5 Helpful Hints for First-Time Small Business Owners

Starting a business for the very first time can be both exciting and scary all at once. Fortunately, there are some simple steps that entrepreneurs can take to make this experience more enjoyable and less stressful. Here are some helpful hints for first-time small business owners:

1. Prepare yourself for unexpected challenges.

Many entrepreneurs assemble precise business plans they hope to stick to when starting a business in any industry. But the reality is that owning an enterprise always comes with numerous unexpected twists and turns. From the number of clients you expect to bring on in the first 6 months to the revenue you hope to generate in your first year of business, you never know what’s around the corner and how things may differ from your expectations. One decision may lead you down a different path, so be prepared for the ups and downs of business ownership.

2. Be aware of how much time is required, especially in the beginning.

Have you ever heard that starting a business and maintaining it over a long period of time is a 24-hour, 7-day-a-week commitment? In many cases, this is no joke. The startup phase of any new business requires a significant time commitment to ensure all operations are up and running smoothly. This is why you should expect some occasional late nights and work on the weekends. If you have a day job, try to strike the perfect balance between working for your employer and running your business. You certainly don’t want to lose any income you have coming in that you’re putting toward your venture.

3. Learn about the financial burden and tax-saving opportunities.

Research has shown that the main reason startups experience failure is because of a lack of funding. First-time small business owners should know this from the get-go to give themselves a leg up. Understand that a substantial amount of business capital is required to build a company that has a chance to succeed. Consider personally funding your venture out of your personal bank account. Acquiring small business loans from lenders, selling equity, gaining the support of an angel investor, and crowdfunding are just a few of the many other capital-raising strategies for first-time small business owners. In addition, maintain any income sources you have for as long as you can. On another front, be aware of the tax-saving opportunities available to entrepreneurs. These include business tax deductions, business tax credits, and other methods designed to reduce your taxable income. This will let you hold on to more of the hard-earned money you generate through your small business.

4. Patience is key.

Winning the lotto or a jackpot on a game show are some of the few ways people can become rich in an instant. However, if you think starting a business will be your golden ticket to wealth, you may want to think twice. It takes a great deal of time to set up the building blocks for your business, put marketing strategies into action, and build up a solid base of loyal customers who serve as the financial backbone of your endeavor. First-time small business owners rarely experience overnight success. So be patient, take all the proper steps, and your hard work should eventually pay off.

5. Find others who are smarter than you for support.

It’s impossible for both first-time and veteran business operators to successfully handle all aspects of running their companies. Consider outsourcing some of your tasks to others. These may include bookkeeping, payroll, business accounting and tax filings, marketing, graphic or web design, and any other tasks you think others could do better than what you can do. Time is certainly a big factor in this equation as well. By letting others who are smarter and more experienced at certain things handle those to-do-list items, you’ll have time to focus on your true goal – turning a profit.

For all of your startup and accounting needs, the experts at 1-800Accountant are here for you. Learn more by calling 1-800-222-6868 or by visiting www.1800accountant.com.

5 Tips on Buying a Small Business to Make it Your Own

Having enough funding in your bank account is just one important requirement of buying a small business to make it your own.

Having enough funding in your bank account is just one important requirement of buying a small business to make it your own. (Image credit: Flickr Creative Commons)

Many entrepreneurs are hesitant about going out and launching their own ventures, often citing risk as a big drawback. But there is certainly another path to take that can reduce some of this risk – buying a small business. Here are 5 tips to consider if you’re thinking about taking over someone else’s enterprise rather than establishing your own from the ground up:

1) Identify an appropriate small business for sale.

There are probably some “dream” businesses out there you would absolutely love to be the owner of someday. But, in the meantime, you have to be a realist about this. Look for enterprises out there that are a good fit for you – and ones that are actually for sale or are companies you could invest in financially. Such a small business would probably be located within a certain radius of your residence. It would likely be one in your particular line of work as well, in addition to a company you’d really enjoy operating. However, while you may like to shop somewhere or enjoy the services your favorite local mom-and-pop shop provides, there’s a big difference between being a happy customer and a happy business owner of such an operation.

2) Conduct in-depth research on the business you select.

Whether you intend on starting your own business or buying a small business owned by other entrepreneurs, the research process is critical. Do all the research you can on a particular business. Determine how long it has been around. Find out its owner – or if it has multiple owners or investors – and conduct in-depth research on these individuals. Make a list of the reasons you would like to purchase such an enterprise, and determine how you could improve it to take it to the next level. Researching a company your eyes are set on is very similar to researching a company you want to work for before going in for a job interview. It’s essential to know everything you possibly can about the entity at-hand and who is behind it. The last thing you want is to take the keys to a car that has problems because you failed to get it checked out.

3) Only buy a company you can afford.

