I spend every day writing on the subject of personal finance. So it’s rare that I get to discuss straight-up business tips. But because of the growth of this once little known blog, I’m now running my own legitimate small business. Below I present some tips I’ve picked up along the way. It’s by no means a complete guide, but if you’re just getting started with your business, hopefully these tips can prove useful on your entrepreneurial journey.
Keep Your Finances Separate
One of the most annoying aspects of your first tax return will be dividing up your personal and business expenses. I highly encourage you to skip this headache and start from day one with a separate business checking and savings account for your new small business. Make sure you get online access so you’re able to export your spending data right into your accounting software.
For more supported software you can go with professional products like QuickBooks from Intuit (the makers of Turbo tax). You might also consider a small business credit card so that you can float your expenses for a month and earn cash back rewards at the same time. Just make sure you aren’t using the card to stretch your business beyond its means.
Know When to Spend
Some small businesses need a good bit of investment upfront. But don’t spend money where it’s not necessary. When it comes to outfitting your business, make sure you have the necessities, but skip the luxuries. Do you really need that $700 office chair before you’ve even made your first sale?
At the same time, don’t let your cheap-ness hold you back. Know when it’s time to spend on the things that will help your business grow. A good example is hosting space for an online business. For far too long I ran my blog on shared hosting space. Once I finally paid to have my own space, my site saw instant improvement in performance and traffic.
Don’t Be Afraid of Outsourcing
Along those same lines, know when you need to bring in someone else to help you with your business. Design your workload around the aspects of your business that you enjoy and that you’re good at. Don’t waste too much time trying to master everything about your business. Pay a professional to do it quickly and correctly the first time.
When you’re just starting out it’s okay to do most everything yourself. But again, once you start producing a profit, reinvest those dollars with people who will help your business grow quickly.
Just Start. Perfect Later
I’ve changed the concept and goal of my business several times along the way. Had I waited until I had everything perfect before I got started, I wouldn’t be where I am today. Focus on consistent action, not perfection, with your small business. I’m not saying you shouldn’t have a good plan. Just don’t let the desire for perfection stall you out. The people who take action everyday are the people who eventually find the right path for their business and see real success.
Look for a Mentor
One final tip that I have is to find someone who is willing to give you a little advice to give your business the head start that it needs. Success usually doesn’t exist in a vacuum. Look for someone in your industry that has proven themselves and is seeing success. Bribe them with a free lunch and pick their brains about their business. Most people love talking about themselves and their successes despite their competitiveness.
After a few meetings, you’ll have the blueprint to success, and someone besides your spouse to bother with the details of your business. If you’re having trouble finding someone, you can always visit your local Small Business Association and sign up with their free local consulting services.
If you run a small business, what are some of your best tips for beginners?
1 thought on “5 Insider Tips for Starting a Small Business”
I agree with all the tips above, can would like to add a few more points:
1. While free accounting software is great it is worth paying a bit extra for professional software which has more features and support for a growing business. But you should definitely keep your business and personal finances separate.
2. Consider incorporate (S-corp) if your monthly income > 1000 from business. The tax deductions make the overhead worth it.
3. Also keep investing in yourself (training, conferences etc) to keep your skills sharp and network. Best of all, these are tax deductible.
4. Mentoring is great, but pick someone who is not trying to sell you something or a get rich product.
5. Outsourcing and freelancing is great. But it will take some time to find the right working relationship. Also be very clear about what you are outsourcing – communication is key!