3 Financial Tips For Small Businesses
Owning and operating a small business is a dream come true for millions of Americans. In fact, there are 28 million small businesses operating across America. Of that 28 million, 22 million are operated by just one person and have no employees. Whether a small business is run by one person or operated by a handful of people, staying financially savvy is a must. Some small business owners find bookkeeping and taxes to be major hassles. Here are three financial tips for small businesses.
Operate Like A Business
The first thing that any small business owner should do is make sure that they are operating their business like a business. It may be tempting to run a business using personal accounts. However, opening business accounts and business lines of credit can make it easier to keep personal finances separated from the finances of the small business. Many small businesses also decide to become a limited liability corporation, or LLC. Structuring a business as an LLC can help protect personal assets and make it easier to file taxes. It costs anywhere from $50 to $500 to file the paperwork to become an LLC depending on the state.
Hire A Bookkeeper
Keeping track of the day-to-day business dealings of a small business can be more time consuming than many small business owners realize. A good way to stay on top of this is by hiring a bookkeeper. Small business bookkeeping services are more affordable than many small business owners realize. An outside bookkeeping service will typically charge between $20 and $50 an hour. Basic bookkeeping software typically costs between $165 and $200. Overall bookkeeping can cost as little as a few hundred dollars each year or as much as a few thousand depending on the size and needs of the small business.
Stay On Top Of Taxes
Another thing that small businesses should consider is their taxes. Staying on top of tax preparation is essential. This means keeping the necessary paperwork and records that can make filing taxes a seamless process. Tax preparation can be done either using software or by using the services of a professional accountant. Tax preparation for a small business using a professional accountant typically runs between $100 and $400 per hour. Tax preparation software usually costs less than $100 but is more labor intensive for a small business owner.
When it comes to small businesses, keeping track of finances is very important. Small business owners should keep a budget and work to establish the business separate from their personal finances. Hiring a bookkeeper and staying on top of taxes are also essential for running a successful small business.