Tag: at-home-business

Sole Trader Savings: Managing Money As A Home Business

Managing your home business efficiently is crucial in ensuring the success of your business going forward. For many small business owners, managing the finances of the business is an ongoing challenge but with the right approach to financial management, you can take control of your business so that you can reach your goals.

 

For your business to gain a solid financial footing, you need to ensure that you have enough cash flow available to manage the day-to-day needs of your business. Mismanaging your finances can be detrimental to the future success of your business. To stay on track towards your business goals and to give your business every chance of outperforming the competition, you need to learn how to manage your business finances properly.

 

Let’s take a look at some useful tips to help you to manage your home business finances more effectively.

 

Create A Emergency Fund

As a business owner, you need to remain flexible and be able to adapt to changes in the marketplace. Customer trends, dips in the market, natural disasters and other unforeseen events can wreak havoc on your business if you are not prepared. Having an emergency fund in place to help you to get through those difficult times will help your business to survive and emerge stronger during unexpected downturns. Use an online savings account to manage your contingency fund to earn interest on your emergency savings and enjoy even more peace of mind, knowing you are covered should the worst happen.

 

Track Your Spending

Many home business owners fail to monitor their spending correctly, which can quickly lead to overspending. Nowadays, there is a range of business tools, software packages and online platforms that can help you to monitor your spending so you always know where you stand. Tracking your expenses will allow you to plan for the future with more certainty and make better decisions for your business going forward.

 

Invoice Management

Invoicing may not be the most glamorous aspect of running a home business but it is essential in keeping your finances in check. Put systems in place to help you to manage your invoicing more efficiently to ensure that you are paid on time and you don’t miss any payments from your clients. Sending out invoices in a timely manner and following up regarding payments will help to ensure that you always have enough cash flow available day-to-day.

 

Negotiate With Suppliers

To keep your business costs to a minimum, it’s important to reassess the agreements you have in place with your partners, suppliers and vendors. You need to ensure that you are getting the best deal possible so that you can deliver the best possible product or service to your clients at the most competitive price. Negotiate a deal with your suppliers that will benefit your business and help you to save money, without affecting the quality of your product or service. Remember to weight up cost, quality and quantity to find a deal that offers you the best overall value and not simply the lowest price.

 

Keep Meticulous Records

Keeping accurate financial records is essential in managing your business finances effectively. Having access to up-to-date, precise financial data will allow you to plan for the financial needs of your business moving forward. You will also be able to identify areas of your business that need investment and those areas where you might be overspending. Proper record-keeping is also important when it comes to submitting your financial reports to the ATO at the end of the financial year, helping to ensure that the process is as smooth as possible and that your business is tax-compliant.

 

Manage Your Home Business Finances With Confidence

To ensure that your business continues to thrive moving forward, you need to ensure that you put steps in place to help you manage your finances properly. Taking the right approach to managing your small business finances will allow you to plan for the future needs of your business with more confidence, accurately assess the financial performance of your company and allow you to work towards your financial goals with more certainty.

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8 Things You Need to Know Before Starting a Business From Your Garage

Maybe you lost your job in the pandemic, or perhaps all the uncertainty made you think, “I wouldn’t have to worry about being let go if I ran the company.” Whatever your reasons, you’ve decided to start a business from home.

If you intend to start a business from your garage, follow best practices to create a comfortable, ergonomic environment where you can fully engage and focus. You’ll also navigate a sea of legal requirements and decisions, and tweak your methods to reach ultimate success. 

Here are eight considerations to keep in mind while building your business.

1. Ergonomics

How comfortable do you feel at your desk? If your response is, “not very,” guess what? You won’t feel motivated to do the work it takes to build a successful company if your workspace gives you backaches and migraines.

If your spine screams for help after 30 minutes of sitting, consider a variable-height desk. 

One 2016 study by Texas A&M University shows that such models increase productivity by as much as 50%. You can invest in blue-light-cutting glasses or switch your devices to twilight mode to prevent this wavelength from triggering head pain and nausea.

2. Climate Control

Part of your complete comfort involves temperature. If you’re working out of a garage, you need climate control.

You can extend the HVAC from your principal residence, although doing so can cost a pretty penny. 

Using a window air conditioner is a less expensive option, and it can also be the most effective method, too. As a bonus, you’ll run your central air less often because you won’t leak heat whenever you open the door leading to your home.

3. Creating a Business Plan

Have you heard the old saying about failing to plan? You need a roadmap to success, and a solid business plan is the best way to chart your course and win investors’ trust.

If you’ve never written one before, have no worries. You can download a free template online and fill in the blanks. Once you write your plan, allow a family member or friend — or, better yet, a trusted mentor — to read and identify any potential blind spots. If you feel that starting from scratch isn’t the right path for you, you could consider investing in a franchise instead. This way, you can rely on the franchisor’s expertise and know-how, and you’ll also be able to achieve a work-life balance by doing what you truly love. For example, if you love dogs, you could start a dog training business. Working from home requires minimal capital, and your setup doesn’t have to be anything fancy either, as you never meet with clients in your home setting. 

4. Obtaining Appropriate Licenses

While you don’t need to reserve a doing-business-as, or DBA, it’s wise to do so for your company. This registration often costs less than $50, and it protects you from competitors using your business name — with sometimes disastrous results.

You may need profession-specific licensure as well. If you hope to sell health insurance, you’ll need to get licensed for health, accident and life insurance. If you want to run a margarita truck, you’ll require a liquor license.

5. Selecting Your Corporate Structure

You can hang out a shingle and begin doing work as a sole proprietor. However, if someone sues you, you could lose your family home — this business structure does not limit liability to professional resources.

You can form a single-member LLC to separate business and personal assets in the event of a lawsuit. This structure has the advantage of letting you add more members later — they will share in the protection.

6. Planning for Tax Time

When you work for an employer, your HR department takes care of withholding your Social Security, Medicare and income taxes. However, when you work for yourself, you earn a second job title as an accountant.

Invest in a software program like QuickBooks Self-Employed to keep accurate records of income and expenses. Since the U.S. has a pay-as-you-go income-tax system, you’ll need this data to file your quarterlies and your end-of-year return.

7. Building Your Client Base

What kind of customers do you hope to serve? If you responded, “the kind who pay me,” how will you target those individuals?

Here’s where you have to get creative. If you have a service-oriented industry like carpet cleaning, you can do door-to-door flyers relatively inexpensively. You can also approach other local business owners to inquire about their needs. If you intend to walk dogs for a living, advertise someplace pet people frequent — like bulletin boards at Humane Societies and dog parks.

8. Evaluating Your Strategy and Planning for Growth

Once you finish your first quarter, take time to reflect on your successes and pitfalls. What went well, and what fell flat? Resist the urge to dwell on failures. Instead, think of them as detour signs on the highway to success. They offer valuable insight as to when you need to change direction.

Start a Successful Business From Your Garage With the Right Know-How and Tips

In today’s economy, it pays to work for yourself. If you want to start a successful business from your garage, use the tips above to build your destiny.

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