What Worries Small Business Owners
How can Small Business Owners Ease Anxiety?
Running a small business can feel like walking across a tightrope with no safety net. According to the latest Small Business Owners Growth Index released by Capital One, the three things that worry small business owners – in order from least to most — are technology, cash flow, and taxes. Fortunately, entrepreneurs can take steps to reduce business-related stress and get some well-deserved shuteye.
Technology:
With the advent of new business technologies like artificial intelligence, chatbots, and voice-activated assistants, keeping pace is impossible. To ease these fears, find a trustworthy industry publication that covers technology in your industry. Your business will only need to adopt some new, hot technology trends, but at least you will know what tools are available to you and your competition. If you oppose technology or need more time to evaluate your systems fairly, consider hiring an IT consultant for professional guidance.
Cash Flow:
Check your cash flow at least weekly, if not daily, to minimize cash flow-related worries. Try to accelerate customer payments, especially slow-paying ones. To keep even more cash on hand, offer a slight discount to customers for early payment and delay paying business payables until the last possible moment before the penalty.
Taxes:
The complexity of Taxes and the IRS’s iron fist can strike fear into the hearts of any small business owner. Check out the tips below to save yourself on taxes and worry:
1. Implement a sound bookkeeping system. Not only will you save money from an operational standpoint, as you will be better able to track your cash flow and earnings, but you will stay in compliance with the IRS should they decide to audit you. Good records can save a lot of headaches when ordered to prove your tax positions to the authorities.
2. Do not comingle business and personal funds. Open two checking accounts, and do not charge personal expenses on your business debit or credit card. This will dramatically simplify your life come tax time and give you confidence in the event of an audit. There is less temptation to comingle funds when you learn how to properly pay yourself from the business as a W-2 employee or through an owner distribution.
3. To avoid double taxation, consider forming an S corporation. Elect to structure your business as an S Corp before the last day of the year, and you will be relieved of paying the 15.3% Social Security or self-employment tax on any owner income distributions. Keep in mind that you will still pay these taxes on employee wages, but it is still preferable to pay them to a C corporation where these taxes are due at the corporate and personal levels. However, the election is not one size fits all. A C corporation may be a better fit if you need to raise funds or use specific tax-free employee fringe benefits.
4. Learn the applicable tax credits and deductions. Who wouldn’t want a dollar-for-dollar reduction in their tax burden from the Employer-Provided Child Care Credit to the Qualified Research Expense Credit to the Alternative Motor Vehicle Credit? Try to do this research early in the year so you still have time to strategize and get as many credits as possible. Lowering your taxable income with deductions should be a priority as well. Feel free to use tax strategies to reduce your taxes owed; there are many ways to do so legally. If reading the tax code makes you cringe, consider enlisting the help of a CPA.
Book a growth strategy call today with the team at Corbec Media today and allow us to help you grow your business.
