Five tips that every small business owner should know:
1. Pay your taxes.
You should budget and pay your taxes every month. Most businesses get behind on paying taxes. The IRS can come after individual officers of a company for unpaid payroll taxes. You need to work with your accountant or payroll service to keep current on your payroll taxes. If you are self employed, then you should make estimated quarterly tax payments. You should budget this amount or work with your CPA to estimate your estimated tax payments.
2. Create monthly and yearly budgets to increase your income and reduce your overhead and expenses.
A small business owner should keep their overhead down and your revenue up. You constantly need to watch your expenses and try to increase your revenue. You can create a monthly budget and keep yourself and your employees to the budget. You never want to your expenses to rise faster than your income. You are in business to make a profit. This tool will help you manage revenue and expenses.
3. Have good internal controls in your business.
Talk to your CPA and discuss how you can improve the internal controls of your business. For example a business should probably separate certain duties. For instance, a business should separate the cashier duties from the accounting duties. You don’t want one person doing the deposits and paying the bills. Most small businesses rely on one person. If you do, then you really need to be involved in the business. You should review the deposits, payments, and payroll. You should also consider requiring two people to sign checks. It would prevent theft. You should talk to your CPA on additional ideas on how to prevent fraud and increase your internal controls of in your business.
4. You should plan your business structure.
You should talk to your CPA or tax attorney about what business entity is the best for your business. You could save some taxes by having the correct entity for your business. You should also plan a head to create a buyout provisions if you have partners involved in your business. When you start a business, no one wants to discuss these matters. However, it will save you time and money if you decide these matters up front instead of ending up in court. If you set up a limited liability company, then you should have an operating agreement that provides for a price should a member or partner decides to leave the company. If you have a corporation, then you should have a shareholder’s agreement with similar provisions. Planning ahead will save you money. This will increase your bottom line.
5. Continue to get advice.
As your business grows, you should continue to get advice from your CPA regarding benefit and retirement plans. These plans will save your company money on taxes and keep your best employees happy with your company.