You’ve taken a leap of faith and started your own business. In all honesty, that is one of the hardest steps in forming your own business––actually turning your idea into action. It’s not uncommon for new business owners to ride the high of finally getting out there, only to be discouraged when overlooked obstacles stand in the way.
Don’t let business expenses be one of those unexpected hiccups that can slow your momentum. While it may not always be the most exciting or exhilarating aspect of beginning your own company, financial matters are extremely important. Whether you are thinking of starting a business or you’ve already taken the plunge, here are a few business expenses you can prepare for now so that financial woes don’t drag you down.
Understanding Taxes, Licenses & Permits
Did you know that more than 99 percent of all US businesses are small businesses, according to the Small Business Administration? Your new business venture is one of more than 28 million small businesses out there. That means that when it comes to getting your legal needs in place, like taxes, licenses and permits, there are a lot of resources out there to help. A lot of this depends on the type of business entity you have chosen: a limited liability company (LLC), partnership, sole proprietorship or a corporation. Your business entity determines your tax responsibilities, like whether or not you need an employer identification number, protection against identity theft, and workers compensation insurance.
In order to run your business, you may also need to apply for licenses and permits. For example, if you’ve taken your love of fishing to the business realm, you may need a commercial fishing license. If you want to start selling your tasty, home-brewed beer, you’ll need a license for that as well. The permits you may need vary from state to state, but can also apply to various industries, depending on if you work out of your home or from separate space and whether you sell goods or services.
Getting the Hang of Workflow
Whether your business centers on a product you make and sell or a service that you provide to others, there is a start and an end to every transaction. You have many options for billing and invoicing your goods and services. Be sure if you are providing a service that your customers know the fees they have to pay up front. Late payments are one of the top complaints of small business owners who provide services like consulting, web development, graphic design or human resource management.
If you are selling a product, shipping may be one of the final steps in your workflow. Like with invoicing, there are many options out there for shipping your products to customers. ePacket delivery is one of the most common shipping services for small businesses. ePacket delivery allows for faster delivery and easy tracking, taking the headache out of managing international shipments.
Finding a Rhythm for Daily Priorities
Not every financial issue, setback or shortcoming is a crisis. As a small business owner, the phrase, “Don’t panic,” should become your mantra. If you set financial priorities for each day, you’ll rarely be surprised by unexpected business expenses. Your daily priorities could be:
- Setting and analyzing your budget.
- Checking your outstanding invoices.
- Tracking metrics like new sales, new customers and return on investment (ROI) for marketing campaigns.
- Reviewing account statements from your suppliers.
- Examining bookkeeping logs.
- Checking inventory and stock.
When you start your own business, finances can be shaky for the first year and maybe even longer, depending on your industry. However, your business can have financial health from day one if you are mindful about the present and realistic about the future.