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Protecting Your Personal Finances When Starting a Tech Business

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StrategyDriven Starting Your Business Article | Protecting Your Personal Finances When Starting a Tech BusinessAre you finally ready to build your dream of starting your own tech business? If so, you may be concerned about how your business will impact on the personal and family finances that you are responsible for. However, there are many ways that you can help to both protect your business and your family at the same time when starting your tech company, and this guide will provide an FAQ to help you.

How can you finance your business?

If you are thinking about starting your tech business, then you may be worried about how to get the right amount of capital if you do not have the full amount in personal savings. However, there are many ways to finance a business without dipping into your savings. These include finding funding from the government or a business awards scheme which can provide you with the funding that you need to research and produce your innovation.

You may also be able to find an angel investor through attending networking events or create a crowdfunding campaign where the public can help to contribute towards your business on websites such as Kickstarter. You should also look into getting loans from your friends and family as these will help to support you without the interest of bank loans.

How can you keep business and personal finances separate?

Many new businesswomen are concerned about their ability to both support their family and create their business from scratch, even though it is possible to do so. To keep your personal and business finance separate, you should create separate personal and business bank accounts, enabling you to keep track of your expenditure for both, know how much profit you are making in a glance, as well as how much money you have to re-invest into your business easily, and allow you to fill out tax returns quickly.

You should also set yourself a business budget and a personal salary to enable you to split your money into reinvestment and family funds and to ensure that you have enough money for both of your purposes. This will stop you from exceeding the amount of expenditure that you can afford. You should also consider employing a financial advisor who can help to separate your expenditure and advise you on how to manage your finances more effectively.

What should you do if you are struggling financially?

If you do find that you are struggling to manage your personal finances successfully, you should consider taking out a personal Quick Loan, such as those provided by Cash Lady between £100 and £2000. This can help you to deal with any unexpected expenses that you have at the same time as building up your business which you have failed to budget for, as well as helping you to balance your personal and business finances more effectively until you are able to manage these and repay the loan that you have taken out.

 

“Can I Deduct That?” 8 Must-Know Tax Deductions for Small Businesses

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StrategyDriven Managing Your Finances Article |Tax Deductions for Small Businesses|"Can I Deduct That?" 8 Must-Know Tax Deductions for Small BusinessesThere are over 32 million small businesses operating in the US.

That’s a lot of people working hard to sell their products/services and, hopefully, turn a profit!

Let’s face it, money is the lifeblood of any business. It’s a competitive world. With insufficient capital to hand, it won’t be operational for long.

For that reason, it’s vital that small businesses squeeze as much money as possible from operations.

Tax deductions constitute one essential method of doing exactly that.

After all, paying a hefty tax bill is rarely pleasant. For small businesses trying to maximize their profits, it can even mean the difference between success and failure. Are you looking for ways to save money on your business’ tax bill this financial year?

Keep reading to find out 8 must-know tax deductions for small businesses.

1. Business Supplies

Let’s start with the basics:
You can deduct from your tax bill all of the expenditure on essential business supplies.
It might not seem like much. However, any owner knows how much these necessary fees can stack up. For boot-strapping start-ups, every little bit counts!

Look around you. It’s possible to claim for almost anything you’ve bought for the purpose of doing business. Stationary (pens, pencils, paper, staples…), printers, cleaning materials, desks, chairs, sofas, whiteboards, projectors…The list goes on.

You can deduct any and all of them.

2. Travel Expenses

Business travel isn’t cheap.

It’s also essential for many companies. Business travel is commonly a vital aspect of creating leads, meeting with investors, attending conferences, generating interest, and so on.

There is all manner of opportunities to travel for business purposes.

Nicely, almost all of it can be claimed for. Often, entertainment costs can be claimed for too.

All of those flight tickets, bus tickets, train fares and so on are all deductible. Likewise, certain related expenses such as meal costs, room service, dry cleaning and so on can be claimed.

