Starting a small business enterprise can seem daunting when you take on all of the financial liability. You’ll need to pay bills, file your taxes, pay invoices and budget effectively. Sound stressful? The following are some tips that you can take advantage of to limit your financial worries.
Rule number one is you have to pay yourself – no excuses. Most people think there is no point as all the money needs to be put into the business to ensure it’s running well but the old saying of “ninety percent of all businesses fail in their first year” should give you a heads up that it may not be financially viable for yourself. You are an asset of the business and, like all employees, you deserve to be paid too.
Invest in Growth
You need to make sure you set some finances aside to make sure you can invest in growth because all businesses will need to look at growth opportunities sooner or later, even if it’s buying an extra storage unit for products awaiting sale. Starting a pot like that can be tricky in the beginning so make sure you investigate all the finances you have available. For example, do you have life insurance that you can sell as the beneficiaries no longer need your death benefit? If so, invest in your future by reviewing a guide on how to cash out your life insurance policy.
Keep Your Credit Score Up
You can ensure you invest in your business credit as much as your personal credit by taking steps to promote yourself. Of course, ensuring that your personal credit is constantly improving is the best step forward you could make but other things that could be affecting you in the eyes of credit risk agencies are the credit scores of partners and how regularly you update your financials with your reporting body. You are never going to get the actual algorithm for how your ventures credit score is created but you can make sure your details are up-to-date with the relevant agency performing the credit score analysis.
Pay Your Taxes in Installments
Ending the financial year with a huge tax bill is a nightmare for any business owner, regardless of size, because it is sincerely the most stressful time of the year. You can mitigate against some of this by spacing out payments towards your tax bill throughout the year, either by working with the tax collection agency directly, or by using a savings account to hold the money that needs to be saved for when that tax is due. The timeframe differs between localities and governmental bodies but it is worthwhile to be thinking of ahead of time so you don’t wake up to a red letter and screw up all the good work you did to keep your credit score positive.
Keep an Eye on Your Accounts
This one is simple: if you don’t know how to do accounting, either hire a person to work your books or learn how to do it yourself. Business owners may be able to wrap their head around a marketing plan but go cross-eyed at a set of figures, so if you have hired someone, get them to give you regular reports on what is going on with the accounts.