Is this your first time running your own small business? Then you may need a little help setting a financially sound course for you company. Don’t worry. If you exhibit any of these signs when dealing with finances, a financial adviser can help you.
Experiencing a Previous Bankruptcy
Having a bankruptcy on your record doesn’t mean you have poor money management skills. Life happens, and a bankruptcy can relate to many other factors, including huge medical bills, fraud perpetrated against you or your company, or some other type of event that put you in a bad place.
As you may be in the midst of dealing with a bankruptcy on your record, you need some financial guidance about handling money in a way that doesn’t put you at risk for any further difficulties and that helps you navigate any unforeseen financial setbacks.
Having Vague Knowledge About Financial Management
If no one ever taught you about money — how to save or make decisions, when to spend or invest your money — then you need to learn quickly so you can make the best choices that affect your business in a positive way. Having a basic working knowledge of money, saving, spending, and investing can increase your ability to make sound business decisions. Seek this financial guidance through books, websites, a financial advisor, seminars, and even college courses.
Not Being Familiar With Business Tax Guidelines
It’s okay, not many people are. This is entirely understandable given the fact that you previously had an employer who took care of tax deductions, income tax, and any other tax-related issues.
You want to make sure you do your taxes correctly to avoid fees, penalties, or an audit, so this is the time to learn about all the tax issues that impact you as a self-employed person. Look to the Canada Revenue Agency (CRA) small business center or an accountant who can help you understand and navigate this new tax framework. As a self-employed person, you handle all your taxes, including income tax, Canada Pension Plan (CPP) payments, and other completely foreign activities.
Not Understanding the Seasonality of Your Business
Every business experiences seasons during which there is more or less revenue, but if you’ve never been in the position of having to understand seasonal issues in your business, you may not realize how to plan for slowdowns. It’s a great idea to have a cash reserve during high times so that you can weather the slower periods.
Imagine you own a niche retail shop that sells bathing suits. You expect the bulk of your business to come during the spring and summer. While some people buy bathing suits for trips during colder months, you can expect business to slow down as the temperatures drop.
A financial advisor (like a CPA) can help you track and plan for this seasonality. They can then help you create a plan, including knowing when to make purchases and when to conserve resources.
Working Harder, Not Smarter
If you work all the time — and maybe work too much — you probably don’t have a long-term strategic financial plan. The idea plan allows you to work smarter, rather than longer, for the same amount of money.
It could be the type of clients you have, your pay rate, how you are billing or not billing, or your inability to save money. No matter the reason, getting assistance with these issues can help you know when it’s time to increase your rates or improve your payment terms. A guide can help you understand the importance of an emergency fund and gain the knowledge of how to evolve as a business to take on more projects with the assistance of more talent.
None of these signs that you need financial guidance should be taken to mean you can’t keep your business running. You can increase the likelihood of your success if you focus on having a good working knowledge of financial issues and getting advice when you need it. QuickBooks Self-Employed app helps you as a freelancer, contractor, or sole proprietor track and manage your business on the go. Download the app.