Small Business Financial Tips

Being an entrepreneur can be a challenging endeavor, but it is also incredibly rewarding and thrilling. There is also the stress of becoming financially responsible for a small business with no end to the many fiscal, legal, staffing, marketing, and customer issues that will come up as you launch your company.

Small business continues to grow, with companies under 500 employees adding over 1 million new jobs (more new jobs than large businesses) and companies with less than 50 employees showing the largest growth, contributing to about 40% of new jobs, according to the Bureau of Labor Statistics.

This is clearly a healthy and growing sector, as evidenced by the U.S. small business administration reporting that there are almost 10 million women-owned businesses, boasting $1.4 trillion in annual income.

There is however a lot of conflicting advice out there for the budding entrepreneur. Hopefully the following tips will help you navigate the journey of self-employment:

Monitoring Your Finances

Invest wisely, save your profits, and keep your overheads as low as possible. Reduce your debt, scrutinize your spending habits, and stay on top of your budget. Your income and expenses need to stay balanced to maintain a growing venture. Learn to live on a frugal budget until your hard work pays off and you start to see bigger revenue streaming in to the company.

Hiring and Firing

Hiring the wrong people is one of the biggest mistakes made by entrepreneurs.

Don’t just hire someone because they’re a friend, or because you seem to like them. You must do thorough reference checks on them. And make sure your offer letter says they are “at will” employees and can be terminated at any time. Don’t forget the old quote: “Hire slowly. Fire quickly.”

Never rush into hiring a prospective candidate. Use diligence, not desperation.

Networking

Your contacts are a web of potential prosperity. Keep growing your list of people. Networking can land you a new investor, a great employee, or a new customer. Attend industry and startup events. LinkedIn can be a powerful tool to help you network, so make sure both you and your company have profiles on LinkedIn and that you are constantly adding new connections. When someone does a Google search on you, your LinkedIn profile will usually show up at the top of the search results, so be sure you’re making a good first impression.

Service

No matter what else you are known for, be absolutely certain that no one could ever say anything bad about your services. Focus your efforts on providing top quality service that satisfies the needs of your customers, and then some. You will want your early customers to be ambassadors for you, spreading the good word about your company, singing your praises and giving many referrals. Thank your customers personally. Go the extra mile. It will pay off.

Get your business in order

You need a savvy business lawyer for your company, one who has regularly formed and advised many other entrepreneurs and who specializes in startups. An experienced startup lawyer can help you:

– Incorporate

– Draw up contracts with any co-founders

– Prepare key agreements for the business

– Set up a stock option plan for employees

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Some of this material has been provided by Broadridge Investor Communications Solutions, Inc.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC