The Costs Of Running A Trade Business

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StrategyDriven Managing Your Finances Article | The Costs Of Running A Trade Business

Thinking of starting a business as a tradesperson? Trade businesses include the likes of plumbing, electrics, roofing, tiling, landscaping and window cleaning. They can be a popular business venture for those that have the skills – and they can be relatively inexpensive to start up compared to many other types of business. However, there are still costs that need to be budgeted for if you’re going to start a trade business. Below are some of the costs to consider when running a trade business.

Tools

Perhaps the most important cost to consider is acquiring tools. Pretty much every trade from pest control to tree surgery requires tools. Certain trades are likely to require more expensive tools than others – for example, a decent piano tuning kit can be bought for less than $20, while a decent commercial carpet cleaning machine will cost over $1000 to buy.

Buying used tools could be a way to save money. When it comes to specialist tools that you may only need for one-off jobs, it may make more financial sense to hire them. You can also lease tools, which can be cheaper upfront than buying, but potentially more expensive in the long run.

To work out exactly how much you need to spend on tools, make a list of all the tools you need. Then compare prices online to work out exactly how much all of these tools will cost. If you need to take out a loan, this will help you to know exactly how much to borrow.

Supplies/parts

On top of your tools, there will be ongoing supplies or parts that you’ll need to buy. These will likely vary from job to job and are something you should factor in when it comes to quoting a price.

The internet is one of the best places to look for niche supplies like boiler auxiliary equipment or pressure washing chemicals. More general supplies and parts may be possible to buy from a local store, although you may still find that you access greater discounts online. Some suppliers may even be able to offer loyalty discounts or bulk discounts for supplies and could be worth sticking with.

Travel

You also need to consider the cost of travelling to your clients. This will typically involve owning or leasing a vehicle. Some tradespeople simply use their personal vehicle. However, if your personal vehicle is too small for your tools or not business appropriate, you may have to consider acquiring a new vehicle (a separate vehicle could also give you the option to invest in branded vinyl wrapping).

Each job you do will cost you money in fuel, which is also important to budget for. Many trade companies will only serve customers in a certain area so as not to spend too much time or money travelling to clients. Of course, if your trade is very niche, you may have no option but to cover a larger area in order to source enough customers.

Licensing/certification

Some trades do not require you to have any licensing or certification. In other cases, licensing or certification may be compulsory. It’s worth looking into the regulations of your state to see what the case is.

Most companies need a business license, which can cost between $50 and $550 depending on the state and profession. Certification fees are likely to vary depending on where you obtain them from – in some cases, there may be multiple certification courses that you can take. Some may also have to be regularly renewed, which is something to budget into your running costs.


Insurance

In many cases, it is not mandatory to take out insurance as a tradesperson. An exception is if you hire employees, in which case you are obliged to take out worker’s compensation. You will also need auto insurance for your commercial vehicle.

Other types of insurance may be highly recommended depending on the trade. Public liability insurance is something that most trade businesses should consider taking out. This insurance scheme can help to pay out compensation if a member of the public is injured or their property is damaged as a result of your work. You could also consider insuring your tools against damage and loss.

It is worth taking the time to shop around for insurance as it could save you a lot of money. Some insurers may offer specialist policies catered to the risks of your specific trade. There are also trade business insurance packages that you can take out that combine multiple policies for a discounted price.

Marketing

Marketing is essential for attracting business. You will need to invest some money regularly into marketing if you want to generate customers and grow.

A website is the most basic marketing necessity. You can build a website yourself, or hire someone to build it for you. A DIY website is the cheapest option – nowadays there are drag-and-drop website builders you can use that don’t require any programming knowledge.

There are so many other types of marketing that you can spend money on including social media marketing, SEO, PPC ads, business cards and flyers. It’s worth experimenting with different forms of marketing to see what works. You can hire marketing agencies to help handle marketing for you – in such cases, make sure to shop around to get the best rates.

