It’s no secret that it’s tough to make it in small business. While 80 percent of new businesses make it to the one-year mark, a mere third make it to ten years. This shouldn’t discourage you from launching the business of your dreams, but it’s important to proceed with financial caution. Follow these tips to keep your small business financially solven
1. Budget
If you’re not already budgeting, it’s time to start. Experts refer to your failure to budget as “driving with blindfolds.”
As soon as you develop your business plan, draft a budget. From there, track all revenues and expenditures. Don’t be afraid to adjust your budget as necessary to reflect new circumstances.
2. Resist the Urge to Mix Personal and Business Expenses
As a small business owner, you’re almost guaranteed to suffer a tight budget at some point. When this happens, resist the urge to mix your business and personal accounts for a little cushion.
From jumbled accounting records to personal liability, you’ll run into a variety of issues if you intermingle assets. Additionally, by keeping assets separate, you’ll have a better idea of where your business actually stands. Keep personal credit cards strictly reserved for personal matters, and limit business loan spending to business affairs.
3. Adopt Frugal Habits
Frugality shouldn’t merely be a personal habit; it should be an integral element of business operations. This could mean different things for different businesses. Some small business owners purchase pre-owned furniture for their office space, while others seek high-efficiency appliances in hopes of saving on utilities. Find small ways to save money without compromising customer experience; these tactics will make a difference over time.
4. Work With an Accountant or CPA
It’s tempting to save a few bucks by downloading accounting software and going it alone, but this approach could lead to far greater losses in the long-term — especially if you lack accounting expertise. A skilled accountant can assist with every phase of your company’s lifespan. For example, as you set up your business, your accountant can help you determine which structure will prove most profitable. Later, your accountant can help you find creative solutions for saving money and increasing cash flow. You’ll work together to create accurate forecasts as you seek expansion and strive to avoid IRS audits.
There’s no need to go it alone; work with Larry Turner, CPA to keep your small business finances in stellar shape. He boasts four decades of success in financial planning. Reach out today for more information.