By Sean Wood
Small business owners have the benefit of making their own schedule, but they also shoulder all the burden. Success comes only after hard work.
“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.”
Colin Powell, Former U.S. Secretary of State and Retired Four-Star General in the U.S. Army
Running your own business can be the most satisfying endeavor – but it can also be quite frustrating. Sure you’re your own boss, but that means you’re responsible for everything. It’s not enough to have a cool product or service. You have to know a little bit about every aspect of running a business: HR, payroll, receivables, billing, customer service, marketing.
A lot goes into starting and running a business. There are a countless number of classes, books, articles, blog posts, videos, workshops and other resources to help you find your way to entrepreneurial success. Because at the end of the day, quarter or fiscal year, it all comes down to a healthy bottom line, we’ve put together this brief list of financial considerations every business owner must be prepared to face: start-up costs, money management and taxes.
START-UP COSTS
Investors — Everyone needs capital at some point. Maybe it’s to get started, launch a new line or expand operations. It is important to know how much capital you need and how to find reliable sources that won’t result in you giving away your business.
Planning — To get any kind of financing you need to clearly and completely describe your business in the form of a business plan. It will also serve as a roadmap for your organization’s success.
MANAGING MONEY
Cash flow — One of the allures of entrepreneurship is the unlimited earnings potential. But there are also expenses. And if your business involves the creation or sale of a product, that adds a whole new reason to have a clear grasp of your cash flow demands.
Accounting software — It’s important to use some type of accounting software to know where you stand. Intuit QuickBooks may be the best known. There is also FreshBooks, Wave, Xero and Sage 50 Cloud to name a few. Shop wisely and learn how to use whatever you choose.
Strategic pricing — Do you know what you plan to charge for your good or service? This may be the trickiest part of the cash flow equation. Charge too much and you don’t make sales. Charge too little and you never make any money. Think about this carefully.
TAXES
Recordkeeping — Keeping proper records is vital to keeping your business afloat. It’s also important for keeping you out of trouble with the IRS. The threat of an audit always looms so you have to know what documents you need. There are also records you have to keep for whatever state where you do business. There may also be local business license required. Get informed.
Business taxes — Tax laws are always changing so stay abreast of the latest with a class or the help of a trusted CPA. Learn due dates, related forms and the information you need to accurately complete your business tax returns. Knowledge will help reduce your stress.
All that is just a start, regarding the basics of money and your small business. What about marketing and human resources? Read on, for more considerations.
Sean Wood is the owner of Three 8 Communications and previously worked for Sensis TX. He has over 30 years of writing experience and conducts media training sessions with numerous corporate executives.
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