How to Set Your Business Up for Financial Success
When starting a business every decision counts. You want to portray the perfect image in everything you do from how you present yourself to how you handle stressful situations. So what’s the secret to success when it comes to starting and running a business? Money. Financial success is what most business owners will probably tell you.
No one wants to be in the red and when you’re starting a business it’s important to make smart decisions because, unfortunately, new businesses don’t have the luxury of (nor can they afford) second chances. The truth is the smallest oversight can cost you big time – but only if you let it.
Every decision from how to set up your business on paper to which partners you decide to bring on board is directly related to your money and you need to nail it the first time – no pressure.
This is our easy guide to managing your business financials. When staring a business ask yourself these four questions.
When are you going to pay the tax man?
This is the first question you need to ask when starting a new business because it determines how you’ll register your business with the Internal Revenue Service. Don’t worry it’s not as scary as it sounds. According to the IRS sole proprietorships, partnerships and corporations are the most common forms of business structures in the United States.
Your business structure determines which tax forms you need to file with both federal and state governments. It also determines the frequency of your tax payments; it’s better to know when your payments are due so you can properly plan throughout the year and avoid any surprises come tax time. You can find more information on the IRS website.
What are your banking needs?
Every small business has different needs when it comes to managing business financials. The good news is there are a ton of small business banking options out there depending on your needs and the type of business you have.
Some businesses such as retail stores need to have options to get change (coins and dollar bills) and deposit cash on a daily basis. An import/export clothier business may need foreign currency options if they are dealing with designers and manufacturers overseas.
The key to finding the best business banking solution is to ask questions. Visit your local bank branch and tell them about your business, the representative will be able to recommend the best service for your needs and one that fits into your budget. Don’t be fooled into thinking you need to get the most expensive account right away. Start with a small account because you can always change it later as your needs – and income – grow.
How are you going to track your expenses?
We can’t stress this enough – starting off on the right foot is the key to financial success. Tracking all income and expenses is a big part of this success and having a good bookkeeping system is the easiest way to do it right.
The first step in finding a good booking system is to find a program that can handle all your needs, think about what types of payments you need to send and receive on a monthly basis. The second step in choosing a good bookkeeping system is to find on that fits into your budget. All in one services such as Paychex or Freshbooks are great places to start.
Who do you need to make your business a success?
Having the best team on board will make or break your growing business. You need experienced people who you can trust because let’s face it, small biz owners can’t do everything and that’s OK.
Hiring passionate people to help run your business is probably one of the best investments you’ll ever make and it gives you more time to focus on running your business – isn’t that what’s really important! If you can hire someone to handle day to day tasks that free up more of your time for the important stuff that’s money well spent.
When you’re starting out it’s a good idea to ask for referrals from family and friends. This saves time in the hiring process and also gives you a short list of qualified applicants right from the get go.
Good luck with your new business!