Starting a business is difficult. Indeed, studies show that most companies that are established don’t see their first birthday. There are many reasons for this. Some entrepreneurs start their companies without doing due diligence. Other people simply don’t know how to manage money and run businesses. Others are simply not good stewards of their finances. In this article, we will look at the top five financial hacks that new entrepreneurs should have.
There are so many processes involved in starting and running a company. Some entrepreneurs believe that creating a team early on is a good thing. However, this is usually expensive because employees are usually the biggest cost of a company. They need an office, wages, allowances, salaries, and taxes. Instead of hiring employees, a useful financial hack is to outsource when you can. You can use websites like Upwork and Fiverr to find affordable employees to do some things such as website design, content marketing, and graphic design. This will save you a lot of money.
Corporate taxes are usually big costs for businesses. As a young company, you need to ensure that your business is paying as little taxes as possible. This is because taxes are expenses that can add up in time. Depending on the nature of your company, it is possible to lower the taxes by registering it offshore. Consulting with a corporate services company like PageCorp Group can help you come up with a good taxation strategy.
As a company, it is important for you to use less expensive tools to manage your finances. In the past, entrepreneurs used to use physical documents to track cash that was coming in and out. Today, things have changed, and companies are using simple online tools to manage their payments. Some of these tools are Quickbooks, Zoho Books, and Freshbooks.
There are other tools that you can use. For example, instead of buying and installing storage servers, you can use cloud computing tools like Dropbox and Box. You can also tools like Salesforce and Zendesk to communicate with employees. All these tools come with a free trial and a free package. You should take advantage of these free offers to save money.
A common finance mistakes we see is when entrepreneurs combine their personal accounts with those of their businesses. This is wrong. You should open a company account as soon as you register your company. Doing this will help you track expenses and manage your company’s income better. It will also help you when it comes to paying local and federal taxes.
As an entrepreneur, you need to be greedy with your equity. If you believe that your company is a great idea, you will need to raise money from investors. If they believe in your idea, these investors may decide to offer you more money to take more equity. This is wrong. Instead, you should be ready to take less amount of money and give out small equity. In the past, we have seen many founders lose a lot of equity by selling their young companies to venture capitalists.
By Sergios Charalambous – Contributor || 14/01/2020
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