Article Contributed by Henny Kel
It is not unknown that most of the highly successful people have shared their traits which include tenacity, vision, luck, hard work and being business savvy. It is often heard that people like Bill Gates, Steve Jobs, Mark Cuban, have “Midas touch” as they seem to be able to turn the majority of their business into successes.
No one can deny that these successful entrepreneurs are now masters in managing their finances and their business to a certain degree because of their virtue of enormous success.
It is observed that when it comes to managing the fund, most entrepreneurs don’t understand the tax and accounting elements that well. In fact, most entrepreneurs don’t enjoy this side of the business, and they rather want to spend their time and energy to find solutions, new product or services, they want to grow their businesses. This, therefore, results in neglecting the financial side of the business which creates government compliant risk, unneeded legal tax, and undermining their business success.
To become a master of finances of your business, you have two options:
- To become a learner for lifetime
- Surround yourself with a good team
- Become a Lifetime Learner
For becoming a successful entrepreneur one of the most important traits is to be a learner. People who keep absorbing new information, broaden their knowledge by attending seminars and reading. And well, those who seek consistent advice. Those who don’t can usually be found scratching their heads when the real problem comes. The latter kind of people then hopes that the stars will align magically for them.
Having vast knowledge in your field will always set you apart from your competition.
- Surround Yourself with a Good Team
It is commonly observed in small business entrepreneurs that they tend to be smart and have a tendency to handle a lot of things by themselves. They can have “do it yourself” attitude, which is okay in the beginning stages in a small business venture, as they have more time than money.
However, when the business grows they need to have a quick transition as now this stage of their business won’t need the same attitude.
It is essential to surround yourself with a team of intelligent and honest people, who would give you ideas and stick by your side. For a large business, it is not possible for you to handle everything on your own.
- Have a Proper Business Structure
It is tempting to be a lone wolf when we imagine about planning a business structure, but it’s important to resist this temptation and seek proper advice regarding accounting and legal things. There are many instances with clients where they make improper assumptions or when they incorporate for invalid reasons.
The most common mistake that is seen is when the entrepreneurs attempt to look out for the out-of-state entity and not in their home state (where they live), just to avoid state tax. It’s only when they already made the mistake they realize that they will have to register as a foreign entity in their home state and pay double or they have to scratch of their previous entity which was out-of-state and form a new one where they live.
It is possible to save state tax if you get organize in different states provided the nature of their organization and business structure.
- Never Delay Tax Planning
It is another area where people often don’t understand it well, as most of them are new entrepreneurs. Proper tax planning and strategies to reduce tax in various cases can save a large amount for you, and thus can be a significant amount of potential savings in the long run.
It is crucial not to delay this tax planning because it is often seen that in many cases, as the year ends, there are very few options available to you. So, you should know your business entity structure, your compensation, retirement, and your fringe benefits when you’ll devise a tax strategy. You should also consider your anticipated brackets and tax bracket so that you can come up with a time plan for years that you want to maximize deduction v/s when you want to take greater income.
- Set an Accounting System
For having a great firm on your business finances it essential that you should have a good accounting system. Thus, it should be on top of your list. You can find a broad range of software and accounting system on the market. Now, the nature and size of your business will be a factor in deciding what kind of system is required by you. Here are the three types of an accounting system that is commonly used by small business entrepreneurs:
- Manual Paper-Based
- Manual Spreadsheet
- Software or Cloud-Based
- Build Trust and Add Value
For a moment don’t go after people’s wallet, now consider winning their hearts. For earning bucks, not just business strategies but trust also is needed which can be obtained by adding value to your relationship, with potential customers and existing ones as well. For this, you can start by providing them transparency, information, knowledge, treating them right, by being a good advisor, both before and after selling them your product. You should focus on creating a reputation in the market.
- Keep an Eye on Reviews
The way internet is playing a significant role in deciding your reputation cannot be ignored. It is recorded in online surveys that more than 90 percent of your potential customers are reading a review about your product or service online. And as much as 80 percent even trust it.
You should keep an eye on the reviews about your business, as it will be a factor whether you will gain a customer or not. If any customer is facing the problem and they put it on your website or the online e-mart, you should actively solve the problem (or get it solved). Your company should never at any cost ignore these reviews.
- Sharpen Your Skills in Business Development
You should as an entrepreneur hone your skills in this field. There are many convenient options available in the market today for new entrepreneurs to develop their abilities. For example, you can join online classes.
Remember, you have got a real competition in the market. That’s why you should start making yourself better at this every day.
- Don’t Procrastinate
This is one of the biggest issues that entrepreneurs face. Set a time to address the issues on the specified day of the week or a particular time. You should not let laziness win over you. It’s a myth that procrastinators are smart-ass because procrastination is just a demon that will eat your time and your money.
As an entrepreneur, you should be active, and able to take all of the responsibilities.
After reading this, I hope you understand what it is needed for running a business efficiently. As an entrepreneur grasp the knowledge and go ahead with your team. Don’t be scared to use new technology and have a good relationship with your customer. Designhill is an amazing place to learn new things.
We wish you all the best!