Of course, keeping a solid record of each transaction is important. Equally, certain limitations apply too. You can’t claim for absolutely everything! You must understand your tax obligations in full to be successful in any tax preparation.

3. Personal Vehicle Expenses

Many small business owners use their personal car for work purposes.

The money spent on this process is often tax-deductible. Note that only the business side of things can be claimed for! It’s crucial to separate the business from personal usage.

Granted that’s possible, then you can claim for everything from mileage to parking fees. It’s often tricky to ascertain true mileage for a trip. Be sure to record mileage by referring to the odometer, or a GPS system.

Don’t forget to deduct expenses for insurance and maintenance costs too. Owning a vehicle isn’t cheap. Using it for work can only exacerbate that. Be sure to leverage the tax deductions available!

4. Necessary Overheads

Look at what you fork out every month to keep your business operational:

Rental commitments, utility payments, internet costs, and phone usage are all crucial costs. They’re all unavoidable expenses. You couldn’t do business if you didn’t pay for them all.

For that reason, it’s possible to deduct it all from your tax bill! This can make a big difference at the end of the financial year. Again, accurate record-keeping throughout the year is essential.

5. Software & Equipment Costs

Almost every business has specific demands.

Industry-specific equipment and software is often a necessary expense. Likewise, updates and new installs are vital to staying up to speed.

These costs represent another worthwhile deduction on your tax bill. You can claim for each and every one of them, up to a certain amount of money. That means your actual computers, and all computer software can be claimed for.
Other essential equipment (such as equipment for manufacturing) can also be deducted under this bracket.

6. Your Home Office

Most people think of business and conjure images of swanky corporate offices in the city.
And, of course, that’s often accurate.

However, many small businesses are operated straight out of the family home. If that’s your set up, then you have the benefit of claiming for the costs of your home office.

That said, it must be wholly business-related. You can’t work from your kitchen and claim it’s your office! Instead, a designated space from which you operate is required.

Tick that box, and say hello to deductions for internet, insurance, rent, phone bills…and so on. Likewise, furniture and supplies can be claimed for too.

7. Outsourced Professional Services

It’s rare for someone to actually enjoy the tax process!

Consequently, many business owners opt to outsource the process. All bookkeeping and tax returns are completed by a professional.

Nicely, their fee can be deducted from your tax bill at the end of the year. Even better, it’ll be their job to work it out and complete the forms for you!

It doesn’t stop there. You might work with lawyers and consultants as well. It’s possible to claim for the money you’ve paid them too.

8. The Interest Payments on Debt

If you’ve gone into business, then chances are you’ve taken on debt to fund it.

Leverage, in the form of bank loans, is often an essential means of getting it up and running. After all, almost every business needs upfront investment to become a success. This start-up capital is used for all sorts of reasons. It can amount to a significant sum.

The burden of debt is rarely fun. However, it’s possible to claim for some of it.

Unfortunately, the loan itself is off-limits. But the interest payments are entirely tax-deductible.

Final Thoughts on Tax Deductions for Small Businesses

There you have it: 8 essential tax deductions for small businesses to know about.

Millions of small businesses are currently operational in the US. It’s guaranteed that profit maximization is a priority for every single one of them.

Indeed, the ability to cut expenses and turn a profit is vital to remain in business. Cutting costs wherever possible often comes into it. Tax deductions are an easy and essential method of doing exactly that.
Hopefully, this post has highlighted the main sources of tax deduction out there.

Get That Business Budget Down

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StrategyDriven Budget Management Article |Budget|Get That Business Budget DownHaving a business budget is something that most businesses actually ignore. They know there’s a margin to stay close to, but there’s not really a definitive figure that they have to try and meet. So it’s so easy for the budget to get completely out of control, leading to stress and financial turmoil along the way. It’s one of the main reasons why so many businesses go into administration, even those that you think will go on forever. And it all starts with basic budget management that so many businesses seem to be ignoring. So, we’re going to try and help you out, and see if we can get your business budget down. There will no doubt be so many different areas that you need to work on and make some cuts to, and it won’t mean that quality is reduced either. Half of the time, businesses are cautious as to cutting a budget, because it can often mean a knock on effect. But we’re going to avoid all of that, and give you some simple tips that should help you to get that budget down.

