Small Business Owners Plant the Seeds for Success
4 Tips for Early Stage Entrepreneurs
by Marilyn Miller
Are you thinking of launching your own business? So much of your future success will depend on how you begin. The decisions we make as early stage entrepreneurs will drive the direction of our businesses. I sat down with a local financial planner and asked his thoughts on the types of things entrepreneurs must do at the start of early stages of their business.
Your first step should be a meeting with a business attorney to determine what sort of business structure provides the best legal protection and most favorable tax treatment. A sole proprietorship will give you a great deal of control and is easy to manage, but involves you personally taking on the financial obligations of the business. An “S-Corporation” (closely held small business entity), Partnership or Limited Liability Company (LLC) can shield you personally and offer tax incentives but come with requirements such as minimum threshold assets and requirements that can become unwieldy. You can revisit and change as you grow, but do not make the mistake of starting a business without advice from an expert.
At some point, you will want to reap the benefits of your hard work and retire and relax. You need to begin planning for retirement now. As your business grows and you hire employees, you will want to know the best options for employee retirement plans. Establish a relationship early on with a financial planner. Too many people wait too long to hire a financial planner, mistakenly believing they must “make it” first. Wrong! Remember, a good financial advisor does more than sell investments. A good planner will make an investment in you and advise on a wide range of topics.
A basic liability policy is fine for a start, but find an agent that will work with you to identify your risk for loss and offer you insurance policies that both protect you and lower your costs. What happens if you get sick and cannot work – is disability insurance a good option for you?
A tax advisor/accountant does more than help you file tax returns. “Do-It-Yourself” tax programs were fine for your personal needs, but a good accountant not only helps you save in taxes in any given year, but can help you come up with a plan to minimize your tax liability as the business grows. Don’t be one of those small business owners who gets “surprised” by a big tax bill, or worse yet, an audit. Also, if you are doing your own books, make sure that you at least have a good program, like QuickBooks, that can issue readable bills and track your payables and receivables. As you grow consider a small business bookkeeper. There are many independent bookkeepers in Greater Portland who can save you time and money, and they are surprisingly affordable.
Sowing the right seeds for your business success is a great start. Of course, like any garden, you must tend to it and make changes on the way, but if begin with the right seeds, you are almost guaranteed to grow!
Marilyn “Mara” Miller
Marilyn is committed to small businesses. She is founder of M3 Consultants, which helps small business owners improve their cash flow through better credit practices. If you have comments or ideas for future issues please email Marilyn at firstname.lastname@example.org.