In today’s competitive market, running a small business can be both challenging and rewarding. We compiled a list of six invaluable tips that will help you navigate the intricacies of entrepreneurship.
Tip 1: Maximize Tax Savings
There are several simple tax saving strategies you can implement to reduce your overall tax burden. One way in which many business owners reduce taxable income is through the implementation of retirement plans. We covered options for Simplified Employee Pensions, Employer Sponsored Plans (i.e. 401(k)) and Individual 401(k)s in depth in a recent blog.
Tip 2: Watching Your Credit Scores
Hard economic times make it difficult for businesses to borrow money. Small businesses are often amongst the first to be affected. It is important to keep track of your credit scores, so that your small business does not default on payments or be delinquent on bills, which could make it difficult to obtain funding. Review your credit and credit scores on a monthly basis to assess your business’s creditworthiness.
We recommend developing a strong banking relationship and establishing a line of credit so that you are prepared during difficult financial periods.
Whether you are starting a new business, monitoring your current growth, or approaching your business exit, Trost Financial can help with your business needs.
Tip 3: Cut Unnecessary Costs
Managing cash flow is one of the most important aspects of owning a small business. This includes sticking to your budget, keeping cash in reserve, and taking on “good” debt. For example, we recommend reviewing your budget at regular intervals to help identify costs you can cut such as unnecessary subscription services.
Implementing a late payment penalty can help improve cash flow as can different payment options to cut down on the time between payments and money arriving. On the topic of “good debt,” you may be able to reduce costs by consolidating your current business loans into one new loan with a lower interest rate.
Tip 4: Invest in New Technology
Investing and implementing new technology can help your small business save both time and money while also supporting growth efforts. A Customer Relationship Management (CRM) system is a great example of technology software that allows small businesses to better identify sales opportunities or help with marketing efforts. In an age where technology rules, it is best to take advantage of what is available to help your small business.
Tip 5: Increase Your Marketing and Advertising Efforts
Simply put, effective marketing and advertising drives sales. Investing an appropriate amount of revenue back into your marketing will help you to grow your brand while staying ahead of your competition, bringing in more customers and revenue.
Tip 6: Evaluate Your Business
To be successful, it is important to understand how you fare against competitors. What kind of market share do you have? Competition in the marketplace pressures businesses to improve their products and or services. Knowing what you offer and how you differentiate from others is crucial to growth and success.
If you are interested in speaking to our business growth experts, please reach out!