Tax

Every business has to pay tax on its earnings. You will need to file a tax return each year, which will need to be accurately calculated. You can do this yourself or you can hire an accountant (the latter can save you a lot of time and hassle, but is an extra expense to budget for). At the very least, you should try to invest in accounting software to help make bookkeeping easier.

A benefit of being self-employed is that you get to claim expenses, which can result in tax reductions. This includes all the costs listed above. This is why it’s important to record every expense, so that you can accurately deduct the necessary amount of tax each year.

Personal Sacrifice: Financial Decisions for Entrepreneurs

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Entrepreneurs are often lauded for their innovative ideas and risk-taking spirit, but the importance of financial management for entrepreneurs is often overlooked. Financial stability is essential for those without a safety net, which can be the difference between success and failure.

Several statistics underscore the importance of financial management for entrepreneurs. For example, according to a study by The National Small Business Association, 60% of small businesses fail due to economic reasons. Furthermore, a survey by Forbes found that 78% of failed startups cite financial instability as the main reason for their failure.

Financial stability is crucial for entrepreneurs. There are several things that entrepreneurs can do to improve their financial footing, such as creating a budget, tracking expenses, and maintaining a healthy cash flow. By taking these steps, entrepreneurs can improve their chances of success and avoid costly mistakes.

However, there is no denying that entrepreneurs must make a few sacrifices to achieve financial stability. There will be times when you have to put your business interests ahead of your personal ones. Here are a few financial sacrifices that entrepreneurs have to make.

Social Activities

Social life is one of the first things entrepreneurs have to give up. With all the time and effort required to get a business off the ground, there is simply no time for socializing. Moreover, you might be spending a lot of money on those social activities, making it more challenging to improve financial management.

It doesn’t mean you must become a hermit; you can still find time for your friends and family. However, you will have to cut back on activities that take up a lot of time, such as going out to bars or clubs, attending parties, or taking vacations.

In addition, you may have to spend less time with your loved ones while working on your business. This sacrifice is not easy, but it’s important to remember that your business is your priority. Your family and friends will understand if you cannot spend as much time with them.

Luxury Items

Another thing that entrepreneurs have to give up is luxury items. When starting, it’s important to focus on the essentials and forego unnecessary purchases. You might give up your expensive car, designer clothes, and other luxury items.

It cannot be easy to let go of these things, but it’s important to remember that your business comes first. Luxury items are a waste of money when trying to improve financial management.

Moreover, luxury items can make it difficult for you to relate to your target market. If you’re trying to sell a product or service to middle-class consumers, they’re unlikely to relate to you if you’re driving a Bentley. Luxury items can also make connecting with potential partners and investors difficult.

While you don’t have to give up all your luxury items, it’s important to be mindful of your purchases. Ask yourself if an item is essential or if you can live without it.

Mortgage or Rent

Another financial sacrifice entrepreneurs make is giving up their mortgage or rent. This can be difficult, but freeing up money for your business is often necessary. Homeownership means going into debt, which can be a challenging situation for entrepreneurs.

Giving up your home can be a considerable risk, but it’s one that you may have to take if you want your business to succeed. If you’re not ready to give up your home, consider renting it out and living elsewhere.

Fortunately, you can also partner with a company that assists in home mortgage for entrepreneurs. This service can help you save money to invest in your business. If you cannot afford monthly home ownership and rent payments, you can stay with family or friends until your company is more established.


Retirement Savings

One of the entrepreneurs’ most prominent financial sacrifices is giving up their retirement savings. This is a difficult decision, but getting your business off the ground is often necessary.

Retirement savings are significant but are not as important as your business. Do it if you need to use your retirement savings to finance your business.

Of course, this doesn’t mean you should empty your retirement account. You should only use what you need and make sure you have a solid plan to replenish your savings once your business succeeds.

