Starting your own business is exciting, a real adventure. It can also be demanding and bewildering if you have never run a business before. Here are 6 tips for starting your own business you can use to make sure your new enterprise is set up for success.

“The beginning is the most important part of the work.” Plato

1. A Business Plan Will Take You a Long Way

A business plan is a written document that describes your business objectives and how you will achieve your goals from a marketing, financial, and operational viewpoint. It’s an essential roadmap for starting your own business. Writing your plan out is a great way to focus on how you will describe your business when you look for funding, employees, and support services such as insurance. A well-done business plan answers questions others may have about what you are doing.

Business Plan Basics Include –

1. Summary – What is your 5-minute elevator pitch?
2. Business Description and Structure – Your what and why for being in business.
3. Research – This is your analysis and marketing strategy.
4. Management and Personnel – Include biographies for leadership and explain their expertise that will support your goals.
5. Financial Documents – Be as precise as possible. This section will assist you with funding. Be sure to include projections for Profit & Loss, Balance Sheet, and expected cash flow for the first three (3) years. These projections are meant to look toward the future.

 

If you’re already in business but don’t have a plan, it is never too late. The Small Business Administration is one place you can look for support and assistance to understand this critical and essential tool. There are also many online resources for templates.

2. Delegation: Who’s Going To Do What in Your Business?

Getting organized is the best thing you can do for yourself and everyone involved when starting your own business.

I’m a list maker. Whenever I start something new, I make a list of everything we need to do and who I can delegate what tasks to. Many new entrepreneurs do not realize they don’t have to do everything themselves. If I don’t know how to do a task, I look for the right person with the right skills. None of us walk the road to success alone; the way is paved with the contributions of many voices.

A critical area that needs this kind of organization is your bookkeeping. Ask yourself:

1. Will you keep paper records or make use of virtual storage for electronic document copies?
2. How will you organize your receipts, bank statements, and other documentation?
3. What accounting software should you use?

 

Bookkeeping is one area of your business where delegation to a professional really pays off. Excellent documentation will save you time and frustration. Bookkeepers, CPAs, and business coaches are great resources for how to set useful processes in place.

You can hire them to set up your bookkeeping software, adapt common business practices to your situation and train you how to move forward on your own. They can also be valuable

Keep it Simple – Keep ’em Separated

Believe it or not, separating your business and personal finances is the simplest way to go. Yes, you will have more accounts to monitor. The upside is you will also know what resources are available to grow your business and to pay your mortgage.

The Four Financial Tools Your Business Needs

1. A Checking Account Dedicated to Operations – This is the account that all revenue, and I mean ALL REVENUE, runs through. It’s the account you use to pay bills, receive payments, and distribute funds to other accounts.
2. A Business Savings Account – I always recommend business owners have a dedicated savings account that holds a percentage of their revenue and put it in savings. This account ensures there is money to pay taxes, and funds available for unexpected events.
3. A Personal Banker – Also, I recommend you get to know your banker. They are a terrific resource, a wealth of knowledge you need, and can help solve problems.
4. A Company Credit Card – Using a credit card and paying it off by the end of each month is an excellent way for your company to start building a credit history. Making two payments a month grows your credit rating even faster. Using a business dedicated credit card can track cash flow. It eliminates keeping track of cash and builds a transaction trail that documents your business.

 

4. Have a Petty Cash Fund

What if you must be gone from your new business and you need your employees need to handle things? In the absence of an employee credit card, Petty Cash is your answer. Petty Cash is a separate fund where you keep a necessary amount of cash on hand for business use. Entrepreneurs often keep a cash box for this fund.

How to Manage Your Petty Cash Account

• Start each month with the necessary amount you distribute to Petty Cash. $50.00 to $100.00 is a good range for your cash box, depending on your business’s needs.
• Keep a Cash Journal in the box where you record the date, person, and amount of money taken out. After purchases are made, record the date, the amount spent, and the item purchased.
• Change from the purchase goes back in the box. Petty Cash is not a personal bank account.
  At the end of the month, add up the amount spent and put that much cash back in the box to replenish your original amount.
• Last, record the purchases in your financial software, so your expenses are updated.

 

5. How Do I Grow from Here?

Knowing how much money you have coming in and what money is going out is KEY to planning and supporting your business. One of the best planning tools you can give yourself is to create a budget and include it in your financial software for great reporting.

How to Create a Business Budget

Starting your own business begins with creating a budget. Here’s a simple step-by-step list designed to walk you through creating a basic business budget.

• Start by listing descriptions down the left side of a piece of paper or Excel spreadsheet.
• Create a column for each month and one for horizontal totals.
• Record all the income you expect to receive, in the month you expect to receive it.
• Underneath your income, list the expenses you already know about, and the ones you expect, as quarterly taxes, annual payments, or new consultants. Again, record the expense in the month you expect to pay it.
• Add your columns vertically at the bottom and horizontally in the last column.
• Review the amounts and make educated guesses about if your margins are too slim or if you might need to add 10%.
• Once you have your budget outlined, you can enter it in your financial software. This outline will give you the ability to run Budget vs. Actual expense reports.
• Month by month, quarter by quarter, and year by year, you will get a sense of what it takes to run your business, grow your business, and sustain your business because you have detailed information.

 

6. Prepare to Pay Taxes

Everyone must pay taxes and starting your own business may mean adding new kinds of taxes to the list. A retail business charges sales tax, which needs to goes to the state or city government once a year. If you are an employer, you will be responsible for payroll taxes.

All companies owe Business & Occupation (B&O) taxes for city, state, possibly both when they do business. Even service businesses must pay B&O taxes.

Yes, there are some exceptions. If your business is an exception, you should receive a letter from your tax agency, letting you know this when registering for your business license.

Be sure you are aware of your tax obligations to avoid penalties and interest payments resulting from missed filing. Get help with tracking your taxes. Bookkeepers and CPA’s are resources to look to for assistance.

“The way to get started is to quit talking and begin doing” – Walt Disney

Your new business will take you on many journeys.

Each journey will teach you something you can use to enhance the next trip, and it all started with a good beginning. The ideas offered here are just a few to get you started. Talk to other entrepreneurs. Join a business network. Read books and articles.

Find the path to make your dreams come true and then get to work.