Arguably, one of the most common reasons why new businesses fail is that most of these businesses didn't set up solid financial systems from the beginning. Too many small business owners fail to keep clear and accurate records of their revenue and expenses. Then they find it difficult to determine whether their business is making enough profit or not.
If you happen to be one of those business owners who overlooked the necessity of setting up your books properly or have not been keeping good financial records, there's no reason for you to postpone establishing good financial systems for your company. Don't forget that accurate and up to date financial systems will not only help your business grow, it will also keep you out of trouble when tax time rolls around.
If you have a bookkeeper, set aside some time to make sure they know what they're doing. A freelancer who dabbles in bookkeeping on the side is probably fully aware of all the tax deductions you are able to claim (heat, electricity, phone, rent, etc). It may be time to find a dedicated (but virtual - hey, you need to save money) bookkeeper who actually has an accounting degree. Unfortunately, many self-proclaimed bookkeepers do not, and this could be costing your business thousands of dollars in overlooked deductions.
If you don't already have a bookkeeper and have been attempting to handle your books on your own, you really need to find one ASAP who knows what they're doing. They can help you set up a good financial system if you don't have one in place, or even clean up the mess left over from an untrained bookkeeper.
Setting Up Your Financial System
A professional bookkeeper will be able to keep records of all of your financial transactions. From setting up a Quickbooks account to charts of accounts, they'll then record all your earnings and your expenses. To keep everything simple, it's ideal to keep all records and receipts in the cloud. This will prevent the dreaded shoebox of receipts to go through at the end of the year. A professional bookkeeper will keep on top of everything, alert you when things don't match up, and reconcile like a champ. All of your bills and receipts will be in a secured folder that can be shared with your accountant later on for purposes of filing your income tax returns.
The great thing about using accounting software is that you do not have to keep a lot of papers on hand in your office and you do not have to bother writing things down a number of times. With the use of good accounting software, all your bookkeeper needs to do is to enter your financial transactions for the month and the software will do the rest of the work.
Most accounting software programs will also give you complete financial statements after your bookkeeper has uploaded all the necessary information so you get to save a lot of time and efforts in computing your earnings. What is more interesting about this computer software is that some of these (like Quickbooks) can also help you project your future income and calculate your estimated internal rate of returns.
How Much Will the Accounting Software Cost You?
The price of the accounting software will depend on the complexity of the program that you need. Besides, you can always put the cost of accounting software as part of your business expenses. Get organized early in the game (or NOW if you've been procrastinating) and avoid the pitfalls that may come later.
If you need more tips, Entrepreneur Magazine has a great article called "Keep Your Business Finances in Order With These 6 Tips". Ready to hire bookkeepers who can tackle your business's financial systems? Give The Bean Counters a call at 912-376-9918.
One way to cure procrastination is to simply outsource what you hate. Instead of setting deadlines for yourself, set deadlines for other people. There are few things that you can’t outsource today. So, the first clue you have that you should outsource something is that you dislike it. But there is more to it than that.
Does It Make Sense Monetarily?
Often the things you hate doing are considered (at least by you) to be menial tasks. Tasks like bookkeeping, data entry, marketing, sales, and so forth. These are tasks that are ripe for outsourcing because they are boring (to you) and more than likely you can earn more money outsourcing it and turning your focus to your main money maker.
For example, if you earn $100.00 per hour doing your main business, why would you do tasks that can be outsourced for $35.00 per hour? You’re missing out on $65.00 per hour if you don’t outsource.
Are You Skilled At Doing It?
Many things that you hate doing are likely simply because you’re not good at doing them. It’s okay not to be good at doing everything. This doesn’t mean you’re deficient. It just means that you can’t do a good job doing something you weren’t trained for and have no talent for. It’s okay and not a sign of weakness on your part.
A good example is bookkeeping and accounting. If this is not your core function for your business, then it probably takes you ten times as long to do it, and it is poorly executed to boot. While hiring an expert of this caliber may cost you, the time savings will make up for the discrepancy.
You’d Rather Be Swimming (Golfing, Fishing, etc…)
Sometimes you hate doing something just because it’s taking away from the things you really want to do. When your business gets to a certain point, it makes sense to start outsourcing various activities so that you can do other things you consider fun to do.
The rule of thumb is that if it’s not your main line of work, that outsourcing it is perfectly fine. The other thing is, if you can outsource it for less than you can earn from your core line of work, then you’re ahead of the game too. Of course, you want the outsourcers to do as well as you would for the job, so pick your outsourcers carefully and consider that you usually get what you pay for.
