If you are a small business owner, especially a new one, I’m sure that you have learned from the decisions that you made while getting started. The following is a short list of suggestions for new entrepreneurs:
- Choosing your business entity
It seems that everyone wants to be an LLC. Is this right? What about an S-Corporation? The best solution to this is to consult with an attorney and an accountant. That way you are addressing any legal issues and tax issues that could arise.
- Seeing Value
By starting a business, you saw value in the product or service that you are delivering and decided that you can make money doing it. Don’t sell yourself short. Use industry benchmarks for profit margins and do market research in your area of competitors to evaluate the pricing models that will put you in a place to be successful. Trying to “buy” business by offering lower prices rarely works.
After you researched the industry, create your budget based on expected revenue and capital contributions. Be as reasonable as possible. Be conservative so you don’t set unrealistic expectations of revenue and growth. A budget is always better when written out, so don’t be afraid to use a spreadsheet or a pencil. Budgets are meant to be changed. They are not set in stone and must be changed as circumstances dictate.
- Failure to keep records
Your new business is the product or service you are selling. It is not keeping books. If you are unaware of how to keep records in an organized manner, hire an accountant to handle that for you. It will save time so that you can work at the business and not spend your time doing “paperwork”. The shoebox method of accounting is not a method. It ends up costing you more money over time than hiring an accountant to handle the record keeping side, as well as having tax returns prepared professionally.
- Be a business owner, not self-employed
If you are having to do everything in the business, but you don’t feel like you are growing, it is most likely because you are doing all you can by yourself. It’s time to look at hiring competent individuals. Investing in employees will allow you to spend more time growing your business. Hiring the first employee is usually a hard decision and shouldn’t be taken lightly. But training of that employee should allow your company to be more successful.
If you have a business idea, do not be afraid of taking the step out of your comfort zone, even if it is on the side. The professionals at TH&W CPA’s are always here to assist new business owners. We look at every client as a partnership. We can only be successful if our clients are. Give us a call today.