The millennial era, did not just bring the revolution and boom of the digital media, it also saw an influx of entrepreneurs. A home based business is no longer part of the cottage business model; which has evolved exponentially into becoming globally born corporations.
Since the internet made everything more accessible and available at the tap of an icon. Startups have started to rocket; as a matter of fact, they now account for more than half of the jobs in the US.
However, even though the internet has empowered a great number of individuals to work for themselves. It is also important to understand that more startups shut down as compared to those that open up. One of the major reasons behind it is small business owner’s ability to manage and maintain their expenses and bookkeeping matters. Majority of the reasons behind these closures is the misinterpretation and mishandling of the business’s financial data. Within this article are 4 suggestions for small business owners on how to reduce their expenses on their startup.
As a business owner, a lot depends on you. How you manage and control your money, spending too much too soon can sometimes result in your business-boots being hanged in the closet for good. Keep a digital trail of all your money and all of your expenses. Jot every expense related to your business down, from petrol expenses to salary expenses.
Spending is way too convenient for you to be noting it and jotting whatever you’re spending on a daily basis. A big problem small business owners have when they are starting up, is that they spend on daily minor expenses, from their personal account, rather than from the business account. Here is where technology comes in handy, updated software such as Monily does not need for you take out a weekend or a time of the day, to feed in your expenses and safe keep your receipts. You simply need to remember to take a picture of your recent expense. Monily will automatically add your expenses on to your expense and revenue sheet. You can also choose to see your average daily/monthly expenses to get a better feel of where you’re spending and on what.
Every successful business’s secret is that it is well structured. Again, keep a separate business account and a separate personal account. Sort out how you want to get paid for the services or services you’re offering. Have a clear pathway on how to receive payments and also organize your accounts payable. The clearer and less messy your financial transaction are the more money you will be able to save.
Tax season creeps on fast, you’re indulged within the day to day activities of your business, and before you know it. It’s time to file taxes, but your bookkeeping and taxations aren’t really ready for it. That’s why it is smarter to take an hour or two out on every weekend to sort out your books. Maintain them tax ready, and hire a CPA that can prepare you for tax season as well as maintain your books throughout the year. Having a reliable resource looking after your books, can be a way to save more money in order to spend more on your business. Hiring a Certified Public Accountant can be costly, since you’ll need additional office space and their monthly salary will be very hefty on your pocket. For the same reason, a more budget friendly route to take is to hire someone virtually that can take care of all your bookkeeping needs virtually.
The core reason for any business is to make money, and climb the ladder towards becoming an entity that crosses the startup phase. The best way to do so is by having a cost reduction plan that can create ways to save money in business. At the end of the day the more you save the more you have to spend on other business essentials. The four things that you do need to start doing today to save money are spending in a smart way, getting into the habit of regularly maintaining your books, sorting out your payment method and lastly but the most important; preparing your business for tax season throughout the year.