So, you’re starting a small business. You’ve got a product, a business plan, and some initial capital. You’re ready to launch! But now, you must start taking care of your finances. Adequate financial management can mean the difference between a successful startup and a failed one, and it’s important to understand how finances for small businesses work. Here are some tips to get you started.
- Separate Your Finances
In the initial stages of your business, it might be tempting to just continue using your personal accounts to run your business. But this is a bad move – not only is it going to be a nightmare when it comes to tax season, but it can put your personal assets at risk. Ensuring that your business has its own bank account and is incorporated correctly can ensure that you and your family are protected if your business fails.
- Make a Budget
Budgets are essential for financial health, whether it’s personal or business related. Even if you don’t have solid numbers for your expenses just yet, having a projected budget and keeping track of your money can help you keep your business in the black and avoid any nasty financial surprises.
Make sure that you include all of the expenses of running your business in the budget – that includes one time expenses, fixed expenses such as your rent and insurance, and variable expenses such as product materials, marketing costs, and processing fees.
- Consider Hiring a CPA
If your business is in the early stages or your finances are relatively simple, you might be able to hold off on hiring a CPA for a while. But in the long run, it’s better to have the advice of an expert on hand to ensure that your finances are all in line. CPAs don’t just file your taxes – they can assist you with financial strategies, negotiating leases, tax compliance, and treasury management. Make sure that you’re hiring a CPA that suits your business and budget.