Your Office Budget

So there will be multiple different things that you’ll have purchased for your office over the years, that will now be helping to make your business run as a well oiled machine. Technology is the main part in that, then your employees. So with technology, it’s definitely easy for it to drain your budget each month, simply because it’s harder to manage. It might be so much cheaper for you to visit websites such as www.24hourtek.com, and see if you could benefit from using some of their services. By outsourcing your IT management, you’re not only going to save your business money in the long run, but you’ll be doing it by saving some man power. From software updates to server management, there are companies who will do it for you all in the background!

When Marketing Starts To Add Up

Marketing is one of the biggest budgets that a business seems to have, especially as it begins to grow and evolve. There becomes more of a need to market new products and services, and to keep your business in the race. But when a marketing bill starts to add up, it really does add up. So rather than outsourcing everything you do, simply because you don’t understand it, think about keeping some of it inhouse. The more you understand marketing, the easier it will be to actually manage it in house, and even do it more effectively than if it was to be outsourced.

The Areas You Want To Avoid

There are definitely some areas that you want to try and avoid cuts, and that’s with your employee wages and benefits. So many companies don’t get their employees to sign a contract, and they then use this as a way of being able to cut pay. But the last thing your company should want, is a bad reputation based around employees and the management of them, so always avoid this area when making cuts!

How to Use Outsourcing to Boost Your Profits

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StrategyDriven Managing Your Finances Article | How to Use Outsourcing to Boost Your Profits | Entrepreneurship | OutsourcingOutsourcing is a word that’s used a lot in business articles and guides for business owners, but is it really worth considering if you only have a small business or are a sole trader? If you think of outsourcing as something that only medium to large companies need to do, you’re missing out on a powerful way to boost your profits, because the benefits of outsourcing have no relation to the size of your business.

Because of its association with more sizeable businesses, outsourcing tends to be viewed as a situation where a whole section of a large corporation or organization is subcontracted to another company. For example, a hospital that pays a specialist cleaning company to undertake all the housekeeping duties.

There could be fifty or a hundred employees taking care of the hospital with not one of them being employed directly; the hospital pays the cleaning company, and the cleaning company deals with staff management. The hospital director gets a clean hospital without having to worry about looking after staff, equipment, recruitment, rotas, and all the other responsibilities of doing the cleaning in-house.

The test of whether outsourcing can work for you is to examine the numbers, which will tell you if outsourcing is viable in your circumstance or not. You may be a small business with a handful of employees or someone who works alone out of their back bedroom, but the same financial calculations are as applicable to you as they are to the hospital director. The bottom line is, can you earn more in the time it takes you to perform a task than it would cost you to pay someone else to do it? That’s the essence of how outsourcing boosts your profits in a nutshell.

In practice, what it means is that if your profit is $35 per hour as a freelance researcher, and it costs $20 an hour to employ an assistant to do all your admin, every hour you spend doing admin is costing you $15. If you spent those hours doing more paid work, you could have all your admin done for you and still be making money. In some cases doing tasks yourself could well be costing even more if you don’t have the skills to complete the task effectively and efficiently.

For instance, if you do all your own SEO, that could be taking you five hours each week, so straight away you’ve got the difference between how much you’re losing by not earning, and the cost of outsourcing the task. However you’ve also got the loss you’re incurring by spending more time than an expert would, and not being as effective as an expert at optimizing your business presence. By outsourcing to a specialist like Orlando SEO, you can devote more time to earning, and have a better return on the investment than you’d get if you carried on trying to do your SEO yourself.

Have a look at what you’re doing that could be done by someone else, and see how much it would cost to outsource those tasks. Even if you just take on a remote assistant to do two hours a week, if you make $35 an hour and pay them $15 an hour, over a year you’ll boost your profits by over $2,000 a year!

