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Essential Accounting Advice for Small Business Owners

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Essential Accounting Advice for Small Business Owners

As the leader of a small business, you likely have plenty of responsibilities. Whether you’re developing new ideas and strategies, working with clients, or simply managing everyday operations, it can be hard to find enough time to focus on your finances. However, staying compliant and being in control of your funds is critical for the success of your business in the long run. To that end, here are some of the most essential accounting tips you should keep in mind when running a small business:

Separate your finances

For most small business owners, personal finances and business-based funds have a tendency to mix. But even though that might be common, blended finances can only cause more issues, from smaller practical ones to larger legal problems. To avoid this and keep the entire process stress-free, it’s recommended to open a separate account for your business and keep it divided from your personal finances. You will be more organized and coordinated this way, and it will be easier to track both your personal and business funds in an effort to make wiser financial decisions.

Streamline your records

Work styles differ and some entrepreneurs prefer a bit of chaos to support their creative processes. But although that may work in your personal life, it should never be applied to your books and your bookkeeping habits. Instead, it’s best to keep all the necessary documents tidy, categorized, and neatly organized. Not only will this help to save some time and stress searching for important documentation, but it can also be of great help when approaching tax seasons, dealing with legal issues, or working with accounting professionals in any capacity.

Use an application

Considering the fact that we are so dependent on technology nowadays, it truly comes as no surprise that there’s an application for virtually everything, including finances. For example, you can download a budgeting app such as Mint or YNAB on your phone to streamline your personal finances and keep them separate from your business funds. Or, you could invest in specialized bookkeeping software to keep your outgoings, incomings, taxes, and other business-related financial records organized. Regardless of the solution, technology can make financial management much easier and more efficient in any case.

Know the tax rules

Taxes are a vital consideration for all businesses, one that can come with serious legal and financial consequences if not managed properly. However, this can also be a complex area to comprehend, especially when it comes to determining which regulations apply to you and your small business, and which taxes you actually have to pay. That is why working with industry professionals such as Verus accountants can prove to be quite advantageous. These experts will provide you with in-depth knowledge and great advice for creating tax-effective strategies, protecting your assets, and building your overall wealth.

Adhere to tax deadlines

In terms of taxes, remembering deadlines is another crucial aspect you should focus on. Ask your accountant to send you an email, set a reminder on your phone, mark the date in your calendar, or do anything else that will remind you that the tax deadline is approaching. This period can often be stressful, especially if you’re forced to rush due to any mistakes or a lack of organization. Setting reminders and following deadlines will be necessary, helping to ensure your records are accurate and that local authorities won’t pester you because you weren’t prepared on time.

Budget for taxes

Another tip that might help in dealing with taxes is advanced planning. No matter how large your profits may be, remember that they’re not all yours until you pay your taxes. For this reason, budgeting for this period throughout the year may be a good tactic for avoiding shock during tax season and ensuring you have enough funds to cover what you owe. You can do this by setting up a specific savings account for taxes and putting some money in it each month in an effort to pay off your taxes easily and happily enjoy the rest of your profits.

Make a P&L statement

A profit and loss statement (P&L) provides you with an overview of the financial health of your company. It aims to summarize the costs, expenses, and revenues during a specific time period, and it might even be required by your local government to satisfy their rules. A P&L statement should include data such as your operating profit, net profit, gross profit, and profit before tax. If created correctly, this statement will make it much simpler to track and analyze the expenses and profits of your business, and identify potential areas of improvement.

Whether you’re hiring a professional or handling your finances yourself, the right strategy will be critical to success. Follow the advice above to gain a better understanding of accounting and find new opportunities for your small business to grow.

Carolin Petterson is a Business Lady/Content Marketer and contributor for number of high-class business and marketing websites.

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Small Business

Preparing to Start Your Small Business

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Preparing to Start Your Small Business

There’s no doubt we’re currently living through a vibrant era for small businesses. Boutique software as a service (SaaS) companies can forge lucrative relationships with large corporations. Even mom and pop stores can build omnichannel retail spaces with access to a global marketplace. As an entrepreneur, you also have great knowledge and resources at your disposal. 

Yet, for all these benefits of our contemporary digital age, starting your enterprise isn’t necessarily easy. Without the right preparation, commitment, and tools you may still find your burgeoning company struggling to get by. Indeed, according to the U.S. Small Business Administration (SBA), only around half of all new businesses make it to the 5-year mark. As such, you must take steps to make a solid start.

We’ll run through a few of the primary areas you should be focusing on.

Start Learning

You may have expert knowledge in a specialist area. But this doesn’t always mean you know how to transform your ideas into a successful small enterprise. Even when you get started, there are aspects to understand before you’re able to achieve significant growth. Committing to some education can be an important step in preparing a positive start for your business.   

Formal education can be an option before or during your preparatory process. Taking a master of business administration (MBA) course can help you to explore corporate principles that are essential for a smooth start. You’ll have opportunities to learn about the step-by-step processes you should take in the lead-up to your opening. This includes the methods to perform market research and take care of your legal and regulatory responsibilities. Perhaps most importantly, it’s a good forum to make educational contacts. Alongside your course tutors, you’re likely to find mentors and other entrepreneurs who can give you insights into starting a business.

