In the wake of the recession and a new job market landscape, many young professionals are foregoing the traditional job route to start their own businesses. In all the excitement of product planning, marketing and sharing your new idea with the world, you shouldn’t forget to plan your finances. A lack of financial planning is the reason many businesses fail within the first five years. Here are some tips for planning your business’s financial future:
- Build a cash reserve- If you are working part time, try to allocate 5% of each paycheck to a special savings account. If you cannot manage this, try saving $100 per week. That adds up to $52,00 a year.
- Track your spending- Keep a solid budget of your expenses. Set aside cash for supplies, and to pay yourself and employees. Know the difference between business and personal costs. Tracking your expenses is important not only for the financial health of your company, but also because, at some point, your company will likely require the services of a Gaithersburg MD financial planner for your audit, DC or wherever you reside. The more you can demonstrate where your funds go, the easier the audit will be. This brings us to our next tip:
- Consult with a small business accountant- small business accountants like CIC Wealth of Owings Mills MD can be a huge asset in your financial planning and goal assessment. They are vital to the growth of your company.
- Have adequate insurance in place- When you hire employees, you are required to provide workers compensation insurance. See that you work with a reputable insurance company. If you cannot, your employee may hire a workers compensation lawyer to seek compensation for lost wages and medical treatment. This could potentially damage your company’s reputation and your relationship with other employees. Even with a reputable law firm like, Franks & Koenig in Florida, the legal process can be stressful for all parties involved.
- Don’t overinvest in your business- your company’s beginnings may be humble, but spending less on fancy office supplies means you are free to invest more in your final product. This is especially helpful if you are relying on cash reserves to fund your business venture and again, consulting with a wealth management advisor in Gaithersburg MD, can save you from this pitfall.
The world is becoming an increasingly entrepreneurial place. Many of us have excellent business ideas, but it takes special determination and know-how to bring them to life. Having a great financial guide is just one of the ways you can help build a bright future for your business.