Kristin Kaplan: Pay Yo’ Self Series
Kristin Kaplan is an entrepreneur, wife, mother of two spirited little girls, and extreme list maker. A northerner by way of Los Angeles, she is now happily settled in Nashville, Tennessee and loves everything about living in Music City. She founded Stunning Events 8 years ago where she plans fresh, fun, wedding celebrations and manages all business operations. She also teaches, mentors and coaches aspiring wedding planners and wedding industry creatives to live a life of purpose by building a solid business foundation and charging what they are worth. Connect with Kristen on her Facebook page and Twitter.
What are your income streams that make up your business revenue?
I own two businesses housed under one LLC. First I own and manage Stunning Events in which we offer both an Event Management service and also Full Wedding Planning & Design. I also offer consulting and business strategy to wedding industry creatives as a part of Kristin Kaplan, LLC. At this time my primary revenue stream for the consulting business is one-on-one consulting but I have plans to expand into courses and other products this year.
Do you plan your revenue goals for the year at the beginning of the year? If so how do you come up with that number?
I am a big supporter of yearly goal setting as well as breaking down goals into 12 week segments. I go through each revenue stream and set a target number based on my capacity (how many clients I can take on and time I can invest into a particular project), my costs, and what I want to make as profit. Then I add up all the revenue goals to get my final big number for the year!
With an idea of what you will make in the next year, is your next step to budget? What does your budget usually include/look like?
Each quarter I take a look at my revenue as well as fixed costs and then also budget for the following quarter. I always look at where I might be able to cut back in spending and where I might be able to invest more (whether in education, outsourcing, coaching, better tools, etc.). My budget usually includes the following categories:
- Utilities (studio space, cell phone, etc.)
- Marketing (website hosting, marketing materials, advertising)
- Online Software (email software, accounting & payroll software, etc.)
- Education & Training (conferences, coaching, etc.)
- Office Supplies
- Meals & Networking
Costs Per Client
- Labor (on event days)
- Client gifts
How do you decide how much to pay yourself?
I always make sure to factor in what I hope to make as a salary when setting my prices. I feel this is SO often overlooked in pricing strategy. Entrepreneurs often make sure to cover all their costs but don’t take into consideration what they want and SHOULD be paid for their expertise, experience, time, creativity, knowledge, and more. Therefore as long as I’m hitting my revenue goals, I know what I can pay myself (after putting money aside for taxes, future business growth, etc.).
When did your business start paying you? How much was your personal budget getting paid?
I was officially “in the black” and paying myself a salary (albeit a small one) by my second year in business. My first year in business I was investing heavily into marketing and advertising so I didn’t expect to profit PLUS in the wedding industry you have a long lead time before you get paid. So even though I was booking a lot of weddings in that first 12 months of business, I wasn’t actually executing those events or getting paid for them until 9-12 months after that.
What portion of your business is spent on education/professional development each year?
I typically budget about $3,000 – $4,000 per year for education and professional development. I hope to invest more in this area in the future as I think it truly is what allows you to get to that “next level” in your business. I also think it’s important for every business owner to stay on top of emerging trends and information in their industry and so courses, conferences, and consulting are THE best ways to do that.
How much money do you put into savings (in your business) & how do you decide on that number?
Each quarter I set aside a percentage of all income for taxes and a small percentage for profit (which is essentially my business savings). I really like the method given by Mike Michaelowicz in his book Profit First and have tweaked that method for myself which is how I came up with the percentages. But I don’t set aside very much for business savings as I prefer to pay myself and then invest money back into my business to grow further.
Do you or have you started to work with a book keeper or an accountant? If yes, when did you take that leap?
I adore my accountant and there is NO way I could manage all of that on my own. I actually enjoy bookkeeping and number crunching so I don’t mind doing that part myself but by my second year in business I knew I needed an accountant to walk me through all the taxes and payroll. I also finally signed up for online payroll software last year to help expedite that process.
What fears did you have around making or spending money in the first few years in business?
I can’t say I have a lot of fears about making money (that I know of) as I’ve always been very practical about goal setting and setting financial projections however I know all business owners fear spending money, especially when you can’t always predict the ROI. It took about 2-3 years for me to understand that I really needed to invest in solid branding and a really good website to attract the right clients for me. Once I saw that risk pay off, I was much more open to investing further in my business. The old adage is certainly true, “you have to spend money to make money”. But of course, do it wisely.
How do you and your business account for the variable income nature that entrepreneur business revenue can be?
My best advice for this to all entrepreneurs is to know your numbers and put money aside! It can be so tempting when you have a huge revenue month to start blowing cash on anything you can think of or give yourself a raise but you must resist. I am always aware of my monthly costs so that when I have those big months, I set aside enough funds to cover the next few months in case I have a lean season (which happens to everyone!).
Thank you so much to Kristin for sharing with us!! If you enjoyed this installment, make sure to use #payyoselfseries to spread the word and follow along every Tuesday (here on Reina + Co’s blog) and on Thursday (on Nevica Vazquez’s blog!).