peduzzi: This episode is sponsored by Clariti. That’s Clariti.com. Do you have any plans to optimize your content this year? Maybe you’re asking yourself the same questions that tons of other creators, bloggers, and website owners ask themselves too. How do I know what to change and optimize on my site? How do I know that what I’m actually doing is moving the needle? Well, with Clariti, those questions are easy to answer. Clariti is the content organization system for content creators. It automatically syncs with your WordPress content and Google data so that you can make quick decisions and track the impact of your optimizations. For each post you’ll be able to see and track data, like page views, ranking, keywords, click-through rate, and impressions. And then you can create customized projects for your optimization efforts to help you stay organized and make progress each and every day. Listeners too of the Food Blogger Pro podcast get 50% off their first month of Clariti by signing up to the wait-list. To sign up, simply go to Clariti, that’s clariti.com/food. Thanks again to Clariti for sponsoring this episode.
Bjork Ostrom: Hey, there. This is going to be a short solo episode. It’s a little series that we are doing all about habits, and there’s a great book called Atomic Habits. One of the reasons that I love it is because it parallels some of the thoughts and ideas and beliefs that we have around TinyBit, getting a tiny bit better every day forever. And the idea of Atomic Habits, the idea behind the book, is that you have these really small habits, and if you stack those habits up, over time, the end result is a huge impact. But it comes from really small changes and small improvements, small habits that you have that result in that big impact over time. So I’m going to be talking about a few of these habits that you can think about getting into for your business specifically.
And the first one that I’m going to talk about here today is a review, a monthly review, and specifically a review of your revenue, your expenses, and the resulting profit from those. Within that, you’re also going to be reviewing any of the things that you’re spending money on, so kind of the recurring charges that you have within your business. And it might sound simple, like a really basic thing that you do, but what I found in doing this for businesses is it’s one of the most beneficial things that I’ve done because it forces me to reflect and also to look forward.
And those who have followed the journey of Pinch of Yum know that for a season, one of the things that we did was we did reports, monthly reports, income reports, and traffic reports. Hey, here’s where we’re getting traffic, here’s where we’re earning money, here’s where expenses are coming in. And one of the things that was most helpful for me in doing that was a forced period of time to step back and to go through and check all of the things, to look at the numbers, whether that be Google Analytics, or whether that be the expenses, or whether that be the revenue.
And what that did is it helped me to navigate moving forward. So by looking back, I could make decisions looking forward on what to do and decisions to be made. So what does that look like? I think there’s a few different levels of how you can go about doing it. For those who are early on, you’re probably not going to be officially doing things in QuickBooks and having a process and definitely not using a bookkeeper. But the easiest way to do it is just to keep track on a spreadsheet. Now, before we get into that, one of the things that’s important to point out is as early as possible, you want to start separating out the expenses that you have for your business from your personal life. Not only does that make it easier for you to track and get an understanding of business expenses and personal expenses, but it’s also an important thing to do from a legal perspective.
Now, it’s not a huge deal for businesses like blogs or Instagram accounts or whatever it might be because there’s not a lot of legal risk that exists within those. But one of the things that’s important to consider is this idea of the corporate veil, which is a fancy way of saying that your business life is different from your personal life and the thinner that veil is, meaning the more you maybe commingle funds or you pay for stuff out of your business that’s personal and personal stuff from your business, the thinner that veil gets and the less protection there is for you as a business owner.
And so not only does it make it easier to track your business expenses, if you separate that out into literally a business checking account, that’s what we’re talking about here, so you’re not using your personal checking account, but it also allows you to have that corporate veil and to start thinking about the separation of your personal life and your business life. Other things that you’d want to do with that, you’d want to think about setting up, if you’re in the US, setting up an official LLC, limited liability company. You’d have your own EIN, which is kind of a social security number for your business. So all of these little things that add up to building a corporate veil.
But one of the things that’s nice about separating out your business account from your personal account is then you’ll be able to more easily log into your account and say, “Okay, let’s look at the past month. What were the sources of income? Where did income come in and where did expenses go out?” And if you’re early on, the best way to do that is just a spreadsheet. So in my case, it would maybe be saying like, okay, January, let’s take a look at January. We’ve moved through the month of January. Let’s say January wraps up. We know that we’re not going to have any other expenses happening in January. So what you do is you’d log into your business bank account.
