The One Financial System That Changes Everything in Your Business

The Thing Most Makers Skip (But Actually Need)

I want you to imagine your business as a house.

Your marketing and messaging? Those are the walls. Maybe even the concrete in the foundation. They’re visible, they’re exciting, and they’re the parts most people focus on first.

But your small business financial system is the metal rebar inside that foundation. It’s the structural support that holds everything together.

And here’s the honest truth I’ve learned from both my own business and working with other makers: if that structure isn’t there, the rest of your business eventually starts to crack.

Most handmade business owners focus on sales first. And listen—I get it. You started your business because you love your craft. You wanted to share what you make with the world and make some money doing it.

You didn’t start your business because you were excited to open spreadsheets and track numbers.

But if you want to build a profitable, sustainable business, your handmade business finances have to become part of the foundation—not an afterthought you deal with at tax time.

Why Your Financial System Matters More Than You Think

One of the biggest misconceptions I see with makers is this idea that if sales increase, everything else will magically work itself out.

But that’s not usually how it works.

You can have great marketing, strong demand, and consistent sales—and still feel like your business isn’t actually paying you.

I know this because I lived it.

I started my business in 2019, and I didn’t take a consistent paycheck until 2023. And even then, it was about a hundred dollars a month. Four years of running myself ragged and barely paying myself.

That’s not something I’m proud of, but it’s something I talk about openly because I know so many handmade business owners are in the same position.

The problem usually isn’t effort. It’s not creativity. It’s not even sales.

It’s the lack of a small business financial system that tells you what’s actually happening with your money.

Without that structure, you’re basically guessing. And guessing doesn’t lead to a profitable handmade business.

The First System: Pricing That Actually Supports Your Business

Let’s start with the system that impacts everything else: pricing.

Most makers know they need to price their products correctly, but very few actually break down their costs fully.

If you want to know how to manage finances in a handmade business, pricing is the first place to start.

At a minimum, your pricing should account for three things:

Materials

The raw supplies that go into your products.

Your time

Your time matters. Your labor is valuable. If you’re not charging for it, your business will eventually hit a ceiling.

Overhead

This is the category people forget.

Overhead includes the tools and business expenses that support your work but don’t go directly into a single product.

Think about the shears you use to cut fabric, your jewelry tools, your packaging supplies, or even software you use to run your shop.

You might not buy these for every product, but they’re still part of the cost of running your business.

If your pricing doesn’t account for all of these pieces, your margins shrink—and suddenly your business is working harder without actually making more profit.

The Financial Systems Every Maker Needs

Beyond pricing, there are a few core systems that make your handmade business finances dramatically easier to manage.

These systems aren’t complicated, but they make a huge difference.

Inventory Tracking

You need to know how much money is tied up in inventory at any given time. Whether that’s a spreadsheet or a tool like Inventora, the important thing is visibility.

Cash Tracking Beyond Your Bank Account

Your bank balance is not a financial system.This is something I say all the time because it’s such a common mistake. If all your money sits in one big pile in your bank account, two things usually happen: 

You overspend because it looks like you have more money than you actually do. 

Or you hoard money because you’re afraid to spend anything. BOTH come from not knowing what that money is actually for. 

That’s why I personally use YNAB to give every dollar a job.

Expense Tracking

You should know what you’re spending long before tax season. Tracking expenses regularly allows you to ask a simple question: is this expense necessary for my business right now?

Sometimes the answer is yes. Raw materials? Usually necessary. Show fees for markets? Probably necessary. Software that makes your life easier? Also sometimes necessary.

But if revenue dips, those expenses become the first places you can adjust.

Knowing Your Survival Number

This is the number that tells you the minimum revenue your business needs to generate to stay afloat.

Your survival number includes:

Your business expenses
Contractor payments you need in order to run the business
And most importantly, your owner’s pay

Because your business should eventually pay you.

Not someday. Not “when things get bigger.”

Now.

Building a Financial Foundation That Actually Supports You

If there’s one thing I want you to take away from this, it’s this:

You do not have to be a numbers person to build a financially healthy business.

Anyone can learn the basics of managing their small business financial system.

The goal isn’t to become an accountant.

The goal is to create enough structure that your business stops feeling like a guessing game.

When your pricing is solid, your inventory is tracked, your expenses are visible, and you know your survival number, something really important happens.

Your business becomes clearer.

Decisions get easier.

And the path toward a profitable handmade business starts to feel a lot more possible.

If you want help building these systems step by step, you can check out the Profitable Maker’s Method, where I walk through the exact framework I use to help makers build sustainable, profitable businesses.

And if this post made you realize your financial systems might need a little attention, that’s okay.

You’re not behind.

You’re just starting to build the foundation your business deserves.