The Bottom Line

Financial stability is essential for entrepreneurs. There are several things that entrepreneurs can do to improve their financial footing, such as creating a budget, tracking expenses, and maintaining a healthy cash flow. However, there is no denying that entrepreneurs must make a few sacrifices to achieve financial stability. There will be times when you have to put your business interests ahead of your personal ones. By taking these steps, entrepreneurs can improve their chances of success and avoid costly mistakes.

Tax Compliance For Small Businesses: A Complete Guide

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StrategyDriven Managing Your Finances Article | Tax Compliance For Small Businesses: A Complete GuideAs a small business owner, filing taxes for the business can be stressful. One of the things you might notice is that the types of taxes you’ll be filing for the business are different from personal taxes and a little bit more complex. The taxes you’re required to file for your business will depend on the tax laws in your country or region. For instance, you’ll be expected to file income tax, estimated quarterly taxes, and self-employment taxes in some countries.

Additionally, you should hire a professional to guide and help you file taxes for your small business. A professional will also help you understand the kind of taxes you’ll be filing and their implications on your business. Furthermore, failure to file and pay taxes on time can be severely detrimental to your business because you’ll be fined and subject to interest on the amount due. If you have no idea where to start with filing taxes for your small business, here is a complete guide:

1. Understand Your Tax Obligations

As mentioned earlier, there are several types of taxes, and you must understand the ones your business needs to comply with. If you know the tax system well, evaluate and organize all your tax obligations to ascertain you’ll get dividends, if there are any. You’ll also have to ensure you’re up-to-date with changes in tax regulations to ensure compliance.

However, suppose you find the tax system complicated, you can hire a reputable accountant or a tax filing company such as Swyft filings registered agent service to handle the entire process.

Subsequently, you can start by looking into the basic tax forms, which differ depending on the business bracket. When filling out the tax forms, you can decide to consolidate both the business and personal obligations, especially in income tax returns. Another item you might want to consider is creating estimated tax returns where you can specify the amount and the deadline for payments.

In addition, you can check and inquire whether your business has extensions that should be handled within the prescribed time. You can request an extension for the business when there’s a need for extra time to meet legal obligations. Despite being granted an extension, you’ll have to calculate the amount owed in taxes and ascertain it’s paid before the due date.

2. Create A Personalized Tax Calendar

Keeping track of all your business tax obligations can take a toll on you, and an electronic calendar would be helpful. Start by creating a digital calendar detailing the taxes that must be filed, the amount, and deadlines. Another benefit of creating a digital calendar is that it’ll also serve as a reminder. You can also include notes on tax reports and hardcopy documents on the calendar.

Besides, you should ensure you’re using a secure application or software for the calendar. Since you’ll note important business information on the digital calendar, you must ensure it’s safe. Any form of illegal access or breach into the digital calendar can expose crucial business details. Nonetheless, a tax calendar will help you stay organized and have a one-stop shop for all business information.

StrategyDriven Managing Your Finances Article | Tax Compliance For Small Businesses: A Complete Guide3. Consider Tax Deductions

As a business owner, it’s essential to constantly look for ways to save money and boost profits. While it might sound odd, you can save money on tax deductions offered to small businesses. Some of the deductions that might be available to you are business expenses such as payment of salaries, insurance, and start-up expenses. Another area you might consider when claiming a business deduction is a home office deduction if you’re running the business from home.

In addition, you must learn what the laws on tax deductions provide and how they’ll benefit your business. For illustration, regulations such as the Qualified Business Income Tax Deduction give room for up to 20% deductions on the total income of a business. Though you’re entitled to tax deductions for your business, you must be qualified. You can check the tax regulatory bodies for qualifications for tax deductions in small businesses.

Moreover, if you’re wondering what deductions you can claim for your business, start by checking tax regulations. However, if you’ve sought the services of an accountant or a tax agent, they can advise on the tax deductions you can claim.

