Paper by JLee


Entrepreneur, Guest Post, Tutorial, Etsy ShopJulie FordComment

Today we have a special guest post from my financial planner, Julie Ford, the founder of Ford Financial Solutions, LLC. Julie will take us step-by-step through some of the financial issues related to starting your own Etsy shop. Next week, I'll build on Julie's advice and walk you through exactly what it cost to start Paper by JLee

Paper by JLee: Start Your Own Etsy Shop

Your wealth, regardless of how much or how little you have, should create opportunity and help you achieve life goals. As a financial planner, I help people learn to spend, save and give with this in mind. Finding a creative outlet for her art was a goal of Jennifer’s that found its fulfillment in the launch of Paper by JLee.

As Jennifer’s financial planner, I’m going to share some of the action steps we took to help her start and grow her Etsy shop. For Jennifer, her Etsy shop is a side-hustle – a flexible and part-time source of extra income – squeezed into weekends and evenings while she maintains her day job as a junior architect. It’s absolutely possible to build something you love while continuing to work full-time. The following steps apply to any side or full-time Etsy shop of your dreams.

Get Your Personal Finances In Order

If you hope to one day start your own business, the first step to making that dream a reality is to get your personal finances in order. Financial responsibility and order allow you the freedom to take risks and spend time and money on what brings you joy. Jennifer was in the following place with her finances, which allowed her the financial and creative freedom to launch Paper by JLee.

  • Emergency Savings: Jennifer had about 3 months of living expenses set aside in an emergency savings fund. Investing in her business did not tap into these funds.
  • Student Loan Payments: She was in good standing with her student loans, meaning she never missed a payment.
  • Cash Flow Positive: This is an important point. Jennifer was living below her means. The income from her day job was enough to cover the cost of her lifestyle. She was not stretching herself thin with an apartment or lifestyle she couldn’t afford.
  • Smart With Excess: Because she was living below her means, she was able to save monthly. She made good decisions with this extra cash – some IRA savings for her future and also building up extra cash in a savings account that could be used to buy supplies for her store and the art she wanted to create.

What can you do if you want to start your own Etsy shop but don’t have the money set aside or ability to save each month?

  • Consider the Long View: What can you sacrifice today for your greater goal of starting an Etsy shop? Focus on the long view – that dream Etsy shop – and make some temporary spending cuts. Perhaps a small change of habits – brewing your own coffee or packing lunches – will be enough savings for you. However, don’t be afraid to put larger expenses on the table and compare the joy they bring you to how badly you want your Etsy shop. Can you take a shorter or cheaper vacation, drive a cheaper car, or downsize your living space?
  • Consider a Side Hustle: Consider a side-hustle make your Etsy Shop possible? What can you do to increase your income so that you can invest in your business? It’s actually quite common for small business owners to work a side job while launching or preparing to launch their own business.

Etsy Resources & Community

Etsy provides great resources for people who want to start their own shops. Jennifer really benefited from their helpful 7 Steps to a Successful Start On Etsy article and found the actual setup process with Etsy very manageable. There are great community boards where you can post questions and connect with other shop owners.

A great piece of advice from Etsy is to not wait until the perfect moment in life to launch your store. The details of your store – brand, logo, pictures, and product – don’t need to be perfect before you launch. Get started with what you have and improve from there. “Done is better than perfect” according to Etsy, and I’m inclined to agree.

Here are a few other really helpful Etsy resources:

What Are Your State Requirements?

Jennifer lives and runs her business in New York and as such she was required to get a vendor’s license. Most states will have small business resources and checklists or contacts for figuring out what is required in your state.

Here are the specific New York resources:

When you start a business you need to choose your business entity. Will you be a sole-proprietor, an LLC, an S-Corp, for example? I know this legal jargon is a drag, but it’s important to understand the differences and decide which structure is best for you. The business entity you choose impacts your liability (risk you bear if a client or customer gets upset, for example) and how your business income is taxed. Your state website might have some helpful guidance and you can also talk to an accountant or attorney.

Jennifer decided to operate as a sole-proprietor, which is common for Etsy shop owners. This means she is a one-woman shop fully responsible for the business assets and liabilities. She can always change her mind down the line as her business grows, but this works great for her now. She also chose to get an EIN number for her business, though it’s not required for sole-proprietors. This is a unique identification number that you use for the business when you file taxes. You can think of it like a Social Security number for a business.

Open Up A Business Checking Account

When you open your Etsy shop they ask for a bank account so that you can get paid. An important step you’ll take when you open your store is to open up a checking account dedicated to your business expenses and income. As a sole-proprietor, the bank account Jennifer opened for the business is in her own name, not Paper by JLee. She uses this new bank account exclusively for Paper by JLee expenses. I can’t stress this enough: keep your business and personal money separate. You can “fund” or deposit an initial sum of money into your business account and more down the line as needed, but be strict about making purchases for your business only from your business checking account.

I recommend NerdWallet and Bankrate for reviews and recommendations on checking accounts – both business and personal.


Once you’ve opened up a checking account for your business, consider how you’re going to keep track of business profits (income minus expenses). If you plan to do your own bookkeeping you might consider the following online tools – Wave, Freshbooks, Quickbooks Online, or Mint. If you currently have a tax preparer that does your personal taxes, talk to him or her about the additional cost of helping you with your business accounting and tax needs.

Jennifer currently uses a combination of Mint and a spreadsheet to keep track of her records. The checking account she uses for Paper by JLee is connected to Mint and she categorizes her expenses regularly so she knows how much she’s spending on various things like supplies, marketing, and equipment. She downloads information from Etsy on her sales and together with Mint this helps her prepare her required tax forms and understand how profitable the store is overtime.


This is another area that varies by state and also the business entity you choose. Being a sole-proprietor in New York, Jennifer files quarterly sales taxes forms and reports her business income on her personal federal and state tax returns each year. Some of you may also be required to file quarterly estimated taxes for your business. This is because the IRS likes to get paid regularly, throughout the year, rather than all at once when you file your tax, which is why employers take taxes out of your paychecks, called withholdings. At the moment, Jennifer’s withholdings from her income at her day job have been enough to cover the income tax she owes on her Paper by JLee profits.

Up next, Jennifer will share with you exactly what it cost to start her Etsy shop.

Julie is a fee-only CERTIFIED FINANCIAL PLANNER™ and a Certified Public Accountant in the State of New York. She is the founder of Ford Financial Solutions and specializes in serving urban professionals in their 20s and 30s. You can learn more about Julie at and on Twitter @julieford23.

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