Starting a business is exciting. Often, it can be an opportunity to turn your passion into a career. Along with the thrill of creating a startup, there are responsibilities that may be daunting, especially those that are financial in nature. Here are some tips for fiscally wary entrepreneurs on managing these essential tasks, presented by Newburn Law.
Allocate Your Salary
Although it's essential that you cover business expenditures and compensate staff, you need to get paid. Plan on absorbing a percentage of your company's profits or determine a figure that can be comfortably withdrawn. Set a schedule for when you take money so you can plan personal finances around these dates.
Manage Your Payroll
Paying employees requires significant attention. For starters, implementing tax withholdings and recording hours worked must be conscientiously handled. Small biz tools like a dedicated payroll system can make the task much smoother and take away the headaches that come with calculating hours and checking timesheets. The ideal platform will ensure payments are timely and accurate and that you are complying with all labor laws and classifications. Be sure to research potential payroll services to find one that meets your individual needs and budget.
Handle Your Accounts Receivable
Collecting from clients is an essential corporate duty. Customers occasionally refuse to pay in a timely manner, which can have a disastrous impact on cash flow. Rather than badgering delinquent patrons with constant phone calls and texts that can be blocked, try offering a discount in exchange for paying on time.
Check Your Credit
Your ability to receive funding is directly impacted by your credit score. Neglecting your credit report could lead to a surprise rejection when seeking a loan. Periodically check for errors that may have a negative effect on your rating. A quick phone call or email has the potential to clear up a discouraging blemish.
Ease Your Taxes
With the financial demands of creating a startup, young businesses often have trouble setting aside money for taxes. Failure to pay can trigger serious penalties. Instead of paying taxes quarterly, spread them into smaller monthly amounts. Hiring an accounting service can help with budgeting this requisite expense.
Monitor Your Expenditures
Even if you are grossing large amounts, you are flirting with disaster if you spend more on inventory and operations than what you take in. Pay close attention to your expenditures. With this in mind, it is much easier to target how much to charge your customers. Shop around for less expensive inventory providers or try negotiating with current suppliers to lower your working outlay.
Create Your Routine
Maintaining good financial habits is an important part of keeping your economic health in check. Once you become accustomed to the less enjoyable parts of maintaining a business, these chores seem less daunting. If you have trouble sticking to financial duties, consider dedicating an employee to executing these tasks.
Plan Your Future
You cannot know where your venture is going without revisiting and revising your business plan. Consider where you would like your company to be in the next five to 10 years. Be as specific as possible with figures, but supplement these details with aspirational targets. Include strategies, milestone markers and marketing intentions.
Business experts point out that launching a company comes with numerous challenges, some of which are more pleasurable than others. However, many of the least enticing aspects of running a startup are critical to survival. Use these recommendations to comfortably complete these tasks and enhance your startup's odds of success.
At Newburn Law, we speak the language of business, and we can put our expertise to work for you. Contact us today.