For small business owners, setting out on a new venture is exciting, frustrating, stressful, and potentially successful. No matter the business, no matter the brand, no matter the business plan, pulling from other people’s experiences to help make the best decisions moving forward will always help. Entrepreneur points out that a in study of 1,700 small business owners, fewer than 25% of small business owners adopt good financial habits.
Those who follow the best practices can consistently perform better than other small businesses. From annual revenue to higher levels of customer satisfaction, better habits will help guide a company’s future plans. These financial habits will equip small business owners with a new outlook to better help them prep for a future.
Establish A Business Structure
While this may seem like a given, there are small businesses who don’t adequately outline an overall goal. If a small business plans to expand their business from the start, it’s usually a good idea to incorporating a solid legal structure.
There are a number of different business structures that small businesses can pull from in order to adhere to certain legal and tax requirements. Doing this will help to set a foundation for a company’s finances and also help to pull in the best tax benefits and deductions.
Invest in Business Insurance
With a small business just starting out it’s understandable that money can be tight and financial choices have to be well planned out. However, leaving enough room in your budget to afford business insurance coverage will help in the long run. Many successful small businesses are like big businesses in that they are not immune to possible legal issues that may arise. Given your business’s industry, there can be a number of liabilities that make it risky to operate without insurance, which provides peace of mind.
Every business will look into different ways to reduce the amount they pay in annual taxes. Tax deductions and write-offs are basically there to reduce your taxable income. Small businesses should make sure their accountant(s) knows what expenses qualify for certain deductions and be very diligent about classifying what should be written off.
Keeping everything organized is key. Having structured and well-looked after accounts is a great financial habit to take on from the beginning. Create a standardized process that can be scaled and deposited into different areas of your business. Cloud accounting solutions can help keep everything in order and easily accessible to the right people. Online invoicing will be easier as well as expense management.
Keep Debt Down
Angel funding and venture investing are traditional ways to find the right financial help when starting out, but can take a long time to acquire. While they’re nice to hope for, it’s important to have funding of some kind from the start. This is where small business loans come into play. While they are helpful, they can also drive a small business just starting out into a debt hole that they may never climb out of.
Once a small business takes on enough debt they have to start paying things back with interest. Develop a plan for paying off debt before you take it on by looking at financial forecasts. Being diligent about this important step will pay off in the long run.
About Walker & Associates
If you’re in the market for a new insurance partner, do your homework to ensure a lucrative venture and positive relationship. Contact us online at Walker & Associates Insurance or by phone at (800) 213-7126 for your insurance needs. We can explain your coverage options and how much coverage will cost.