And if it was me, in the early stages, I would literally copy and paste this information. There’s programs that will do it for you, but I think when you’re first getting started, copying and pasting, because you won’t have many transactions, so you get a really good idea of what’s happening, what’s going in and what’s coming out of your business on a spreadsheet. And then you can look at it. And that’s basically a profit and loss statement. So you have the revenue that you have coming in, the expenses that you have coming in, and at the bottom of that is your profit or your loss. It’s possible that especially in the early stages, you might not be making income, you might not be making a profit, so you’d be having a loss.
And some people would say, “Ah, why would I do all of this work to do bookkeeping when I’m not actually making any money?” Well, the reason is, and you’d want to check with your tax professional on this, but as you’re getting started, the losses that you are creating within your business can be used when you’re doing your taxes as a deduction against other income that you’re making. So let’s say from your W2 job, you make $50,000 and you took 10,000 of that and you invested it into your business to work on growing and building and scaling. And let’s say you made a thousand dollars, but you spent $10,000. You have a loss within your business of $9,000, but that can be used in your taxes as a deduction against the income that you have from other areas.
So instead of then paying the taxes on the $50,000 W2 income, you’d be paying taxes as if you made 41,000 because of the loss that you have within your business. So you can start to see why so many people have a side hustle, why they have a business, and why they start to think about directing certain expenses into the business. Now, you only want to do this insofar as it’s actually a business expense. But let’s say you use your phone 50% of the time for posting to social media. Suddenly those costs associated with your phone go from being pre-tax, meaning like you get money that’s taxed and then you pay expenses, like your phone bill. That would be if you have kind of a normal W2 job. But if you have a business and you can pass some of those expenses into the business, you’re paying for them before you pay taxes. And that’s beneficial because it’s before tax income. So it’s a cost savings in a way. That’s not exactly the right way to look at it.
But you’re starting to think strategically about where expenses go. And it’s one of the great reasons why it’s smart to have a side hustle and why you want to be strategic about directing some of your expenses insofar as they are actually business expenses into the business. So you can start to see not only the high level benefits, but also the specific benefits of starting to understand what’s happening on a month to month basis with your business. And it can start with something as simple as a spreadsheet. And the habit here is taking a day or a half day or two hours, whatever it is, every month, and setting aside time to review that information. And I think it can start really basic with a spreadsheet.
Now, if you want to level up, you can use a program like QuickBooks or there’s another one called Xero, with an X, that a lot of people use, and you can start to learn that software and that program and start to enter those expenses in. It’ll be a little bit more automated. So that would be the next evolution. But I think it’s good to do in a manual way when you’re first getting started to get really familiar with the numbers and to literally copy them, paste them over to see them, to feel them, and to not have it be automated right away.
But the next evolution would be to QuickBooks. And then the next evolution after that would be to use an actual bookkeeping company. Now, for the TinyBit companies, we use a service called Pilot, which is admittedly an expensive bookkeeping solution, but there’s lots of people who know bookkeeping, who are good at bookkeeping. They may charge an hourly rate. And if you’re in the early stages of your business, it’s probably not going to take a ton of time to do the books. So it might be an hour or two for somebody who’s really good at bookkeeping every month to go in to categorize things.
Maybe they’ll have some follow-up questions for you, but for the most part it should be pretty simple. But that would be the third level would be to actually work with a bookkeeping company or a bookkeeper to do your books for you. They would send over a recap. And then you still have the habit of reviewing this information, but you are no longer compiling it. You’re no longer creating the information and analyzing and reviewing it. You’re just looking at the recap that somebody sends you.
And we do this on a monthly basis for all of the companies. Once a month, the bookkeeper that we work with, the bookkeeping company Pilot, will send over a recap. They’ll say, “Here’s what it looked like. Here are the questions we have.” Maybe if there’s a unique expense that they weren’t sure how to categorize, they’ll ask a question about that. We’ll potentially give feedback on things. But what we’re looking for are trends. So hey, over time, are we spending more in a certain area? Are there maybe expenses that are coming in here that shouldn’t be?
So it’s a review of the expenses kind of line by line. And what we do is we literally go through in QuickBooks and we look line by line and we say, “Do we know what this is? Do we understand what this is? Is this something that we actually need?” And then move to the next line and say, “Okay, how about this one? Does this make sense? Do we have any questions about this?” And it’s a methodical review of the books. Not only does that allow us to see what’s happening on a month-to-month basis, but it also allows us to catch anything that maybe shouldn’t be there.
