According to research, one of the prime reasons for small business closure in the United States is poor cash flow management. This can impact college entrepreneurs as well, despite certain skills (like familiarity with technology and a fresh, enthusiastic perspective) that they also bring to the table. Simply put, as a new business owner, keeping expenses in check is key to ensuring your business survives the crucial one-year mark and excels in a competitive market. To help you in this process, Leangap explores some money-saving tips for all business areas.
Set Business Priorities
As a budding entrepreneur with a limited budget, it is essential that you utilize all available resources towards tasks that provide the best returns – including free resources. For instance, to help get the word out, try a YouTube banner template that will allow you to reach a huge potential audience without breaking the bank.
There are plenty of other crucial tasks, as well – like creating a master list containing all tasks from every area of the business. At this stage, don’t bother about organizing, instead, list as many tasks as you can. Once you have included all tasks from the top of your head, hone in on those which you may have missed, and work towards including even the smallest of tasks such as buying stationery. When your list is complete, move on to the next step.
Use the Eisenhower Matrix
This is an organizational technique created by former US President Dwight Eisenhower. The matrix denotes a four-quadrant box in which you will place tasks based on the following criteria:
● Urgent and Important: These tasks should be completed on a priority
● Important, but not urgent: Create a schedule for completing these tasks in the near future
● Urgent, but not important: Choose to delegate these tasks to others
● Not urgent or important: Tackle these tasks only when all others are completed
To keep your lists organized and accessible, opt to use a project management tool. As these tools are cloud-based, everyone in your organization can have access to the list.With just a few clicks, you can set deadlines and assign stakeholders for all tasks. As reported by ProofHub, using project management tools will improve team collaboration, reduce wastage of resources and result in faster decision making.
Stay on Top of Taxes
Small businesses need to abide by numerous tax obligations, add employees to the mix, and you need to cater to employer-related contributions and further filings. Failing to meet these obligations can lead to heavy fines being levied on your business by the IRS. Hence, it’s important to educate yourself regarding your tax responsibilities and plan ahead for making necessary payments and contributions.
If you’re struggling to understand your tax responsibilities, it’s best to hire professionals who can assist you in tax planning, making contributions, and submitting paperwork to the IRS on a periodic basis.Additionally, you can also avail of their services for other important business tasks such as:
● Payroll Management
● Financial Audits
You can further simplify the process of tax reporting by opening a business bank account. This will avoid overlap between business and personal expenses, providing greater clarity regarding spending, cash flow management, and receivables. Moreover, you may become eligible for merchant discounts, high credit limits, and other offers provided by your bank.
Choose the Correct Business Structure
Each business structure provides entrepreneurs distinct advantages, hence it’s important to decide on one which meets your needs and expectations. For instance, if you need to raise funds from investors, the best option is to register your business as a corporation. As a corporation, you’ll have the ability to issue shares, streamline the process of receiving funds and ensure you retain control of your business (unless you choose to sell 51% of the shares).
The rules for registering a corporation can vary based on the state you’re located in.Additionally, it’ll include submitting an array of documents, financial statements, and more. To streamline this process consider hiring a formation service. This will help you avoid hefty lawyer fees that you’ll incur when trying to file independently.
Despite the usual obstacles, college entrepreneurs also have a massive advantage in that they’re familiar with modern technology and social media – not to mention all the fresh ideas and perspectives they bring to the table. So utilizing these strategies as a new business owner will help you maintain a positive cash flow, allowing you to outperform your competitors and set your business up for success.