For today’s post, I’d like to provide you with a simple tool you can use to estimate how much money you will make and how much money you will spend next year. With this tool, you can forecast your income and expenses and see how much money you will make (or not) in 2009.

Why should you do a forecast? First of all, it’s an element of a good business plan. Here are some other benefits:

1. Forecasting your income and expenses can help you determine how much you want to make, as well as help you see what you can reasonably expect to spend without going beyond your means or dipping into your line of credit or credit card.
2. Once you see your forecast, if you don’t like the bottom line you see, you can decide if it’s time to raise your rates, cut your spending, or increase your marketing and networking efforts in order to attract more clients.
3. If you are considering taking on a new area of study, planning a budget for your continuing education credits, or attending an upcoming convention, you can plug those estimates into the forecast to see how that will affect your expenses.
4. When you are able to see numbers, you know what you are working towards. You’ll be able to set specific goals, and you’ll be inspired to stay on track in order to meet them.
5. Writing out your forecast and your plan is the first step to setting a clear intention for your business and ultimately attracting what you want to come into your life.

The forecasting tool I am offering is to be used with Excel 97 or higher. There are two documents. The first is to be used by practitioners who only sell services. The second document is for those practitioners who sell services as well as products. Click here for access to these documents.

Although I am not going to discuss them here, I highly recommend that you learn about financial statements to get a clearer picture of your business finances. The three primary reports are a Profit and Loss Statement, a Statement of Cash Flow, and a Balance Sheet. Understanding these three reports will benefit you and your business immensely. Check with your local SBA office, community college or Small Business Development Office to find classes near you.

Please email me with any questions about doing a forecast for your business. Tomorrow, we’ll talk about your strengths, weaknesses, and outsourcing.

Other Savvy Posts You May Enjoy:

1. Day 17 of Reorganize Your Doula Biz – Getting Your Books Straight
2. Day 19 of Reorganize Your Doula Biz – Business Expenses and Taxable Deductions
3. Day 15 of Reorganize Your Doula Biz – Is This a Business or a Hobby?

For today’s post, I’ll be revisiting an old one I wrote a few months ago regarding business expenses. I thought I’d share a list of deductible expenses today for your business. It’s by no means comprehensive, but maybe there are some items that you haven’t thought of:

• Books – required reading for certification, your doula library, professional development
• Educational aids for use during prenatal/postpartum
• Clothing and shoes purchased for use at births
• Business cards and stationery
• Advertising and Marketing fees
• Cell phone expenses
• Business phone line expenses
• Office supplies
• Copying services
• Meals and/or Beverages at client interviews
• Meals with professional colleagues for networking purposes
• Fees to networking events
• Food and supplies that you take to a birth
• Certifying Doula organization and other professional membership dues
• Professional publication subscriptions
• Percentage of Internet and Utility fees used in the home (I highly recommend tax advice on deducting use of your home and utitlities for business)
• Website fees – hosting, domain, online subscriptions for services tied to your website
• Fees paid to professionals for outsourced services (logo and website design, accounting, legal advice, business coaching, etc)
• Business mileage
• Interest and annual fees for business credit cards
• Bank fees for business bank account
• Software for use in business
• Parking and toll fees
• Conferences and Travel Expenses – conference fees, meals, flights, car rentals, hotel accommodations, tips, taxi fare
• Professional development training workshops – for your profession as well as courses that help you build your business
• Liability insurance

For more information from the tax man himself, visit the website for the Internal Revenue Service. They also offer a variety of opportunities to learn more about small business taxes, by DVD, streaming online video, phone/webinars and in-person classes. So, there’s really no excuse to not be more in the know about taxes for your small business. To find out more about specific business expenses, do a search on the IRS site for Publication 535 – Business Expenses.

