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The WyzGuy Radio Show with Jason Michael -Helping Today's Glass Artist Think Like an Artistic Entrepreneur

May 6, 2016

Episode 103- Why you need an Emergency Fund

  It was recently brought to my attention the potential devastating effect a simple injury can have on a professional artist.  If the body is injured it is unable to perform at its highest ability hindering the artist from being productive and losing the ability to create their income.  Has this ever happened to you? Have you cut or burnt yourself that you were unable to use your hands for more then a day? I have!! About 10-years ago while working late one night the tubing that I was laying some color stringers inside of cracked, fell apart and exposed my left hand to my torch. The flame made a direct hit on the nail bed side of those fingers which put me out of work for almost a month. I was right in the middle of a large commission so having good timing and financial luck on my side I was able to pay bills, rent and survive. Had I not had that deposit I would have been screwed. 
     This brings us to the importance of an emergency fund. The emergency fund isn't just their for thr business to survive. its also to help continuing to pay yourself while out of work.. that being said if you already have a personal emergency fund then this doesn't necessarily pertain to you. If you have a personal emergency fund of at least 3- months of expenses(food, water, shelter,etc) then you are golden and can relax and heal faster. If not then what do you do?   One can be resourceful and this episode isn't about solving that problem. This is about be proactive and setting aside an emergency fund for your business and here's one way to go about making this concept reality. 
     Hopefully by now you have gone through the process of determine how much you should pay yourself either daily, weekly, or bi-weekly. If so you have a set amount you need to earn in order to pay all your personal stuff which should only come from the profits of the business.(refer to Episode 84- Base cost calculations)  The worse thing you can do to yourself is to get into the habit of selling an order, say for $500.00 and automatically considering that you just made 500.00    
Dont lie to yourself,you didnt make $500.00, your business made $500.00 and now you have to pay the business First.
subtract the appropriate amounts needed to ensure you are covering the material cost, daily cost to run the business as well...your power, water, cable, WiFi etc. if you are a home based business you should still treat the space as its own entity which come in handy as a tax benefit towards the end of the year. 
once you have that figured out your left overs or Net is the profit.  
for example....
$500.00 sale-cost $150.00 to produce in material costs=$150.00(gas,glass)
                  power$5.00/day(took 3 days to produce)=$15.00
                  misc bills $3.00/day(""""")                     =$30.00
total cost------------------------------------------------------=$195.00(cost)
sale------------------------------------------------------------=-$500.00 (sale)
Once you truly get his down you'll be able to calculate your weekly salary, savings for taxes and your emergency fund.  This is just one way of setting this up. Their are other ways but I find this to be the simplest in the end.
If each week your made an average of $1000.00 profit you can then calculate how this money will be alocated.
1- PROFIT=$1000.00 
3- a.salary=$750.00-20%(taxes)   ($600-pocket  $150.00-taxes)
    b.retained earnings=$250.00(75%-emergency fund,25%-retained savings) ($188.00/week emergency fund, $66.00-retained savings)
if your average monthly cost to run your studio(rent,power,misc) $800.00 total 
it would take you an average of 12-weeks to save up for the 90-day emergency fund giving you a total of around
                                                                                  $2400.00-emergency fund and $800.00 retained savings


As you can see this is only going to happen if you start now by creating good business habits and paying the business first


Boro & Soft Glass Sales

BORO SALE - Schott Rod & Tube 40% OFF
SOFT GLASS - Effetre Rod 30% OFF
May 2016
Borosilicate Sale
Schott Rod & Tube 40% Off
Coupon Code: SCHOTT
To receive the discount, enter SCHOTT in the coupon code field during online checkout, or mention it on the phone with a sales representative. Sale applies to pieces as well as cases but does not combine with volume discount.
To use multiple coupon codes online, enter the additional codes in the field marked multiple coupon codes. We will apply the discounts once we receive the order.
May 2016
Soft Glass COE 104 Sale
Effetre Rod 30% Off
Coupon Code: EFFETRE
To receive the discount, enter EFFETRE in the coupon code field during online checkout, or mention it on the phone with a sales representative. Sale does not combine with volume discount, nor does it apply to sample packs.