felixncharlie Posted July 31, 2008 Share Posted July 31, 2008 I have listed everything I use in making a candle i.e. wax,jars,wicks,scent etc etc but do you charge for your insurance that you pay for? If so how do you work it into a candle price?? Quote Link to comment Share on other sites More sharing options...
flutterbye Posted July 31, 2008 Share Posted July 31, 2008 I dont charge for it. I dont feel that insurance really has anything to do with the actual physical product the customer is purchasing. Well, technically it does....but not from a customers purchasing point of view. I'm sure people do, but I keep that, website hosting fees, business phone usage, things like that seperate. I do figure in a portion of my elecricity usage into my labor costs for the product. Quote Link to comment Share on other sites More sharing options...
ebcandles Posted July 31, 2008 Share Posted July 31, 2008 Dont forget labels and labor. Those items can really add up. Quote Link to comment Share on other sites More sharing options...
Stella1952 Posted July 31, 2008 Share Posted July 31, 2008 Of course the insurance matters - you wouldn't have it if you were not making candles, right? Insurance is part of the cost of doing business, as are licensing fees, tax preparation, association fees, sales taxes, property taxes, etc. This is where a good bookkeeping program (such as Quickbooks, Peachtree, etc.) can really help no matter how small your business is because how certain items are figured into the bottom line is different and tracking and factoring them in is extremely tedious to do by hand. For example, cost of equipment items (melting pots, heat guns, thermometers, scales) are amortized over the expected life of the item and then averaged and added to the other bottom line figures. Fixed monthly or yearly costs have to be broken down and applied as well as varying monthly costs (such as utilities). Items you manufacture (candles, soap, lip gloss, air fresheners) are tracked slightly differently from items you purchase for resale (warmers, wick dippers, etc.), but the actual cost of the business is shared by every item sold - dollars out versus dollars in.EVERYTHING spent on a manufacturing business should be factored as part of the bottom line cost, including utilities, insurance, show fees, advertising, paper, scissors, telephone, paper towels, gas & time (labor)!!! "Everything" means literally, every stinkin' little bitty thing!! Home businesses are tough because our overhead costs are frequently mixed in with our personal living expenses. What about the cost of the space used in your home for candlemaking? Is it dedicated space (an extra bedroom) or shared space (like your kitchen or dining room)? It really helps to have EVERYTHING separated because it's FAR easier to figure that way. Your receipts are your best friend and should dutifully be entered as they are received (don't let them pile up!). Many home businesses fail because people do NOT figure in EVERYTHING they use (ie. pay for) for their business (including paper towels, internet service, printer ink and garbage pickup)! Labor is another BIG item that home businesses frequently do not figure accurately. Every minute of time spent on your business (except laying awake at night worrying about the cost of wax) is part of your real labor cost, including bookkeeping time, clean-up time, driving to and from the post office, ordering, etc. The amount of detail needed rises with the amount and diversity of the products you are selling, so getting in the habit of figuring everything separately from the start is much easier than starting when your business picks up to a certain point. If you are selling only 2 dozen candles a month, many folks don't feel the need to know exactly much paper towels are costing them, but if they had 10 employees, it could become a significant place where a business is leaking money. Arguably, because small businesses have higher costs (because of not being able to take advantage of volume discounts), one should watch even more closely to determine if you really ARE making any money or if you are doing all this work for 50¢ an hour... or less! *faint* Quote Link to comment Share on other sites More sharing options...
Love2Scent Posted July 31, 2008 Share Posted July 31, 2008 I agree with Stella 100% Our accountant was wonderful with us the 1st year we were in biz. He gave me a list of expenses I never dreamed of including in our biz (many listed by Stella above). We took him our books every quarter for the 1st 2 years and he went over them and told us things we needed to improve on and things we were doing correctly. Now (10 years later) we have such a good system in place that we only need to see him at year end (and the occasional phone call with a question or 2). I agree that you need to include EVERYTHING and every square foot of your home that is used by your business. Our office is in the corner of the family room so that SQ footage is included as well as a % of the kitchen and the entire area for our actual shop. Internet charges, heating costs, etc...we give the total of these things to him and he determines the correct % that is attributed to the business. Ok, I'm rambling now, LOL! Quote Link to comment Share on other sites More sharing options...
flutterbye Posted July 31, 2008 Share Posted July 31, 2008 Ok, I'm starting to rethink some things here....I don't add a lot of stuff in to the cost of my candle when setting my prices, such as insurance, show fees, and annual web/cart costs. I was under the impression that at the end of the year, when filing your taxes, I submitted those such fees and the square footage of my shop, etc. as costs of running my business, but not in setting my prices/figuring in my cost per candle. I've gone and confused myself now.... Quote Link to comment Share on other sites More sharing options...
Stella1952 Posted July 31, 2008 Share Posted July 31, 2008 It IS confusing somewhat! I think of my business as a big purse. It starts out empty, so I put money into it from my other purse (startup capital). Every single thing I buy for my business comes outta that purse. If I get a refund on my business income taxes, that money goes back in the purse along with the money I collect from customers. The income taxes really don't matter - that's either a debit or a credit - it's how much it costs you outta your money purse every time you do something and whether or not there is any money in it to operate and pay yourself (oh yeah, ya gotta pay yourself, too, even if it's an IOU). Quote Link to comment Share on other sites More sharing options...
felixncharlie Posted July 31, 2008 Author Share Posted July 31, 2008 Thanks everyone- Stella will you be my accountant??? Awesome info Thanks Quote Link to comment Share on other sites More sharing options...
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