Tracking Your Expenses

On another note, how are you tracking your expenses? Here are some tips:

• Save all your receipts. Organize them in a way that makes sense to you. Some people have an envelope for each month of the year and store receipts by month. Others may have something as simple as a basket, folder or manila envelope to save all of them for the year.
• Keep up with recording your expenses. Some business owners use a program like Quickbooks, Quicken or Microsoft Money. Others track expenses by category in a spreadsheet program like Excel. Yet others manually record their expenses in a notebook.
• For expenses such as meals and coffee, write on your receipt who you went out with and the purpose of your meeting. For example, if you had a cup of coffee at Starbucks with a potential client for an interview, write "Name of Person, Doula Interview".
• There are all kinds of rules for deducting the use of your home for business. It’s a good idea to get professional advice about whether you should deduct these types of expenses, especially if you choose to do your own taxes. Sometimes these types of deductions can raise flags with the IRS. Your taxes may be affected if you have been deducting home use expenses and buy and sell your home within a certain time frame.
• If you are seriously building your business, you may want to consider hiring an accountant to do your taxes or get advice. They can often point out many deductions, business and otherwise, that lower your tax liability and be well worth the fees you pay to them. To find a good accountant, consult with other small business owners. If you have small business networking groups (doula or non-doula groups alike) in your area, seriously consider joining one or two to get business advice.

As always, I hope this information is helpful to you as you close out the year. If you have enjoyed these blog posts, please consider clicking on the "Share This" link below and share some posts on sites like Digg, Facebook and StumbleUpon. I’d appreciate your help in being able to help more birth professionals through these forms of viral marketing.

We’ve passed the halfway mark with the Reorganize Your Doula Business Series. I’m always curious to know how I can better help doulas and other birth professionals, so please email me your thoughts and send me comments, tweets and add to the Facebook group discussions.

Tomorrow we’ll touch briefly on the fascinating topic of financial reports for your business! (Okay, I’m being a little sarcastic) Have a wonderful day!

Other Savvy Posts You May Enjoy:

1. Day 17 of Reorganize Your Doula Biz – Getting Your Books Straight
2. Day 15 of Reorganize Your Doula Biz – Is This a Business or a Hobby?
3. That Time of Year is Creeping Up on Us Again. Are You Ready?

There are many ways doulas set their prices and even whether or not to charge. Different doula organizations suggest different methods of whether, when and what to charge. I will go out on a limb (and may be disagreed with vehemently, I know) and discuss some ways that others I’ve spoken to have structured their pricing. Hopefully that will help you to decide what works best for you.

Not Charging While "In-Training"

I understand that there are quite a few trainers who tell students not to charge while doing their first few births or their certification births. Understandably, you are learning a new trade, and a couple days over a weekend plus a couple of books are not sufficient to support the first few couples you work with.

Some new doulas find that a downside is the lack of commitment from couples who agree to have the doula at the birth. Other doulas have looked at free births as an opportunity to be of service to couples who may not otherwise be able to afford services, and have been lucky to connect with those who really appreciate the services provided.

My suggestion to doulas-in-training who decide to do free births is to have a solid agreement that outlines the expectations for themselves as well as the couple. I would also suggest putting a dollar value on your services, even though you’re not charging, so the couples do understand that your services are of value and as such you must be respected as a professional.

If you can locate a non-profit group or a mentor to work under, that is another way to gain experience without charging.

Doula Services as Ministry

Some doulas choose to offer free doula services as part of their ministry work, and this works well for them.

Charging a Minimal Amount to Cover Basic Expenses

Some doulas choose to charge an amount that would cover basic expenses such as gas and childcare, often under $100. This can be outlined in an agreement as well.

Charging a Lower Than Average Fee

Doula fees vary in different communities. It’s a good idea to find out what an average rate is in your area. When you decide to begin charging for your services, you may want to start at a rate that is lower than average, and slowly raise your fee as you gain experience.

Charging Based on Previous Experience

If you were previously in the health field or have other skills in holistic therapies, you may be able to create a niche for yourself for those who would like doula services as well as other services you offer. If you have previously worked with birthing women, say as an RN, for example, you may be able to begin charging a rate that’s comparable to experienced doulas in your area. If you offer complementary services, you could offer packages, and perhaps the doula package could be lower than average, but it could be made up with the price of other services you sell.

Charging on a Sliding Scale

Some doulas want to be able to offer services to a wide range of clients based on their ability to pay. Some use guidelines similar to Medicaid to determine their rates. Others may have a base rate that they get from everyone, and tell their clients to pay an additional amount equal to what they think the doula’s value was to them.

