Small business owners carry a lot of responsibilities on their shoulders.
With their overwhelming workload, entrepreneurs sometimes make financial mistakes that result in wasting resources, hindering a startup’s success and hurting their finances as well. The key to smart financial management is to become knowledgeable about specific finance and accounting principles.
Here are ten practical tips for small business owners to improve the company’s finances:
3 Ways To Boost Your Business Next Year
If you are a business owner, you are probably already making some rather significant plans for your business in the new year. Making plans is understandable for any business; after all, the ultimate goal is to make as much money as possible.
lIn this post we are going to be looking at a few things you should consider next year to increase your chances of growth
1. Change Up Your Marketing
If there is one thing that can boost business, it’s giving some real thought to your marketing campaign. More often than you may like to think, companies still have a hit and hope strategy when it comes to their marketing.
The first thing any business should have a good hold of is Google Analytics. Google Analytics is a free tool provided by Google that allows you to monitor the performance of everything from the behavior of visitors to your website to the success of your PPC marketing. Being able to track things like this helps you along the way with your marketing campaigns and opens up so many doors when it comes to boosting your business.
2. Perfect You Buyer’s Journey
Whether you sell to businesses or the general public, there is one thing that you need to get right, and that’s the buyer’s journey.
While most people presume this falls under marketing, it requires attention all of its own. If you hope to see growth and boosts with your business, you should be monitoring every step of your customer’s journey and ensuring the entire process is as smooth as possible.
You should be taking extra care to monitor all three stages of the buyer’s journey but making the most effort to tackle as much as possible as the awareness stage. By showing that you can offer a potential customer, everything they need straight away reduces the entire journey exponentially.
3. Pay Attention to Your Strengths
If you are a business that conducts 90% of its business online, you already have one massive advantage over a lot of companies, and that is, you can give your customers a personalized experience.
If a customer walks into a retail store, they will receive the same treatment as every other customer and just like them; they will have to search for everything they want. It matters not if they are a regular customer.
If you are a business that conducts online business, you should play to this strength. By using automation to gather data about your customer’s preferences, you can build each customer their shopping environment that makes suggestions based on their preferences.
7 Tips for Every Small Business Owner
1. Don’t Mix Business and Personal Expenses
As a small business owner, you tend to be super connected with your business and sometimes both feel like the same entity. However, as you mix up your personal and business accounting records, it’ll create a mess when it comes to filing taxes and calculating your company’s valuation. It will also create a burden for your personal accounts when your business is losing money.
First, start with opening up a separate business checking account and credit card for your business expenses. Make sure you consistently categorize your personal and business expenses correctly. Such a practice will not only remove personal liability when something happens to your business but also help build your business credit score.
Don’t forget to pay yourself, however. While you can be frugal and set your salary as low as possible at first, when the startup needs capital to grow, paying yourself is an excellent way to set aside money consistently and test your business’ profitability.
2. Save for Retirement
Many entrepreneurs plan to rely on their businesses to grow well into their retirement. However, things change and what works well now may underperform in the future. Therefore, have a safety net by contributing early into a SEP (Simplified Employee Pension) IRA or a Solo 401k account, which provides tax benefits and is designed specifically for the self-employed.
You are usually allowed to contribute up to 25% or $55,000 (whichever comes first) to a SEP IRA or a Solo 401k account. In case the business fails, you won’t have to worry too much. The little money you put aside now will grow tremendously by the time you retire.
3. Hire a Good Team of Experts
You can’t and shouldn’t handle every aspect of the business yourself. It could be very overwhelming and ineffective. You need to find several competent experts to assist your company, especially for the critical roles like an accountant, tax advisor, and lawyer.
Tax law for small businesses is very complicated. A knowledgeable tax advisor will help you understand applied obligations to avoid all the headaches. They can also save you money by staying on top of the latest regulation changes and ways to leverage tax advantages.
Employ somebody with experiences handling businesses like yours. Avoid giant firms that will not prioritize you over their larger clients. Choose a firm that fits your business and is readily accessible when needed!
4. Purchase Adequate Insurance
It’s sad but true – a majority of startups fail. Therefore, it’s good to safeguard your personal and business assets from disasters by getting insured. Depending on your assets, you’ll need a variety of insurance types.
For example, additional personal life and disability insurance will ensure adequate coverage in case you are disabled or lose your income. Or you can contribute your pretax income to a health saving account (HSA). This reduces your taxable income and lowers taxes while guaranteeing enough cash to cover your medical expenses once incurred. Overall, consult with an insurance expert to get advice on your options and the policies you may need.
5. Diversify Your Investments
You’ve probably heard…