3 Things I Learned As A New Business Owner in 2024

Andie and I have been business owners for a little over a year now, and we have learned a lot in that time. Here are three of the most important things we have learned.

Business Taxes Are Quarterly

This was a big surprise to us. We had always assumed that businesses paid taxes annually, like individuals do. But that's not the case. Businesses are required to pay taxes every quarter. And if you don't pay your taxes on time, you'll be penalized. What?!

We quickly felt way in over our heads, so we hired a tax professional. This is so important - as an entrepreneur you often find yourself doing everything, but if you hire only one person during your first year of business, absolutely hire a tax professional! They will make sure that you're paying your taxes on time and that you're taking advantage of all the deductions and credits that you're entitled to. We have learned so much from her that we would not have known otherwise.

The 30/30/30 Rule

When we first started the business, we weren’t sure how to pay ourselves. The thing about being a business owner is that you aren’t paid a regular salary or getting paid hourly. But how do you pay yourself? Thankfully, we have an excellent CPA who taught us the 30/30/30 rule. The 30/30/30 rule says that you should save 30% of your profits, pay yourself 30% of your profits, and reinvest 30% of your profits back into your business.

Now, if you’re a math nerd like Andie, then you probably have the same question she did. What about the remaining 10%? Do whatever works best for your business. If you want to do the actual splits something like 35/35/30 or 40/30/30, then do it! As a brand new business, we chose to invest 40% back into the business to buy supplies and equipment as needed. We aim to be able to save that 40% in our second year.

This rule has helped us stay disciplined with our business finances. If you’ve followed Mike on Twitch, then you know what we have invested in this year: lots of supplies such as sticker paper, laminate, Cricut cutting machine (which we have a love/hate relationship with), and lots of craft supplies to make various YouTube videos.

The First Year Is the Hardest

Statistically, nearly 20% of new businesses fail within the first two years. We knew this going into it, but we are absolutely determined not to fall into this statistic! The first year of business is tough. We’re still trying to figure things out, and we’re definitely not making a lot of money. Every sale is precious.

The first year has been the hardest for us because despite all our pre-planning, we still had to make a lot of adjustments. We’ve had to test out many different paper suppliers, different types of laminate, dealt with the Cricut and its inconsistencies (if you know, you know!), and the daunting task of keeping track of everything.

But we knew that if we could get through the first year, we would have a statistically higher chance of long-term success. So we refuse to give up! If you’re a new business owner, we encourage you to fight through. Keep working hard and you'll make it through.

Tips For Your First Year of Business

 Based on our experience, here are some tips to make it through that first year.

Track EVERYTHING meticulously: From expenses and income to giveaways and mileage, detailed records are crucial for filing your business taxes. Additionally tracking things such as customer interactions and marketing efforts provide valuable insights into what works and what doesn’t. Use whatever works for you: accounting software, spreadsheets, or even a good old-fashioned notebook. No matter what tools you use, the key is to be consistent and thorough. Knowing your numbers inside and out will help you to make informed decisions.

Build a strong network: Don't underestimate the power of connections. Networking isn't just about selling; it's about learning, sharing experiences, and finding support. For us, Twitch has been invaluable. We’ve been able to network with a creative community that we wouldn’t have found otherwise. We have learned so much from them! We also connected with other entrepreneurs by being vendors at a few different artisan markets during the holiday season. We hope to do more of these in 2025! Meeting other small business owners has been a great way to learn things we didn’t know we didn’t know! It’s also given us the opportunity to create partnerships, such as creating labels for Süss Candy.

Prioritize customer relationships: For a small business, every customer interaction matters. Focus on providing excellent service, being genuine, and exceeding expectations. Happy customers are more likely to become repeat customers and refer others. Actively seek feedback and use it to improve your offerings. Word-of-mouth marketing is incredibly powerful, especially for new businesses. If you’ve been a customer this year, you’ve probably noticed that we have provided discount codes with most of our purchases. Returning customers are some of our favorite people!

Cheers to a New Year; Bring On 2025!

We hope these tips are helpful for you. If you're a new business owner, we encourage you to keep learning and growing. The more you learn, the more successful you'll be.

We are excited to see what the next year brings. Thank you for supporting Canvas Monsters.