Yes it is true that having a Business Plan, having plenty of
Capital and having the right Economic Conditions are great starting
points, but in reality some of this is outside of your control. The
economy is an evolving creature and to some extent you cannot get out of
its way. Planning is just another word for having some goals in place
and capital only really affects those people whom need major equipment,
materials and staff.
Planning and Setting Realistic Goals
I know that many bank managers will try to tell you that a business plan is the most important part of the story. But in reality for the majority of mum and dad businesses whom do not employ staff and work for themselves see this as simply way to justify getting funds. Lets face it, anyone can chuck a bunch of figures together and make it look like a really thought out business plan.
But for me the most important part of doing Small Business Planning is to put aside a few hours a week to look at what my competitors are doing. My brother is a Carpenter and he spends a couple of hours a week ringing builders asking questions as if he was a client to see how they speak and what they might charge..
I also like to keep an eye on technology and the community. There is value in seeing how individuals search for business and where they go in the community. My brother for a long time did not have a web page, but now he does. So when he gives out a card and the new prospect asks if you he has some pictures of previous work he sends them to his website.
I personally enjoy sitting down and seeing where my income is coming from. If I am making more money in one area then I focus on that a bit more then areas that are not as productive.
Spending more time flogging a dead horse is a waste of time, so I find its better to spend more time working on areas which are currently making the money. Current Economics play a real role here, seasonal income is always there and some people spend more or less at different times of the year. Tax Time is a great time for many Small Businesses as individuals receive Tax Returns, so planning a letter box drop or similar around that time of the year can be beneficial for some businesses, obviously it depends on your business.
Accounting for Tax
I also see many Small Businesses who get into trouble because they forgot to set aside money for tax. This is usually only realized down the road after the fact, when they get hit with a large tax bill. It is important that Small Business keep records so that they can see week to week or month to month what their tax exposure is. You do not have to get bogged down, just keep basic records that accounts for income and expenses so you can see a picture of your tax exposure week to week.
It is important to note that having expenses does not mean you will not pay any tax. Many of those new to Small Business forget that every dollar they spend on themselves also has the potential to effect income tax.
We need to remember that if you bring in $50000 in a year and have $10000 of business expenses you owe income tax on the remaining $40000.
Many new to Small Business forget to plan and put aside money for tax and spend the whole $40000, because they think that now they are in business they can write it off with expenses. But as you can see from the above calculations if you have less expenses then income you WILL owe Income Tax.
Planning and Setting Realistic Goals
I know that many bank managers will try to tell you that a business plan is the most important part of the story. But in reality for the majority of mum and dad businesses whom do not employ staff and work for themselves see this as simply way to justify getting funds. Lets face it, anyone can chuck a bunch of figures together and make it look like a really thought out business plan.
But for me the most important part of doing Small Business Planning is to put aside a few hours a week to look at what my competitors are doing. My brother is a Carpenter and he spends a couple of hours a week ringing builders asking questions as if he was a client to see how they speak and what they might charge..
I also like to keep an eye on technology and the community. There is value in seeing how individuals search for business and where they go in the community. My brother for a long time did not have a web page, but now he does. So when he gives out a card and the new prospect asks if you he has some pictures of previous work he sends them to his website.
I personally enjoy sitting down and seeing where my income is coming from. If I am making more money in one area then I focus on that a bit more then areas that are not as productive.
Spending more time flogging a dead horse is a waste of time, so I find its better to spend more time working on areas which are currently making the money. Current Economics play a real role here, seasonal income is always there and some people spend more or less at different times of the year. Tax Time is a great time for many Small Businesses as individuals receive Tax Returns, so planning a letter box drop or similar around that time of the year can be beneficial for some businesses, obviously it depends on your business.
Accounting for Tax
I also see many Small Businesses who get into trouble because they forgot to set aside money for tax. This is usually only realized down the road after the fact, when they get hit with a large tax bill. It is important that Small Business keep records so that they can see week to week or month to month what their tax exposure is. You do not have to get bogged down, just keep basic records that accounts for income and expenses so you can see a picture of your tax exposure week to week.
It is important to note that having expenses does not mean you will not pay any tax. Many of those new to Small Business forget that every dollar they spend on themselves also has the potential to effect income tax.
We need to remember that if you bring in $50000 in a year and have $10000 of business expenses you owe income tax on the remaining $40000.
Many new to Small Business forget to plan and put aside money for tax and spend the whole $40000, because they think that now they are in business they can write it off with expenses. But as you can see from the above calculations if you have less expenses then income you WILL owe Income Tax.
Simple Easy Small Business Accounting Software which is available from EasyAs Accounting Software.
Let me show you a simple easy approach to small business accounting. Lets Face it, many Small Business owners are mums and dads trying to make a living, and the last thing you want is to be spending all your free time in front of the computer. EasyAs, Simple Easy Bookkeeping
Article Source:
http://EzineArticles.com/?expert=Sam_Harper
Let me show you a simple easy approach to small business accounting. Lets Face it, many Small Business owners are mums and dads trying to make a living, and the last thing you want is to be spending all your free time in front of the computer. EasyAs, Simple Easy Bookkeeping
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