Bartering for Doula Services

An option for those who want to trade services is to set up a bartering system where clients can trade services or products in exchange for doula services.

Which Way is Best?

That really depends on your personality, what your market will bear, how popular doula services are in your area, etc. One of the best things about owning your own practice is that you can mix and match models, try one model with one client and then abandon it the next.

I Was Told I Shouldn’t Charge But Disagree With It

If you believe you are worth at least a certain fee but was told you must do free births, remember that you have your own business and you call the shots. Unless it’s a stated requirement by the overall training organization, really think hard about whether it will work for you and follow your intuition. If this requirement will cause you undue strain and stress, it will come across with couple you are interviewing with. Talk to other doulas in the area. Are there a lot of doulas doing free births? If so, understand that you may be competing with others with your same level of doula experience who are not charging.

Price Isn’t Everthing

Having a doula at a birth is a very personal choice. In most cases, couples will choose who they work with based on who they resonate with the most. After all, next to sex, birth is an extremely intimate experience. Women need to feel a great deal of trust in the doula they choose, and price may or may not be an issue. They need to feel safe when they are in their chosen birth environment.

So How Do I Differentiate Myself From Other Doulas in My Area

First of all, understand that there is a doula for every woman, and that doula may not be you every time you interview with a potential client. Really and truly, we are not here to compete with one another. We would encourage every woman who wants one to have a doula, and the more doulas there are, the more choices women have. That’s the beauty in our diversity as birth professionals. Women should have the freedom to choose the perfect birth team for themselves.

Here are ways to help you attract clients who will work best with you:

• Consider a niche for yourself. Perhaps you find you attract many teen moms or women seeking VBACs. If you have a passion for a certain type of client, concentrate on that demographic and find as many ways to connect with those people. By doing so, you will soon be considered THE doula to hire if people are having a particular kind of birth.
• If you offer other kinds of services that can help you create a niche for yourself as well. If someone wants a doula who is a massage therapist, that would likely whittle down the choices women have in your area.
• If you discover your niche, make sure you create a referral network of those who know you cater to a particular group of women. Communicate this well on your website and other marketing materials.
• Create opportunities for women to experience you and your energy by offering free talks, hosting a birth circle or a "Meet The Doula Night". Pair up with practitioners in your referral network who may already have an audience of potential clients for you.
• Explore your personal philosophy about birth and how that relates with your potential clients. For example, if, at this point in time, you feel you only want to help women who want a natural birth, seek clients who want a natural birth. Again, make this clear on your marketing materials and work with others in your referral network.
• Understand that as you grow as a doula and gain more experience, you may find your philosophy about birth changes. Do the inner work necessary to know yourself best. One sure way to burn out is to work with women whose philosophy is very different from yours. If you are unable to leave your judgments at the door of the birth room, at the very least, be mindful of who you choose to work with. The more aligned you are with your client, the easier it is to fully support them.

A Few Things To Consider

I spoke once with a woman who got a degree in social work. All throughout school and her internships, she was never paid. However, her clients did not get their services for free. They paid the school’s clinic for her services. They did not offer completely free services because they found clients did not have any incentive to see their treatments through. Her suggestion for doulas was to consider asking clients to make a monetary donation or volunteer with a cause that is important to them. This way, there is an exchange.

Another doula I once spoke to was completely content doing free births. She felt that it was a special honor that her couples were entrusting her to witness the birth of their child. The exchange in her mind was the intent of an exchange of energy. She earned experience and the couple benefited from her services.

Yet another view is that to insist that doulas do free births is to devalue this important service to women, and that it can ultimately devalue the profession as something that can be acquired free. If one can find someone for free, why pay? Think about the various services you use in your everyday life. What is your personal opinion on the value you place on free vs. paid services? Do you take one more seriously than another? Do you wonder why some services are free? What do you tend to value more or less?

