Without the resources that large companies rely on to keep their business running smoothly (think human resources, finance, legal, etc.), it can be difficult to learn how to start and run a small business. From incorporating to learning how to manage a small business budget, to hiring and firing employees, entrepreneurs have their hands full, if only with the principles. basics of effective small business management.
In this article, we share the best tips and tricks to teach every entrepreneur how to start, fund, and run their own business.
1. Take care of your mental health
While it may seem odd to start with this aspect of how to run a small business effectively, it is actually the basics of starting a small business. Starting and running a small business can take a toll on the mental health of its owners. It is important for entrepreneurs to take care of themselves throughout the process. Make time for yourself to relax. Whether it’s doing some meditation or yoga, or just going for a walk while listening to a podcast, a hugely important aspect of running a successful small business is taking time for yourself.
The other key thing is to be flexible. Your business might not turn out exactly the way you planned. Leave room for your business to adapt to market trends.
2. Find the right structure
Although there are many aspects to running a small business, it is important to start with the basics. A clear vision or purpose will help you get off on the right foot and chart a clear course for your entrepreneurial journey. Do market research. Make sure your small business fills a need in the market and that there is a strong demand for the product or service it will provide. Once this need is determined, you can incorporate or establish a separate limited liability company. The important thing is to make your business a separate entity for tax purposes, even if you are the only employee.
This way, your personal assets will be protected if your small business experiences financial or legal problems.
3. Separate business from leisure
Regarding the protection of your personal assets: even if you do not incorporate and establish a separate limited liability company, you should separate your business finances from your personal finances. Open a bank account that will only be used for the business and apply for a credit card that you will only use for business expenses. This will make your job easier as you try to figure out the best way to manage small business receipts and taxes.
Visit our Business Banking Center to find the account that’s right for you.
4. Hire a professional
Another practice that will make your job a lot easier come tax time is to work with a bookkeeper. Although small business owners can’t always afford such an expense, knowing that their finances are being handled properly gives them some peace of mind. A bookkeeper can help business owners manage small business funds, as well as taxes and payroll.
It is also strongly advised to have an accountant in your professional directory, especially for tax time. Unlike a bookkeeper, an accountant can give you advice on the best ways to manage your finances, as well as tips and tricks to optimize your taxes. A good accountant will provide advice to help you manage your cash flow as your business grows.
5. Use technology
If you can’t afford to hire a bookkeeper, try going into bookkeeping. Many accounting software programs can help business owners manage their expenses and finances. FreshBooks and Quickbooks are two popular software.
6. Pay the taxman
Another essential practice for managing the accounts of a small business is to always pay your taxes. Keep in mind your payment schedule, as well as the approximate amount that will be due. An unexpected tax payment can spell the loss of a small business. It is extremely important to always manage your cash flow and know what amounts will have to be paid when.
Managing employees is one of the most challenging aspects of running a small business. What probably started as a sole proprietorship (or perhaps a business of a few people if you have partners) will, if successful, need to expand beyond the founding team. Since managing employees requires time and money, it can be difficult for a small business to hire employees. However, both of these investments can be worth it, provided you follow a few simple rules.