4. Ensure Accurate Calculation Of Taxes

Your small business must always file accurate taxes. Once you’ve collected all the information on the types of taxes, you’ll be filing and the possible deductions, you can start calculating taxes. When calculating taxes, ensure you comply with the legal structure to avoid issues with the tax regulatory body. In addition, use receipts and invoices to correctly identify income and expenditure in the business.

Once you’ve tallied the total revenue and expenses, you can determine the deductions your business qualifies for. The calculations will help determine how much tax your small business should pay. When done, file the tax forms with the tax regulatory body accompanied by payments of the amounts due. Nevertheless, if the math becomes overwhelming, seek the help of a professional.

5. Make All The Tax Documentation Accessible

Once you’ve gathered all your documents, including receipts, ensure they’re accessible to authorized personnel. The papers are proof of tax compliance and should be accessible to your business partners or anyone else that might need them. While it’s easy to keep a digital record of all documents, hardcopy documents can be saved as a backup. You can keep the documents in a lockable drawer for safety.

Besides, if there’s an issue with the tax process, the documents can be used to countercheck accounting details. Further, you can label the documents using tags to differentiate documents and the consequent return periods.


6. Create A System

Filing business taxes can be tedious, but creating a functional system can make it easy. You can start creating a system by organizing your documentation and taking the time to comprehend your tax obligations. While it might take a lot of time and energy to establish a sustainable approach, the benefits to your business would be tremendous.

Nevertheless, you must ensure your system gets updated whenever your business has new tax obligations. You’ll have to regularly revisit the process to ascertain it’s still meeting the business needs. Eventually, you’ll spend less time and resources on tax compliance for your business.

Conclusion

Ensuring your small business is tax compliant can be complex and stressful. Despite the difficult and tedious process, you must ensure your business files the appropriate tax documents on time to avoid being penalized. You can make the taxation process for your business easy by creating a system that works for you. Feel free to consult a professional if you’re not confident about the taxes you’re supposed to file for your business.

Benefits of outsourcing your accounting and bookkeeping services

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StrategyDriven Managing Your Finances Article |Outsourcing accounting and bookkeeping|Benefits of outsourcing your accounting and bookkeeping servicesThe world has become a global village, and businesses must operate in a competitive market. And this has led to enterprises needing ways to reduce their costs while maintaining a high-quality level. One way of doing this is by outsourcing their accounting and bookkeeping services.

According to a report by Forbes, “Outsourcing can help businesses reduce costs by up to 30%.”

There are many benefits of outsourcing your accounting and bookkeeping services. Here are just a few:

1. Cost savings:

As mentioned above, cost savings is one of the main benefits of outsourcing your accounting and bookkeeping services. When you outsource these services, you will no longer need to hire full-time employees to do the work. It can lead to significant cost savings for your business. You can find many reputable and affordable accounting and bookkeeping services online. You can search with the city or state name and “accounting firms” to get started or look for national firms that operate in your area.

Many leading firms in California are prominent for their cost-effective services. However, it would help if you were careful when selecting a firm. Check the reviews of the firm and its services before hiring them. Luckily the Sacramento accounting firm Busy Bee Advisors provides a hassle-free and cost-effective solution for any business. With the recent surge in demand by startups in California, it has become one of the most sought-after firms in the state.

2. Improved quality:

Quality is always a concern when businesses outsource their services. However, when you outsource your accounting and bookkeeping services to a reputable firm, you can be assured of receiving high-quality services. The firm will have a team of experienced professionals who can provide you with accurate and up-to-date financial reports. And it will help you make better decisions for your business.

But how is this different from in-house accounting? Anyone can do in-house accounting with some basic training. However, it is unlikely that they will have the same level of expertise as someone who has worked in the field for many years. It is important to outsource your accounting and bookkeeping services to experienced professionals. However, this does not mean that you should not monitor the progress. You should still review the reports and statements before making any decisions.