A master’s degree can be a lengthy undertaking — but, as valuable as it can be, it isn’t the only approach. You should commit to gaining some independent business knowledge as well. You need to understand what the risks of creating your startup might be, such as technological risks like cybersecurity or even the risks of starting a business with members of your family. Family businesses pose unique risks such as communication issues if members get into non-business arguments that spill over into work. You will have to consider if these risks will be too great to your startup to go into business with certain family members.

Keep Organized

We live at a time in which technological tools for organization are widely available for most tasks. There is a range of cloud-based project management platforms on the market. These can help you and any staff you have to keep all the planning and daily tasks of your business visible at all times. These are often compatible with communication and storage tools. It can also be wise to adopt digital documentation practices to both reduce the amount of paperwork and streamline processing. This can allow you to track and store your invoices and also make sure contracts are signed securely. Your focus here is also on clear naming and storage protocols so documents can be accessed easily when needed.  

While some organizational procedures are practical for starting a business, others are a matter of legislation. You are required by federal and state regulations to maintain certain types of documentation. This will include financial issues, like employee pension details. It could also involve supporting documentation to back up any marketing claims should the Federal Trade Commission (FTC) require it. Working with experts in this area — usually accountants and lawyers — can be a solid step to making sure you have everything organized and accessible when needed.    

Build Your Profile

Our digital landscape offers a significant amount of accessibility for new entrepreneurs. This gives you some great assets as a small business owner. However, it’s worth bearing in mind these opportunities are open to a lot of other entrepreneurs, too. It’s a vibrant global marketplace out there, but this means you have a lot of competition in whatever industry you’re joining. This means you need to start building your profile as part of your preparations.

Don’t treat marketing as something you need to handle after you’ve opened. You will usually find your approach will be far more practical if you immediately start arranging the tools you need. Spending too much too soon is one of the key mistakes new business owners make, so keep your costs low here. Build your own website, create some simple brand assets, and do some keyword research for search engine optimization (SEO). Start creating content that your audience will find both informative and entertaining.   

Once you have the tools in place, work to create some buzz. Create a countdown to get the public interested and engage with you on the day you open. Interact with consumers and followers, and focus on the quality of these relationships. This helps to make sure not only they engage with your launch but keep doing so in the years beyond. Be sure to create a forum for review sharing; customers want to know what experiences others have had with your brand and share their own. Automate this feature so you aren’t spending hours auditing and posting these reviews to your website. This is yet another means of connecting with your customers.

Conclusion

It’s an exciting time to start a new small business. To be successful, though, it is important to put investment and effort into your business education and building your skills. Implementing organizational tools and techniques can stop your operations from drifting into chaos along the way. Remember, an early approach to marketing may build momentum to help your company to thrive. These kinds of preparation can take your burgeoning small enterprise to greater heights.  

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Small Business

Starting a Small Business on a Budget

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Small Business on a Budget

Many people these days decide that they want to break away from being employed and set up their own business. This is something that can offer a host of rewards and enables you to shape your own future and boost your earnings potential over the coming years. However, one of the things that can get in the way of people starting their own venture is their financial situation. Many people believe that they need a lot of money to set up a business, but this is not always the case.

If you are looking at how to invest $100 you have spare, one of the things that you can do is to invest it in starting a business. In the high-tech world that we live in, you can get away with starting a business with just $100 or in some cases, with nothing at all if you already have the tools and equipment you need. There are many types of businesses you can start with $100 or less, and we will look at some of these within this article.

Some of the Business Options to Consider

There are various businesses that you can start with very little cash depending on your skills, interests, and what equipment you already have. Some of these are:

Become an Online Seller

One of the things that you can do is to become an online seller. You may need a small amount of cash to invest in some stock, so you can put your $100 toward that, and you can set up platforms such as an eBay store or your own website. This is a great way to start a business from the comfort of your own home, as all you need then is a computer and a space from which to work. Many people have enjoyed great success with this type of business because of the popularity of online shopping.

Work as a Freelance Writer

If you love writing and have good research skills, you can set up a business as a freelance writer, and you need very little money for this. Everything is done online, so as long as you have a computer and a space from which to work at home, you are good to go. There are some sites where you may have to pay a subscription to access projects that you can bid on, so you can use your $100 to join these sites and start looking for work.

Do Accountancy Work

One of the other options if you are good with numbers is to work as a freelance accountant, and you only need to have your computer and a space from which to work at home. One of the things you may need to invest in is specialist accountancy software so that you can provide services, and this is something that you can use your $100 for.

These are just some of the ideas you can consider if you want to start your own business on a budget.

