You started a business that has been a dream of yours for years. You did your homework and what you sell is in demand. Fast forward fifteen months, things aren’t good. You haven’t turned a profit yet since opening the business. You can’t afford to pay taxes due. The phone never stops ringing from creditors who want payment. Your stress and anxiety are at an all-time high. How did this happen? First-time business owners can make devastating financial mistakes. Here are a few things you can do to help your business.
- Be Realistic About Profits
Steady money doesn’t happen within a short amount of time when you open a business. It takes time to build a stable income much, less a profit. Be aware of this as you plan to pay your bills. Conduct a break-even analysis so you will have a good idea when you will start making a profit.
- Keep Your Personal and Business Funds Separate
Don’t mix your personal and business funds. The best practice is to keep these two funds separate for tax purposes. Mixing the two won’t give you a real idea of how your business is doing financially. If you seek out a business loan, it will be nearly impossible to show what your business is doing.
- Not Keeping Up With Bookkeeping
Bookkeeping isn’t fun but, you have to do it. Make sure you carve out time each week to update your bookkeeping. Use tools like QuickBooks to set yourself up for success. Don’t know how to use QuickBooks? Don’t worry SWVA Tax & Accounting can help you.
- Plan Your Taxes
You have to pay taxes as a business owner there, is no escaping it. Put funds aside to pay taxes to local, state, and federal governments. SWVA Tax & Accounting can help you develop a plan for tax payments.
- Get An Accountant
A good accountant will save you time and money. Working with one can help with payroll, preparing financial statements, and understanding the latest tax laws. Look no further than SWVA Tax & Accounting for all your business tax needs!
- Hire A Lawyer
A lawyer can help you get your business registered and structured that benefits you. They can review any contracts and other business documents you have.
- Have A Business Emergency Fund
Having a liquid source of cash can help cover business expenses for three to six months. This emergency fund can help keep your business stay afloat during difficult times.
- Business Insurance Is A Must
Business insurance helps fill the gap of things you didn’t see as accidents or theft. This is especially important if you are a sole prop since you will be 100% responsible for what happened. Get it and have peace of mind.
- Handling Business Debt
Business owners often go into debt operating a business, such as credit cards or business loans. Have a financial plan to pay debts off so you don’t drown in debt.
Mistakes cost business owners time and money, two things there is never enough of. Working with an accountant can make your business stronger. SWVA Tax & Accounting is a full-serve accounting firm specializing in the needs of small businesses. Call us today at 540-250-3198 or book an appointment today. We’ll run the numbers, while you run the business.