Becoming a small business owner is an impressive feat, and you should be proud of your hard work. We know you are business savvy, but we also know that everyone can benefit from a few tips and tricks when it comes to handling finances.
Whether you’re totally new to the world of small business finance or just need a refresher, we’re here to help you make sense of your company’s money.
#1 Save for a Rainy Day
We’re going to start with the bad news. When you’re in business, anything can happen—including an emergency.
Having funds tucked away will safeguard your business (and livelihood) against everything from large, unexpected expenses to a national economic downturn (sounds familiar, huh?). We hope you never need to rely on your emergency fund, but you’ll be glad it’s there if you ever find yourself in a financial crisis.
#2 Don’t Neglect Your Personal Finances
You put your heart and soul (and possibly your life’s savings) into opening your small business, so it’s understandable that your business finances can start to take precedence over your personal ones. However, we highly recommend you stay on top of your personal finances, no matter what else is going on with your business.
Take a look at how to make sure you don’t put yourself (and, subsequently, your business) at risk:
- Pay yourself a livable salary
- Set up a personal retirement fund
- Incorporate your business to reduce personal liability risks
- Maintain a good credit score, both for personal and business loans
#3 Every Season is Tax Season
In this world, nothing can be said to be certain, except death and taxes. Well, it’s been a good long while since the days of our Founding Fathers, but Benjamin Franklin’s words still (unfortunately) ring true.
Taxes are an inevitable part of life, just like they are of business. It’s a lot easier to avoid tax issues than to fix them retroactively, so we recommend confronting your tax obligations head-on. This means closely monitoring all of your taxable income and duties, which may include:
- Sales tax
- Federal and state taxes
- Income tax
- Self-employment tax
- Excise tax
- Environmental tax
If seeing this list makes your head spin, don’t panic. There are plenty of options for managing all your IRS-related needs. Using sales tax consulting services is a sure-fire way to stay in the black without spending more than a few passing moments thinking about your taxes.
#4 Get Help When You Need It
Sometimes, your entrepreneurial spirit can get in the way of asking for assistance. But no matter how self-sufficient you are, you’re bound to run into financial issues that are outside your area of expertise—and, quite frankly, outside of your job description.
Let someone else take care of the things you don’t want to deal with!
Whether you need a tax lawyer, financial advisor, or professional accountant, there’s no shame in getting help when you need it. In fact, it’s one of the smartest things you can do.
#5 Keep an Eye on Even the Smallest Expenses
As you know, the list of expenses that accompany running a small business is a long one. This means it’s incredibly easy for things to slip through the cracks. Even if it’s just ten dollars here or a hundred dollars there, small expenses can make a huge difference for your bottom line.
The best advice we can give here is to be diligent—and to insist your employees do the same.
Implementing a structured system for reimbursements, invoices, and credit card purchases will help ensure no one is unnecessarily bleeding money (and where to put the bandages, if they are).
We’re Proud of Your Proactive Approach
Saying you have a lot on your plate is an understatement. Running a small business is more than your full-time job; it’s your life.
That being said, taking the time to educate yourself about financial best practices is especially impressive. Trust us; you’re going to be glad you made your finances a priority when business is booming—it’s only a matter of time.