January is a great time for small business owners to get organized financially. From reviewing business expenses, to managing cash flow and revising business plans, every business owner can benefit from a financial refresh. Here are three financial tips to help you ring in a fiscally-sound 2018:
PLAN AHEAD FOR TAXES
As a small business owner, keeping business checking and credit accounts separate from your personal accounts can help you track and record all business-related income and expenses. Most small businesses are required to file estimated taxes on a quarterly basis. To help your business plan accordingly, establish a separate bank account dedicated to your business taxes and set aside a monthly amount so you are ready when tax payments are due.
Consult with a tax specialist to be sure you are properly tracking and recording your earnings and deductions, and help you calculate your estimated tax obligations.
MAINTAIN CASH FLOW
To keep your business running smoothly, you need both profits and a healthy cash flow. Oftentimes, a business may be profitable, but the profits may be stuck in accounts receivable. To plan for potential gaps and cash flow challenges, you may want to consider a business line of credit. Schedule time to meet with a financial advisor and/or banker for a full financial review that includes an assessment of your credit needs, and have them to walk you through the available options.
REVIEW YOUR BUSINESS PLAN
Every small business should have a formal written business plan to help with business decisions and strategic planning. If you have one already, now is the time to do a full review and consider updates to reflect your current business needs and goals. If you don’t have one, set aside time to draft this important document. An effective plan can help you prioritize how to spend your time and money, and sets measurable goals. It also can help identify current or future obstacles, so you can better anticipate and avoid potential risks. In addition, having an updated business plan may help you obtain business financing because many lenders require a formal business plan before extending credit.
Taking the time at the start of each year to update your business plan, evaluate your cash flow management and organize your finances, will help ready your small business to grow and succeed.
For help getting your business plan in shape for the New Year, contact the Economic Development Collaborative-Ventura County. Conveniently located in Camarillo, California, we’re here to help.