Women owning and running their own businesses are more empowered and capable than at any other point in history. Thanks to social media and the internet, they have virtually unlimited potential to learn from experts, hone their entrepreneurial skills, and build a loyal following.
One area a lot of business owners feel out of their depth in, however, is finances. Being able to manage your own bank account is one thing but operating an entire business is another entirely and when it comes to businesses, money management is not always as easy.
To help you succeed now and in the future, here is some of the best financial advice for women who are just starting their small businesses.
Financial Tips for New Female Small Business Owners
Register as a Business ASAP
You should not have all of your company’s profits fall under your name. If you do, then you also become legally responsible for any damages your business could incur. The easiest way to protect your assets is to register your business as an LLC.
A limited liability company owner’s personal assets are exempt from any lawsuits or collections. If you ever wind up in debt or owe someone money, only your company’s assets will be able to be sold and used for recompense. Having this kind of protection in place can help you sleep better knowing that you set yourself up for success from the jump.
Learn About Your Tax Benefits
Registering as an LLC also comes with tax advantages you may not know of and the biggest benefit is a pass-through, which allows money to be paid directly to the owner without having any income tax deducted from it. You pay taxes at their own standard income tax rate rather than having to lose twice the amount.
Paying taxes as an LLC also allows you to choose how you want to tax your revenue. A single woman who owns and operates her own company will choose to be taxed as a sole proprietor. But there are also options to be taxed as a partnership, S, or C corporation depending on the structure and scale of your business.
Get as Much Funding as Early as You Can
You can start a business with no money in 2021, but you will have to eventually invest in your company if you want it to grow. No matter what niche you’re in, companies need capital to provide their goods and services to their customers.
You may look into borrowing a small business loan, asking for donations from family and friends, or even setting up a Kickstarter. Another option is selling your life insurance policy. You can review a guide that covers all the steps of cashing in on your life insurance policy, which you can put toward your professional growth.
Don’t Buy Before You Have Sales
If you plan to sell wholesale, make sure that you already have an interested audience before throwing thousands of dollars into acquiring merchandise. To do this you could use online surveys to find out which products your customers are interested in. Make sure you create an email list for your customers, that way you can always send them a survey so you know more about their interests. For a free online survey tool, try here.
While you should order some pieces for quality assurance and marketing purposes, limit how much you spend until you have buyers. The best way to secure the profits before you order in bulk is to launch pre-order sales before you launch. This allows you to gauge how many people are interested in your products before you take a massive hit.
You can also order a limited stock and sell those before you fine-tune your store’s inventory and only purchase what you know people want to buy.
Invest in security
As a small business owner, you may think that a security system is an unnecessary expense. But no matter how small your business is, commercial security systems are always an important investment. A security system will help to keep your merchandise safe from theft and accidents like fire.
Managing your business finances is not always going to be easy but with these tips, you should be able to do that. But if you still find it overwhelming, you can always find a financial advisor like Lincoln Frost to help you manage your business finances.