3. Save time:

Another benefit of outsourcing your accounting and bookkeeping services is that it will help you to save time. It is because you will no longer need to spend time training employees or doing the work yourself. You can use this time to focus on other aspects of your business. It will help you to grow your business and achieve your goals. In fact, according to a study, companies that outsource can grow faster than those that don’t. And the reason for this is simple: businesses that outsource these services have more time to focus on their core competencies.

4. Focus on your core competencies:

As mentioned above, when you outsource your accounting and bookkeeping services, you will have more time to focus on your core competencies. It is because you will no longer need to spend time on activities unrelated to your business. For example, if you are a marketing company, you will no longer need to spend time on accounting and bookkeeping. You can use this time to focus on marketing activities that will help you to grow your business. It will help you to achieve a competitive advantage in the market. Also, you can focus on your customers by outsourcing your accounting and bookkeeping services. It is because you will no longer need to worry about financial reports and statements.


5. Access to the latest technology:

According to a study by the International Data Corporation, the global accounting and bookkeeping software market by the year 2025 will reach $11.3 billion. It is because more and more businesses are adopting cloud-based accounting and bookkeeping software. This software offers many benefits, such as real-time reporting, improved security, and scalability. When you outsource your accounting and bookkeeping services, you will be able to get access to the latest technology. It will help you to improve your business processes and make better decisions.

6. Increased flexibility:

The more you grow your business, the more you will need to scale up your accounting and bookkeeping services. It is because your business will generate more transactions and data. When you outsource your accounting and bookkeeping services, you can scale up or down as needed. It is because you will only be paying for your required services. It will help you to save money and be more flexible in your business operations. In addition, you can also choose to outsource only certain aspects of your accounting and bookkeeping services. For example, you can outsource your payroll services but keep your accounts receivable and accounts payable in-house. It will help you to save money and be more efficient in your business operations. You might also try accounting automation.

7. Improved cash flow:

As the saying goes, “Cash is king.” It is especially true in businesses. You can improve your cash flow when outsourcing your accounting and bookkeeping services. It is because you will have more time to focus on activities that will generate revenue for your business. Also, you can save money on your accounting and bookkeeping services. It is because you can get discounts from your service provider. In addition, you can also improve your cash flow by delaying payments to your service provider. It is because you will have more time to generate revenue and pay your service provider. However, you should only do this if you are confident that you can generate the revenue to pay your service provider.

Conclusion

The way you manage your finances can make or break your business. It is why it’s essential to have a good accounting and bookkeeping system in place. However, you can always outsource your accounting and bookkeeping services if you lack time or resources. Outsourcing these services can offer many benefits, such as improved efficiency, flexibility, and cash flow. Now that you know the benefits of outsourcing your accounting and bookkeeping services, you can decide if this is the right solution for your business.

Ways Financial Experts Can Assist Small Business Owners

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StrategyDriven Managing Your Finances Article |Financial Experts|Ways Financial Experts Can Assist Small Business OwnersBusinesses need money to function and grow. But not all business owners have the financial expertise to make sound decisions about allocating their resources. And this is where financial experts can step in and help.

Financial experts can provide small business owners with the guidance they need to make intelligent decisions about their money. They can help them develop a budget, track expenses, and make sound investments. Financial experts can also offer advice on how to raise capital and negotiate loans.

In addition to providing financial advice, financial experts can also help small business owners keep their books in order. They can prepare financial statements, reconcile accounts, and handle payroll. Read on to explore the ways financial experts can assist small business owners.

1. They can help you develop a budget

One of the most important things a financial expert can do for a small business owner helps them develop a budget. A budget provides a roadmap for where your money should go and how much you can afford to spend in each area. Without a budget, it’s easy to overspend and jeopardize your business financially.

A financial expert can help you create a budget that makes sense for your business. They can help you track your income and expenses and identify areas where you may be able to cut costs. A budget can also help you plan for future expenses, such as hiring new employees or expanding your operations.