To find outsourcers and contractors, check them out on LinkedIn, visit their website, read their testimonials, or even contact people they work with. Conduct a thorough investigation about the people you are going to trust with this work to ensure that there aren’t any problems. Are they qualified and certified? Do they have legal licenses in place? How long have they been doing it?
Putting all this together, if you hate doing certain tasks, it’s preferable to outsource. In fact, if you’re not outsourcing these tasks, you’re doing yourself and your business a disservice. Even if you can’t bring yourself to outsource some things in your business, consider outsourcing some tasks that every business needs such as bookkeeping and accounting to help you lessen the pressure on your life as you build your business.
Most consumers trust their friends, family, influencers, and experts to make recommendations about products and services to them. In addition, there are many ways to make recommendations - from online testimonials, to affiliate links, to direct mentions from the customer.
They all work to some degree.
To encourage your customers to provide referrals, you can take some steps in advance that set everything up to turn your best customers into your biggest assets.
1. Be Excellent
The better you do your job, the more pride with which your customers can recommend you to others. If you provide excellent products and services, your customers will be happy to provide referrals when asked to do so.
2. Ask Customers to Refer You
Just ask your customers to please offer referrals to their friends and family who need your products or services. Give them some literature and information about your offerings so that they can easily share.
3. Create an Active Online Community
Using either a message board, forum, or private Facebook group, creating an online community can help spread the word of your good services and products fast to those who have need of them.
4. Build a Long-Term Relationship
Focus on relationship building over the long term and you will create true raving fans that are eager to recommend your business. When you have a real relationship with someone, they’re that much more likely to tell others about you.
5. Create a Formal Referral Program
Offer discounts to friends and family recommended by customers, along with a coupon to the one who gave the referral. With a formal referral program you should let every customer know about it as soon as they become full customers.
6. Use Social Media Strategically
Offer a coupon code for consumers “liking” or “following” your brand on social media, and encourage them to share. Offering sign-up incentives for newsletters and more always helps get the word out about your services.
7. Market Your Testimonials
When someone gives you a raving testimonial, turn it into a meme, ask for a recording, put it into many formats and then publish it and market it across all channels. Market your testimonials as you could other types of content.
8. Follow Up
Always follow up with customers who have provided referrals to you by offering them a discount, a thank you note, and acknowledgement. The more you follow up after a positive referral, the more likely they will to continue doing it.
Word-of-mouth referrals are over 50 percent more effective than other forms of marketing. If you want to develop a long-term business, the best way to ensure that it really is a long-term business is to encourage word-of-mouth marketing in every way that you can.
Many business owners find after years of being in business that most of their customers come from word-of-mouth, which lessens the need to expend more time, money and effort on other forms of marketing. As your marketing efforts pay off, if you haven't already hired a bookkeeper to keep track of your business's finances, now is the time. A bookkeeper will pinpoint which customers are your best assets and free you up for more time to spend on marketing and growth, increasing your bottom line.
When you start up your business you’ll want to figure out your tax-related business identity. There are a few choices depending on where you live. In the USA you can choose to be a sole proprietor, partnership, a limited liability corporation (LLC) or a corporation. Each has different rules, regulations and tax consequences. It will depend on your individual business and what works best for you.
Some types of businesses are required to be in a certain category, but a large share of businesses can run as sole proprietors or LLCs easily.
This type of business set-up means that there is just one owner who is totally responsible for everything. It’s the easiest way to start a business, and how most people get started as long as they’re not in a category that requires another entity.
One problem with this type of business is that if something goes wrong and a customer or other person is harmed in some way and brings a lawsuit, they can win your personal funds and even take your home. Taxes are easy in the USA with the schedule C on personal income taxes.
If you are running a business with another person, then you may want to form a partnership. You don’t have to in order to run a business with someone else, but it can offer another level of protection for both parties in the event of a disagreement or even a lawsuit. Income taxes are simple and somewhat like the schedule C reporting, with an additional information return filed. This type of business can be difficult at times, but it’s just as easy to set up as a sole proprietorship.
Limited Liability Corporation
Many people like to form LLCs because they have the opportunity to file taxes as a partnership, corporation, or even as a sole proprietorship. The LLC is mostly just to protect individual business owners from personal liability if something goes wrong and a lawsuit happens, or if the business goes under.
There are many types of corporations such as an S Corp and an INC. These are the most expensive types of entities to form, and have many requirements such as having a board, separate taxes for the business and owners, and other issues. You’ll definitely need to work with a CPA, bookkeeper, and perhaps a corporate lawyer to help you form a corporation and keep compliant with the laws.
The business entity that you choose will make a difference in how you file income taxes and run your business on a daily basis. You’ll need to speak to a financial expert such as The Bean Counters Bookkeeping to help you determine which entity is best for you.