So the result of implementing this habit can be both beneficial in terms of looking back, so you have a better idea historically of where things have been, what’s happening within your business, where the numbers are at, which is helpful even for things like planning taxes. But it also allows you to look forward and say, “Are there other things that I could be doing?” For instance, is there another way that I could be increasing my revenue? And maybe you’ve capped out at your page views. It’s been really consistent and you’re getting a hundred thousand page views a month. And you can see from that hundred thousand page views a month, you’re getting $1,500. Or to make it easy math, we could say $2,000. So you get a hundred thousand page views and you’re making $2,000 a month, that’s awesome, and that’s really good. And maybe you have $500 of expenses. So you have $1,500 that you’re making from your site a month.
One of the things you could do is say, “How do I increase page views?” But another thing that you could do is you could think, “How do I increase revenue if I weren’t going to increase page views at all?” And you can start to look at your business not as something where you need to increase followers or something where you need to increase page views. But you can instead look at it as a business and you can look at it from the book’s perspective and you can say, “What are the things that I can do to increase revenue?”
And it allows you to think a little bit differently about your business, where sometimes we can get trapped in page views and followers, impressions, and we kind of assume the income side comes after that. Like, “We just need to bring in more people so we can get paid more.” But instead, when you look at the books, when you build the habit of a monthly review, you can start to think more strategically about the revenue side of it, the expenses side of it. And as you think about increasing revenue, you can also think about decreasing expenses. Maybe you can catch some of those things that you don’t actually need to pay for, or potentially you could call your cell phone company and renegotiate and be paying less. And these habits of reviewing, specifically reviewing the books, will help you not only to have a cleaner business, but it will also help you to think strategically in ways that you might not if the only way that you’re looking at your business is from a follower or page view count.
So these are short episodes. That’s it. That’s all that I wanted to share with you. But it’s the habit of a monthly review specifically around the business mechanics for your business. And as a reminder, this is important to do even if you’re in the early stages, because inevitably, even if you’re in month one, two, or three, you’re going to have expenses and you can use those strategically as you think about the big picture, your big financial picture. So it’s not just the business but you personally or you for your family, as you think about your finances, this fits into that, even if it’s just expense based, because that all rolls up and has an impact on your annual income and the taxes that you’re paying.
So think strategically about it. You can start really small with a spreadsheet. You can work to a point where you’re maybe working with a bookkeeper as your business grows. But as long as you build in that habit of the monthly review, you’re going to be much better off because of it. And as a last note, for those who haven’t, Atomic Habits is a great book, ties really well into TinyBit and getting a little bit better, tiny bit better every day forever. And that’s what we’re going to talk about in this series, all about habits and the little things that you can do. So stay tuned. Next week we have another one. But for now, get back to it. Have a great week, and thanks for listening.
Leslie Jeon: Hello, hello. Leslie here from the Food Blogger Pro team. We really hope that you enjoyed this week’s episode of the Food Blogger Pro podcast. Before you sign off, I wanted to mention one of the most robust features of a Food Blogger Pro membership, and that’s our courses. So in case you’re not familiar, as soon as you sign up for a Food Blogger Pro membership, you immediately get access to all of our courses on Food Blogger Pro. And we have lots and lots, hours upon hours of courses for you to check out, ranging on all different topics, from SEO, to photography, to video, to all types of social media, Instagram, Pinterest, TikTok, YouTube, the list goes on and on. And all of these courses have been recorded by our Food Blogger Pro team or by our industry experts, by all of the Food Blogger Pro experts that we have on our team.
And we are constantly going in and updating old courses so you can rest assured that you’re getting the best information possible as you’re working to grow your blog, to grow your business. The courses are the best way to learn how to do that. So like I mentioned, you can get access to all of our courses by joining Food Blogger Pro. So if you’d like to do that, you can go to foodbloggerpro.com/join to learn more about our membership and join the community. We really hope that you enjoy checking out our courses. They are one of my favorite parts of the Food Blogger Pro membership just because we have so much knowledge for you to check out there. I think that’s everything we’ve got for you this week though. Thanks again for tuning in and for listening to the podcast. And until next time, we hope you have a great week.