You can also hire professional services to help you with this task. But make sure the service provider has a CPA license and certification to offer these services. It will ensure you’re getting quality advice from someone who knows what they’re doing.

2. They can help you track your expenses

In addition to helping you develop a budget, a financial expert can also help you track your expenses. It is essential because it allows you to see where your money is going and identify areas where you may be able to save.

Tracking your expenses can be done manually or with the help of accounting software. If you do it manually, keep receipts and documentation for all your business expenses. This will make tracking your spending easier and identify patterns over time.

If you use accounting software, many expense tracking features can make your life easier. For example, you can set up alerts to notify you when you’re approaching your budget limits. You can also track your spending by category, which can help identify areas where you may be able to save.

3. They can help you make sound investments

Another way financial experts can assist small business owners is by helping them make sound investments. This may include investing in new equipment, real estate, or other assets.

Investing can be a great way to grow your business. But it’s important to do your homework and understand the risks involved. A financial expert can help you assess different investment opportunities, risks, and potential rewards. They can also offer advice on diversifying your investments and protecting your capital.

4. They can help you raise capital

If you need money to grow your business, a financial expert can help you raise capital. There are many ways to do this, such as taking out loans, selling equity in your business, or issuing bonds.

Raising capital can be a complex and time-consuming process. A financial expert can help you navigate the different options and find the best solution for your business. They can also offer advice on structuring loans and other financing arrangements.

5. They can help you negotiate loans

If you need to borrow money to finance your business, a financial expert can help you negotiate loans. They can help you get the best terms possible and find lenders willing to work with you.

Negotiating is considered an essential skill when it comes to business. But it can be challenging to do if you don’t have experience. A financial expert can help you understand the process and the tools you need to succeed.


6. They can help you manage your taxes

Another way financial experts can assist small business owners is by helping them manage their taxes. This includes preparing and filing tax returns, making estimated tax payments, and resolving tax debts.

Taxes can be complex and confusing. But a financial expert can help you understand the process and comply with the law. They can also offer advice on how to minimize your tax liability.

7. They can help you plan for retirement

If you’re a small business owner, you may not have time to consider retirement. But it’s essential to start planning for it early. A financial expert can help you understand the different retirement options and choose the best one for your business. They can also offer advice on saving for retirement and ensuring you have enough money to cover your costs.

If you’re looking for ways to improve your financial situation, consider working with one. Financial experts can offer a lot of valuable assistance to small business owners. They can help you make sound decisions and achieve your financial goals.

8. They can offer advice on financial planning

If you want to get your finances in order, a financial expert can offer advice on financial planning. They can help you create a budget, set financial goals, and develop a plan to achieve them. They can also advise regarding investment, retirement savings, and tax management.

Not all financial advice is created equal. Make sure you work with a qualified financial expert to give you the guidance you need.

9. They can offer advice on estate planning

If you’re a small business owner, you may not have time to consider estate planning. But it’s essential to start planning for it early. A financial expert can help you understand the different options and choose the best one for your business. They can also offer advice on how to transfer ownership of your business, create a will, and plan for your family’s future.

A financial expert can help you understand the different options and choose the best one for your business. They can also offer advice on how to implement your plan and ensure it’s successful.

10. They can help you find sources of funding

A financial expert can help you find funding sources if you need money to grow your business. There are many options available, such as loans, grants, and investment capital. A financial expert can help you understand the different options and choose the best one for your business. They can also offer advice on approaching potential investors and getting the funding you need.

If you’re looking for ways to improve your financial situation, consider working with one. Financial experts can offer a lot of valuable assistance to small business owners. They can help you make sound decisions and achieve your financial goals.

Conclusion

In a nutshell, financial experts offer a lot of valuable services to small business owners. They can help you understand the different options and choose the best one for your business. They can also offer advice on managing your finances, saving for retirement, and finding funding sources. If you’re looking for ways to improve your financial situation, consider working with a financial expert. They can help you make sound decisions and achieve your financial goals.