In today’s economy, in order for your business to be successful you need to have good business practices. Below are some good business practice ideas to consider that may help your business become more successful.
1. Do you have a business plan? – A business plan is designed to be an outline for your business. It states who your business is and what it plans to accomplish while in existence. The plan will outline various goals the business wants to achieve, as well as outline the direction the business will take over the next three to five years. The business plan should be in writing and reviewed/updated regularly. Regular updates to the business plan will help the plan stay current with the short-term and long-term goals of the business, as well as provide accountability that the business is actually meeting the objectives set out by the plan.
2. What type of entity will be most beneficial? – There are various forms of business entities that you can choose to operate your business. These include sole proprietor, partnership, limited liability company (LLC), a corporation, and S-corporation. Each type of entity has a different tax implication at the business level as well as the individual level. When trying to determine the best entity for your business you will need to think not just about where your business is today, but where it will be in the future. For example, you may not anticipate a large of amount of income in the first year or two, but by the end of five years you might be making a significant amount of income. If that is the case, then a sole proprietor or LLC may not be your best entity selection due to the self-employment tax issues that accompany both of these entities. Entity selection is also important from a liability perspective; therefore, consideration should be given to your business activity and potential liability protection needs at the business and individual levels.
3. Do you have strong funding? – Starting any business will require working capital. You will want to identify resources to provide cash flow before your business actually starts producing revenue. Your initial working capital may come from a lender, an investor, or you. Not having good funding resources identified before your business begins could limit your business’s growth potential down the road.
4. Do you have strong recordkeeping? – Good recordkeeping is essential to your business’s success. The only way to know if you are really being successful is to see the success quantified. While your business may not be large enough to require a sophisticated accounting system, there still needs to be something in place to gather the daily income and expenses. This could be something as simple as a manual check register or an excel spreadsheet. For businesses with more activity a stronger accounting software might be needed to produce financial reports for internal, as well as external analysis. Maintaining your records from the start of your business will also make the tax return process smoother.
5. Do have a professional network? – A good business owner needs to have a professional network that will provide support services that will aid in the success of the company. This network should include a CPA, lawyer, banker, and other consultants (i.e. advertising/marketing, bookkeeper, etc.). Not only will these people be a resource to the existing needs of your business, they can also serve as a resource to connect your business to other businesses in your community if the need arises. A good CPA, lawyer, and lender will be essential to fielding the many questions a new business owner will have at the formation of a business. Having these people on board at the start of your business will help ensure decisions are made correctly on the front-end v/s having to correct mistakes after-the fact.
Please feel free to contact us to discuss any of the above items. We would be happy to assist you with implementing good business practices that will help your business flourish.
About Blackman & Sloop CPAs, P.A.:
Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com
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