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Marketing

5 Marketing Tips for Small Businesses

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Marketing Tips for Small Businesses

According to the Small Business Administration, Small Businesses were responsible for creating over 60% of the net new jobs since 1993 in the United States. However, with the advent of the Internet and the large scale adoption of various technologies by the masses, various aspects of running a business have changed. Be it Finance or Marketing, the way things were done ten or even five years back, are no longer applicable now. In this post ‘5 Marketing Tips for Small Businesses‘, we will understand the five most important contemporary marketing trends and how businesses can use these marketing strategies for getting better results.

5 Marketing Tips for Small Businesses

Use the power of Email Marketing

What is Email Marketing?

Email Marketing involves sending emails to a group of people, hoping that they will buy a product or service from your current offerings or they will buy products or services from you when you launch them in the future.

Email Marketing is still one of the best ways to reach out to your prospective clients. By landing in their Inbox, you have a chance to grab more attention as email ids are considered as private information and when you have access to someone’s email address you have a chance to give a more personal feel to your marketing campaign.

However, you have to be very cautious in your email marketing campaigns as you don’t want to abuse it by sending too many emails.

You should also try to add a personal touch to your emails and should not be promotional at the beginning itself. Try to add some value to your email subscribers by giving them tips that might genuinely interest them.

If you are into a product-based business, at the beginning of your email, let your readers know all about what’s happening around your product. Similarly, if you are into a service-based business, you can let your readers know about the latest problem areas in your area of business and then gently let them know how your offerings might help them solve their problems.

Email marketing is one of the oldest marketing techniques and looking at the current trends, this will remain as one of the most effective marketing technique in the foreseeable future too.

Focus on your Website’s SEO

What is SEO (Search Engine Optimization)?

Simply put, Search Engine Optimization is the act of optimizing your business’ online presence so that when someone searches for a keyword related to your business, your business name appears in the search result, preferably on the top.

SEO should be one of the most important aspects of your marketing strategy. No matter how good your product or service is, if it does not appear in search results, it is no good. You might be the best Interior Designer in Los Angeles, but if your business name does not appear in the search result for the keyword ‘Best Interior Designer in Los Angeles’ or ‘Top Interior Designer in Los Angeles’, probably you are losing out on a lot of business.

SEO involves long term dedication and constant work. You have to constantly work on the various aspects of SEO.

For example, you have to regularly look out for keywords that are performing good for your business type and then you need to produce timely content for those keywords.

You also need to update your old content from time to time. While sharing important Marketing tips for small businesses, Marketing Guru Rachel R. Noall in her article revealed some valuable SEO statistics too. For example, 75% of consumers never scroll past page 1 on Google! That should ring some alarm bells if you are not already focusing on your SEO.

Leverage the reach of Social Media Marketing

What is Social Media Marketing?

Social Media Marketing is the process of finding your targeted customers on popular social media marketing platforms including Facebook, Instagram, LinkedIn among others. Your marketing campaign on these platforms can be promotional i.e you pay to these platforms so that your post’s chances of appearing on the walls of your prospective clients increases with the assistance of algorithms of these platforms or it could be non- promotional where you expect your prospective clients see your posts. For non- promotional campaigns, there are various groups that you can join and promote your business without being too pushy.

Social Media Marketing can be a very effective weapon in your Social Media Marketing arsenal. Platforms like Facebook, Instagram, and LinkedIn provide the option of targeted promotion of your content. In traditional marketing campaigns, it is hard to achieve this level of targeting.

According to Statista,” As of January 2020, it was found that ten percent of global active Facebook users were women between the ages of 18 and 24 years, and male users between the ages of 25 and 34 years constituted the biggest demographic group of Facebook users.”

If you are a manufacturer of men’s grooming products, you would probably want your advertisement to be displayed to men of a particular age group in a particular location. Being a small business owner, you would want to spend your advertising budget wisely and social Media platforms allow you to achieve this level of targeting and that too at a nominal cost.

Become a sponsor for Local Events

By participating in local events, you increase your business contacts. That’s good but instead of just participating, try to sponsor one or two events and in return advertise your company by placing your banners at strategic locations. Small businesses thrive on local clients. Local events can be business conferences, charity events, school functions, etc. You should aim at building contacts and letting people know through your banners that you mean business.

For a majority of Small Businesses, local business means everything and local events give an excellent opportunity to promote your business.

Build an awesome Lead Magnet

What is a Lead Magnet?

A lead magnet is what marketers or businesses offer to their prospective clients for free in return for their contact information so that they can be converted in to buyers later on. You might have visited several websites where you see pop ups asking you if you are interested in downloading a Free E-Book. You just have to enter your email address and you are done. You get the free E-Book as promised in your inbox. While you definitely got your free E-Book, the marketer or the business owner just got your email address which can be later used for marketing campaigns and if you liked the free content, you are likely to pay if the same business comes with an E-Book but has a price tag on it.

Therefore, it is important that you have an awesome lead magnet. What you are offering for free should in no way be low in quality and should genuinely add value to your prospective clients. Even if the client does not buy anything from you, the experience that you provided might turn him or her into a client in distant future too.

In order to build an effective lead magnet, focus on the problems of your clients. Try to provide some free solutions to their problems through e-books or videos and focus on genuinely solving their problems. This way, you will build trust with your prospective clients.

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