Crunch the Numbers Before They Crunch You
We get it, nobody really likes to handle the less-than-fun financial aspects of owning your own business. But it’s necessary to at least be familiar with your financial situation in order to operate a successful entrepreneurial endeavor. These tips from WONGCW will help you get organized.
Perfect your planning. Your business can’t run without money, and you can’t keep money without planning for the future. Keep tabs on current market trends in your industry so that you will know which months will be fruitful and which will be lean. Don’t plan any major purchases when you expect to be slow. For instance, if you sell swimsuits, try to avoid investing in a year’s worth of materials in September.
Legally establish your business. Entrepreneurs who dread crunching numbers often get anxious as the calendar gets closer to tax season. Thankfully, structuring your business as an LLC can make this time of year much less stressful. What is a LLC business? It’s a limited liability company structure that will not only give you specific tax breaks, it will also establish limited liability and ensure that you’re not subjected to “double taxation.”
In every state, the process for setting up an LLC is a little bit different, but in most areas, you’ll only need to complete a few steps before your business earns this designation. Hiring a lawyer to help you take care of it can be pricey, but if doing it on your own seems too complicated, you can find a happy medium by using an online formation service.
Simplify your site. If you’re like most people, you don’t want to deal with calculating tax, shipping costs, or discounts. Make sure your business website is set up to take payments and make the purchasing process as seamless as possible for both yourself and your customers. Most business websites integrate with accounting software, such as QuickBooks, so all you have to do is click on a few reports to get a clear picture of your financial situation.
Outsource the undesirable. By undesirable, we mean taxes. Improperly prepared taxes may leave you owing Uncle Sam more than your fair share. Late fees and penalties can add up quickly. Consider hiring a qualified bookkeeper to keep your paperwork organized during the year and seek the services of a certified tax professional when it’s time to crunch the numbers. If you can’t afford a bookkeeper, take the time to educate yourself on financial matters. Check out this website for information and online courses to help you run your business.
Beat your branding budget. Chances are you don’t have an unlimited budget to get your business up and going. Learn to utilize inexpensive marketing tactics to get your name into public view. Host a grand opening celebration; you can most likely advertise free of charge in local magazines and through business networking contacts. Don’t underestimate the power of social media, which can put your products in front of thousands of people in minutes. Schedule a Facebook giveaway that requires entrants to share your post and tag their friends. You will only be out the cost of your merchandise and will attract scores of attention. Be active in your community and volunteer your products or services to local schools. You never know when you’ll have an opportunity to make new customers, so keep business cards handy at all times. American Express further recommends lending your office space to nonprofit organizations for their events, which will put bodies in your building and eyes on you.
Consider cutting costs. While this may seem like an obvious first course for keeping money in your wallet, cutting costs isn’t as simple as it seems. Be cautious when determining where to inject money and when to hold off. If the economy is down, ask your landlord for lowered rent; they may be happy to cut you a break in lieu of losing a lease. Evaluate your equipment. It may not be necessary to own certain pieces that you can rent for pennies on the dollar when you need them.
Expect the unexpected. Business, like life, is unpredictable even under the best circumstances. Try to keep money aside to pay for unexpected expenses or have an alternate plan in place for how to handle worst-case scenarios. Discuss potential problems with your financial advisor, who can help you figure out how to save for the future even when times are tight.