And finally, examine all the factors that go into being a doula when deciding on whether, what and when to charge. How much time does it take for you to prepare for meetings? What do you need to do to ensure your family is well cared for in your absence? What do you need to pay and to whom in order to do this work? Place a dollar value on your time. What are you really worth? Do you feel worthy to ask for what you feel is fair? Is there undue pressure for you and your family financially if you DON’T charge for your services?

So Many Choices

I realize I may have just confused you more about pricing. I hope I offered several perspectives for you to consider. It’s up to you to decide what works best for you. If you’re completely confused, I would suggest talking it through with someone. Get your partner involved and gather his or her perspective. Look at your own financial situation. Consider how much time you want and need with your kids. Create your own best scenario. If that still doesn’t help, journal, or sit in a quiet place, take some deep breaths, and ask yourself what to do. You have an inner voice that will give you the answer you seek. It’s typically the quiet voice, not the one that’s listing off twenty reasons why you need to do this or that. Always remember two things: 1) You can always change your pricing structure, and 2) Always give your clients an agreement so everyone is on the same page as far as expectations go.

As always, tweet me or take the discussion to the Facebook Group, add a comment or email me. I’d love to know how your pricing structure evolved. Please remember no one way is right or wrong. Just like with birth, each doula needs to decide what is best for her situation. In other words, no flaming, please.

In my next post we’ll revisit an old Savvy Doula post and take a look at deductions you can take for your business.

Other Savvy Posts You May Enjoy:

1. Day 26 of Reorganize Your Doula Biz for ‘09 – What Do You Say After Your Elevator Speech?
2. Day 16 of Reorganize Your Doula Biz – Do I Need to Get Malpractice Insurance for My Doula Practice?
3. Day 13 of Reorganize Your Doula Biz – Backing Up Your Computer Files

When you have a business it’s important to keep accurate records. Here are some ways to help:

1. Open a business checking account. Check with some banks in your area for fee-free business checking accounts to avoid unnecessary expenses.
2. Deposit all money you earn in your business into your checking account, and pay all your bills through your checking account. If your expenses exceed your income, deposit money from your personal bank account into your business account and track it as a loan to your business.
3. Apply for a business credit card, or get a business check card through your bank’s checking account so you can make online purchases.
4. As much as possible, keep your business purchases separate from your personal purchases.
5. Maintain a file or create an envelope system for your business receipts.
6. Create an invoicing (when you create a bill to collect money) or sales receipt (when a client has already paid you) system to help track your income. Some business owners create a template in a Microsoft Word or Excel. When you create an invoice or sales receipt, print a copy to keep in with your client’s records. Depending on your income tracking system, you may want to print another copy and store all your sales for the year in a folder, binder or envelope.

How should you track your income and expenses?

I personally like Quickbooks because:

1. You can easily create invoices and sales receipts
2. You can input bills that need to be paid later, which can be handy for those who buy and sell products
3. You can easily run sales tax reports
4. Tracking expenses is a cinch, and they can be linked to your checking account, cash account and credit card very easily
5. You can run financial reports very easily
6. Reconciling accounts is an easy task, and if your bank and credit card company have online banking services, you can download transactions and reconcile your accounts quickly and efficiently.
7. If you have an accountant, you can give a copy of your file to your accountant at tax time and it will be easy for him or her to do analyze and fix your books

The downside of Quickbooks is that there is a learning curve. It’s not as simple as Quicken, because the program is based on double-entry accounting. However, there are great tutorials, books and training classes you can take to learn Quickbooks, and once you get the hang of it, it’s fairly easy. You may also need to upgrade every few years because Intuit, the company that makes Quickbooks, doesn’t support older versions. There are several editions for Quickbooks, so you should look at the different types to see which one would work best for you.

Another option is to use Quicken’s Home and Business Program. This may work well for those who use their personal accounts to pay for business expenses or if you want to be able to track both your personal and business finances in one program. I honestly don’t have much experience with the Home and Business software, though I use Quicken for my personal finances and it is different from Quickbooks.

A third option is to track your expenses using a spreadsheet program like Excel. This can be a great option for those who really don’t have many expenses and sales. I’d suggest creating one workbook with 12 worksheets for each month of the year. An additional worksheet can be created to create a profit and loss statement, where you’d use formulas to add up the totals for each month. If you’re really spreadsheet savvy, I’m sure there are ways to link an invoicing system through Excel to automatically enter your income into your tracking spreadsheet.

