Running your own business can be liberating — you really are your own boss. However, it’s worth noting that 82% of small businesses fail for cash reasons, demonstrating just how important it is to keep on top of your money and check exactly where you are.
There’s so much good advice out there to promote your business and make it successful. The Internet means that small businesses can connect with consumers, making sales simple. With that in mind, we’ll be walking you through some of the necessary steps to take to keep on top of your money and maintain your business’ success.
It’s very tempting for a successful business owner to take a large salary – either as soon as the business is breaking even, or when a credit line comes into play. While you’ll need to grant enough money to get through your living expenses, it’s wise to use wealth to grow your business rather than splurge out now. There are plenty of ways to create wealth in your spare time, such as completing gig jobs or completing online paid surveys. Don’t feel like you’re failing if this is you. Gallup has reported that second jobs are crucial for small business.
Make sure you manage your money so you know where every last cent goes, and make sure you’re not overspending on side concerns.
An incredibly important aspect of responsibly managing your business is ensuring that you return all obligations to the provincial and federal governments. The Canadian Revenue Agency penalizes tax underpayment when it reaches over a modest amount. There are ‘bounties’ for reporting irregularities in business tax, too, incentivizing the tax avoidance discovery system. The best advice is to keep on top of your taxes, always pay them to avoid big fines down the road, and keep in contact with the taxman — Canada Revenue Agency. They will often waive fees if there is a serious and reasonable excuse for the issue.
Getting a bit more advanced, it’s very important to make sure that you model your business. This encompasses forecasting, for instance, and in basic terms is very simple to do. Simply collate your data on sales, and look at how they fluctuate over a year. This will help you to ascertain when you’re likely to be able to push out extra sales, and when to stockpile capital – or schedule business changes – for a quiet period. There are multitudes of business management software available for a range of costs.
Small business accounting can be a daunting business but it’s not so bad. It’s a case of hard work, a keen eye for what you’ve got coming in and going out, and a creative mind to make the most of your resources.
Guest article by Lucy Wyndham.