If there’s a small business out there with a price tag on it already, think long and hard about whether you can reasonably afford to take it over. If you are looking to purchase a company that is not formally on the market, prepare yourself to present an extremely competitive offer, but make sure it is well within your budget. Purchasing an established business could cost you six figures or more. This depends on its size in terms of personnel, along with its total business assets. If a business owns a brick-and-mortar store, an office complex, inventory, vehicles, expensive equipment, the total value of these assets must be accounted for in the purchase price.

4) Don’t forget the tax implications at play.

Determine the entity structure of the small business you have your sights set on. Is it an S corporation? A C corp? An LLC? Or is it an informally registered sole proprietorship or partnership? Upon purchasing a company, you will inherit a certain IRS tax structure based on the type of entity. It’s important to know about the tax situation involved. If you operate a C corp, you would be taxed at the corporate level. S corps are pass-through entities similar to sole props and partnerships, while LLCs can take on a variety of IRS tax structures through the entity classification election. Of course, you could always change a company’s tax structure to enjoy more tax-saving opportunities. On another note, be aware of property taxes and sales taxes you may face by doing business in certain locations.

5) Make the transaction and the transfer of ownership.

After you have identified the ideal situation to dive into, make the purchase and transfer ownership of the enterprise so that it’s in your name. Numerous contracts, agreements, and rules are involved in this process. It’s often wise to consult with accountants and lawyers who deal with business owners to make sure you are in compliance with local, state, and federal laws.

To learn more about the tax and financial implications of buying a small business to make it your own, contact the experts at 1-800Accountant today by calling 1-800-222-6868 or by clicking over to www.1800accountant.com.

5 Ways to Increase Profit Potential in Your Small Business

There are several basic strategies to increase the profit potential in your small business.

There are several basic strategies to increase the profit potential in your small business.

Every entrepreneur wants to maximize his or her profit potential in an effort to be financially rewarded for the blood, sweat, and tears it takes to achieve startup success. The good news is that by using a few simple strategies, there are ways to increase your bottom line as a small business owner.

1. Make improvements to how you run your small business.

You might have a fantastic foundation for your business. But it might just need a little tinkering to maximize your profit potential. Perhaps one of your products is not selling well because a specific aspect of it is simply undesirable. Maybe your advertising efforts are not working because you aren’t targeting the right audience for what you sell. Or, it’s possible that one of your employees is underperforming. Whatever the case may be, evaluate your overall business practices, and determine what you can make little adjustments to in order to make the biggest difference in your enterprise in terms of profitability.

2. Improve your overall reputation and image as a small business owner.

It’s critical to have a solid reputation as a small business owner. This will lead to more customers and, in turn, more profits in your business bank account. While it’s often challenging to achieve this as a newly crowned entrepreneur, there are steps you can take to get there. Snap a professional photo of yourself for your website, social media pages, and business cards. Take additional courses, training, or certification classes to improve your skill set. When others perceive you as an authoritative figure in your line of work, your business bank account will enjoy the newfound profits flowing into it.

3. Build and grow relationships with your customers.

Customers who buy products and services once are just fine. However, it’s usually best to maximize these customers’ purchases by making them sign up for some type of long-term agreement. An example of this is a retainer in which you provide offerings to clients over the course of several months or on an annual basis. This is particularly applicable to service providers. Increasing your options can keep your customers coming back for more. In addition, you may choose to offer financing plans to anyone who is unable to pay for what you sell up front. Another good tip is to get to know your customers personally. This can give you insight into their purchasing power and buying habits, allowing you to offer the most appropriate products and services to those who support your business.

4. Work on your sales skills, and properly train all employees.

Understanding and implementing the most effective sales strategies is essential to profitability within any small business. So either maintain or beef up your sales abilities as a business owner. Consider every possible sales angle. Read books or online resources on how to sell. Then be sure to pass this information along to any employees in your business, even if they aren’t actually selling your items. A top-notch sales mindset is what it’s all about to make your company more profitable.

5. Beef up your advertising and networking initiatives.

Take a close look at your marketing plan. What strategies are you using? How much are you spending? How well are your marketing efforts actually working in terms of return on investment (ROI)? You should be keeping track of this data. Examine your findings, and determine how you can more effectively reach your core customer base via advertising. On the networking front, it’s wise to maintain relationships with those in your current and past professional circles. Someday, those around you just might become business partners if you have skills that complement each other. Adding a partner to your small business could lead to a substantial increase in your profits. At the very least, you can share ideas through networking.

For more ways to increase profit potential in your small business, turn to the accounting and business experts at 1-800Accountant. Call 1-800-222-6868 or click over to www.1800accountant.com.

Image credit: The image included in this blog post is used with permission via the Creative Commons license through Flickr.