Starting a business for the first time is an exciting venture. How do you know you’re ready? Growing and operating a successful one takes time and education.
Thousands of start-up companies fail each day because they have learned basic knowledge only. Basic education only cares about more sales and clientele. While making more sales and building your clientele list is fundamental towards reaching new levels, that certainly isn’t the only strategy your business should focus on. Today’s article will challenge you to see the bigger picture.
Real business owners think big, and they work hard at building brand names and legacies as well.
Don’t Overspend
To prevent your business from going into debt, watch your spending. I know it’s tempting to buy supplies in bulk but refuse to do so. Slow and steady wins the race! In the beginning, you need to learn your business. You need to focus on finding out how your customers found your product or service.
Pay attention to which days tend to bring in more revenue and which gender and age groups of people your product or service attracts. Once you have this data, you can order in bulk according to the consistency of sales that you have received in previous months, based on fact sheets.
If you know that during the holidays, you have sold roughly 300 facial creams to consumers, then stock up according to the facts. Many entrepreneurs make the mistake of stocking up on product labels and containers in bulk before they have even made their first sale. This is a sure way to go in debt. There is no worse feeling in the world than having to resale every single item you purchased in bulk because you realize you won’t be in business too much longer.
Buy Stocks
Do you know Uber is worth over 100 billion dollars as of 2024? Do you think they have earned over 100 billion dollars from rideshare revenue since the time they have been in business? No! Uber has a stock portfolio. Uber did not make 100 billion dollars from rideshare revenue alone. This company is worth so much money because it has established a successful stock portfolio.
The current CEO, Dara Khosrowshahi owns 196,000 shares of Uber stock. As your business grows and you have convinced others to see the value in your business based on many factors, you want to allow your partners and investors an opportunity to own a fraction of your company. By doing so, your company’s net worth goes up, and you have more money to spend on promotion.
Business owners can also have a stock portfolio to purchase shares from other well-established companies that are not in the same niche as them. It’s a great business practice to hire a professional stockbroker to manage your stock portfolio. Many small companies that operate as an S corporation can purchase stocks just like any individual would.
Not only should you be purchasing stocks, but you should also be buying stocks that offer dividends. Some companies offer dividends, which could potentially pay you every 2 weeks, quarterly or annually, depending on the stock.
To give you an example, you would purchase one stock for $8.24. If the company offers an annual dividend on that stock you purchased, you will receive an annual percentage of that stock the company is offering. So, for as long as you own the stock and the company is willing to pay you a dividend percentage, you will receive revenue. When investing your business earnings into the stock market, keep in mind your earnings are taxable.
Your business has to pay taxes on stock income. Tax Write-Offs One of the fastest ways business owners can go into debt is by not taking advantage of every single tax write-off. For this reason, business owners should take their time in wisely choosing a tax preparer.
When speaking with a tax preparer, it’s a great idea to bring with you a list of items you believe you can write-off. The tax writer will let you know if your purchases are eligible for a write-off. Always choose a tax preparer with at least more than 10 years of experience minimum. What should you include on your tax write-off list? For one, you want to have office expenses. If you operate your business out of an office and you paid for the printer, paper, pencils, pens, computers/laptops, electric sharpeners, write it down on your list. Whether you’re leasing, renting, or you paid for the entire office space, you want to place that on your list as well.
Take out regular business credit reports from Reporting Accounts on your suppliers that way you can be sure to have up to date information on their likely creditworthiness
Depending on your small business type, you might even add computer apps that you have purchased to your list if you had to purchase the apps for your business. If you purchased a cell phone with cell phone service for business purposes, you want to add that as a deduction towards your tax write-offs.
Just keep in mind if you use your cell phone 75% of the time for business, you can only deduct 75% during tax season. The list of things you can deduct certainly goes on and on. So, take your time when writing down your list and save your receipts when purchasing supplies for your business.
