Starting your own business gives you a lot to be excited about, but you need to set yourself up for success. Crossing your fingers and hoping for the best just isn’t enough when in a hyper-competitive business world. These are five things all new business owners have to be aware of.
Budgeting
Your business’ budget needs to be kept realistic but flexible when you’re starting off. You likely won’t be able to shoot for the moon, but you need to make room for unexpected expenses that might occur. There are costs that are come not only with running a business but also with starting one.
Break down your budget based on getting all the necessary permits and licenses, paying employee wages, supplies, and location costs. You may go into some debt when starting your business. Make sure you’re not borrowing more than you’d be able to pay back.
You can also save money to help you survive as a fledgling business. For instance, you can purchase used but still operational equipment and share building space with another company. Your first few years might involve a lot of penny-pinching and self-control, but that’s all standard when you’re getting started. Once you’ve been established and have seen growth, you can start being more liberal with your spending. However, you should stick to the tenets of shrewd budgeting as best you can.
Multiple Payment Options
Giving customers as many options as possible for payment will help business. From a business owner perspective, cash-only is optimal, since there are no processing fees required. However, not letting people paying with cards means you’re losing money by virtue of not getting their sale.
Seek out a quality credit card processing service. You may elect to use a tablet-based card processor. These look a lot more aesthetically pleasing than many of the older devices and also offer advantages like allowing tipping. If you’re also operating as an online retailer, make sure you have a secure digital payment system in place.
Hiring Financial Experts
You don’t need to be a total financial wizard to be a business owner. For things that aren’t common sense, you should defer to the wisdom of advisors. Depending on the size of your operation, you might have a team of financial advisors and accountants. You might also just have someone on retainer who you consult with on a case-to-case basis.
Keep tabs on financial records and speak up if you need clarification on anything or believe something isn’t right in terms of how money is being handled. Remember to be ahead of things like taxes and to properly guide your team. They all need to know exactly what your expectations for them are.
Business Bank Account
When we say to not mix your business life with your personal one, we’re serious. One of the first things you should establish is a separate bank account for your company. This helps avoid confusion and complications that would be inevitable when you’re not what funds are coming from where.
Should you face an IRS audit, it would be a major headache to go through the expenses of an account that is full of personal matters. Having a second bank account exclusively for business matters doesn’t require any big effort. It can really make things run smoother for you, especially with how it can help you keep better track of your business’ finances.
Be an LLC
Setting your small business upon as a limited liability corporation is one of the best things you can do. Under this arrangement, you would not have the same liability for your business that you would if you were operating a sole proprietorship.
For instance, a legal injunction filed against a sole proprietor means they will be personally liable for any damages. However, having an LLC helps create a buffer between you and your business. It doesn’t absolve you of responsibility completely, but it makes things a lot easier to handle. Be sure to carefully review everything that’s involved with filing as an LLC before deciding whether to take the plunge.
Knowing these things and using them will help you do well as a new business owner. There are no guarantees, but you can do better than testing fate. When you have these five things in your business strategy, you’ll be able to operate with much greater confidence.
Amy Sloane is an alum from Oregon State University and spends her free time as a freelance writer and knitting enthusiast. Amy loves reading, cooking, and spending time with her dog, Molly.
Starting a business stock photo by Chinnapong/Shutterstock