And of course, another option is to use good old paper and pencil and manually track your income and expenses. You could use a double entry accounting book or simply a spiral notebook.

Depending on the complexity of your practice, it’s up to you whether you hire a bookkeeper or accountant to help you with your income taxes. You may want to consider consulting one as you start your business or if you are changing your business model or adding a new service or product. If you decide to use Quickbooks, you may want to get some help from an experienced accountant or bookkeeper who can help you get your Chart of Accounts set up. Your Chart of Accounts is a listing of all your expenses, bank and credit accounts, and types of income. Someone trained in Quickbooks can help you to properly set up this list so you start off on the right foot. Otherwise, it may take some time if changes to the chart and adjustments need to be made.

As always, let me know if you have any questions about tracking your finances. Tomorrow we’ll take a look at another aspect of getting your business structure organized. Have a great afternoon.

Other Savvy Posts You May Enjoy:

1. Day 19 of Reorganize Your Doula Biz – Business Expenses and Taxable Deductions
2. Day 20 of Reorganize Your Doula Biz – How Much Money Will You Make In 2009?
3. 5 Steps For Filing Business Paperwork

Do you need to get malpractice insurance? Well, no, you really don’t. There haven’t been many cases of doulas getting sued. As long as you’re practicing in your scope, risk shouldn’t be high.

However, I have heard of a couple cases of births that went wrong, and everyone who happened to be in the room gets subpoenaed in a case, regardless of whether the couple actually wants to sue their doula. Some doulas I’ve talked to refuse to get insurance out of concern that having insurance may invite lawsuits. By not carrying insurance, they feel frivolous lawsuits will be avoided. Others feel that because they are not practicing medicine and are working within their scope, insurance is unnecessary.

The fact is, there is always a slim chance of getting sued, whether you have malpractice insurance or not. And if you are sued and don’t have insurance, you will incur the cost of legal fees and maybe more.

If you choose that insurance is right for you, you can get insurance through Cotterell, Mitchell & Fifer. You’ll want to look at their Postpartum Care Provider Policy. They have two levels, that cost $65 and $109 for one year of coverage. That is very reasonable for the peace of mind it can provide you. And isn’t that why we purchase homeowner’s, health and car insurance, to be covered in case we need it?

How can you minimize your liability?

• Be very clear with your clients about what you do and do not do. A doula agreement that outlines your scope of practice that is signed by your client sets the tone for your relationship from the very beginning. Even if you’re doing free births, having your clients sign a doula agreement is highly recommended.
• Either in your doula agreement or in a separate document, have your clients sign a waiver that says they release you from liability and that they are responsible for taking responsibility for their own health and the health and well-being of their baby.
• Have open lines of communication throughout your working relationship with your clients, before and after the birth.
• Become a certified doula. Completing your certification can prove to clients and attorneys that you are competent in your trade and that you are practicing within the standards set by your training organization.
• Avoid potentially risky situations. Examples include avoiding driving a client to the hospital during labor (what if you have a car accident on the way), or avoiding the application of heat or cold applications to a client who has an epidural. You should also refrain from giving clients any kind of holistic medicines, herbs or remedies if you are not licensed to do so, since that could be considered practicing medicine without a license.

(Source: ALACE Statement on Liability Insurance)

For more discussion directly with doulas on this topic, visit this thread on the alldoulas.com website. Choosing to purchase malpractice insurance is up to each individual. I encourage you to do your research and make an informed decision about this topic.

Feel free to comment, tweet me @savvydoulaor add a new discussion on the Savvy Doula Business Group on Facebook.

Join me tomorrow to learn more about systems for organizing your business financial records! Have a great rest of the day!

Other Savvy Posts You May Enjoy:

1. Day 11 of Reorganize Your Doula Biz – How to Organize Client Files
2. Day 19 of Reorganize Your Doula Biz – Business Expenses and Taxable Deductions
3. Day 18 of Reorganize Your Doula Biz – Pricing Strategies