7 Ways To Save Money On Equipment For Your Business

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StrategyDriven Managing Your Finances Article | 7 Ways To Save Money On Equipment For Your Business | business equipment | entrepreneurshipLots of companies can end up overspending on equipment. Whether you’re buying office furniture or industrial machinery, here are seven tips to keep the costs down.

Shop second hand

Used equipment is always cheaper than brand new equipment. You do however need to be wary of the condition. Older equipment that has been well used may be more likely to break. For this reason, you should always inspect such equipment in person before buying.

If you’re buying used equipment online, make sure that a description of the condition and photos are provided. It could also be worth buying from a reputable seller – read reviews to see what other customers have to say.

When it comes to general equipment, it could be worth looking out for company closures in your area. Many companies will be selling equipment for cheap simply to get rid of it – some of it may be in very good condition.

Look out for sales and coupons

Dealers of both new and used commercial equipment may have sales throughout the year. A popular time to hold a sale is in January, whilst the Black Friday weekend is another popular sales period. Also look out for off season sales on seasonal equipment – commercial mowers may be cheaper to buy in winter when there’s less demand for gardening equipment. You can also check some great suggestions here for a professional mower.

You may also be able to grab discounts by using coupons. These can be found on coupon sites or by signing up to commercial equipment retailer mailing lists.

Avoid splurging on gimmicks

It’s important that any equipment you buy is appropriate for your needs. Try to avoid splashing out on equipment that’s more complex than necessary. If you’re only looking to do some basic printing, you don’t need a heavy-duty industrial printer capable of printing 60 sheets of paper per minute – a basic commercial printer will do the job and will save you money. Only high end niche businesses are likely to need the most complex equipment available – if you’re starting a printing company, a heavy duty printer might be more suitable.

Hire single use equipment

A popular mistake made by many companies is buying equipment that will only ever get used once or twice. By hiring this equipment, you could save a lot of money.

Hiring equipment can also be sensible if you don’t have the storage space for such as equipment. For instance, a construction company may hire a crane rather than buying one. This could save money having to create extra warehouse space.

By shopping around, you can find the best equipment hire prices. Make sure that the company has a good online reputation so that you know you’re hiring good quality equipment. A good company will keep all equipment well maintained – although you may still be liable for any damage you cause.

Consider energy efficiency

Energy-efficiency is an important factor to consider when it comes to buying machinery. A machine that consumes a lot of energy will cost you more in energy bills. Older equipment is likely to be less energy efficient than modern equipment, which is something to consider when buying used equipment. You may be able to find information on the energy efficiency online, as is the case with these energy efficient desktop computers.

Know when to repair, when to replace

You can also save costs by knowing when to repair and when to replace equipment.

Choosing to repair equipment could save you money in many instances. You can find all kinds of niche parts online from a wafer ring/frame to a new monitor screen – if you feel up to the challenge, you could do your own repairs. Alternatively, you could hire a repair technician to do repairs for you – this may still be cheaper than replacing with certain equipment.

You may want to consider replacing equipment if it is old or has broken numerous times in the past. It’s possible you may be able to sell old broken machinery for parts – this could help give you some money to put towards a replacement.

Warranties or contents insurance may be able to cover the cost of repairing or replacing machinery in some cases. This is worth looking into before you make any decisions.

Maintain your equipment

You may be able to stop equipment breaking in the first place by keeping it well maintained. Certain maintenance may be able to be carried out by your employees, whilst more complex equipment may need to regularly serviced by a professional technician (such as construction vehicles or medical machinery).

Cleaning is often one of the most important maintenance tasks – this is not just a matter of health and safety but also a way of keeping machinery working properly. Dust build-ups can affect many types of machinery and are a common cause of computers failing. If there’s a lot of dust in the air, you may be able to install an extractor fan or use an air purifier to keep it clean.

You should also be careful of environmental factors like cold and humidity. Certain machinery may break if it is stored somewhere that is too hot or too cold. Agricultural machinery for instance may need to be kept indoors when not in use and covered up to prevent damage from rust.