Answers to the 5 Top Money Questions of Small Business Owners
I’ve answered hundreds of small business accounting questions this year from clients, consults, and through this blog. Instead of responding to a finance query from an entrepreneur this week, I wanted to address some of the biggest issues I’m asked.
Being a business owner is one of the most rewarding jobs in the world, but it’s not for the faint of heart. There is no instruction manual to run your company. It requires research, stamina, support, and confidence.
It also requires a basic knowledge of money.
Numbers tell the story of your enterprise. As the line between personal and professional mix for small business owners in terms of their finances, it’s critical to understanding the fundamentals of accounting. Creating budgets, tracking your expenses, and reconciling financial statements are as integral to the health of your company as a business plan.
So here’s a round-up of advice and resources for some of the most pressing issues I hear about from business owners. As you analyze your statements and reflect on the year that was, here’s some suggestions for an even stronger showing in the year ahead.
1. Find Affordable Healthcare
Without you, there’s no business, so staying healthy is critical. When you own your business, you’re responsible for your own benefits, and finding a plan you can afford is not easy. Direct primary care (DPC) is a lesser-known option that may provide you the coverage and access to preventive care you need.
DPC is basically a membership plan for medical care. You can typically sign up on a monthly, quarterly, or annual basis. In addition to gaining access to a primary care doctor, you can obtain clinical and laboratory testing as well as other services.
My view is that DPC is a great option for small business owners, freelancers, and other professionals who need affordable insurance coverage and can’t afford the high costs of traditional coverage, or have pre-existing conditions that limit their options. Could it be right for you? I’d encourage you to research DPC options in your area and make a few calls to find out more specifics.
2. Know When to Outsource
Identifying the areas of business that don’t play to your strengths or tastes can be a roadmap as your company grows. Those areas are the first that you should seek to outsource when you are able.
Ask yourself these questions:
- What are the critical activities that generate revenue? Your efforts should always be focused here.
- What activities energize you about your business, and which are the ones you dread? We tend to drag our feet on tasks we don’t enjoy, which is not an efficient use of our time or resources.
- What areas of your business are you uncomfortable managing? If you feel you don’t have the knowledge to execute certain aspects of your company successfully long-term, you should plan to outsource to a qualified professional as soon as possible. For many entrepreneurs, these include legal and financial tasks.
When you’ve identified the areas where you know you need outside help, treat the process seriously. Ask your network for referrals, take advantage of free consults, and check references. Ensuring that you have the right team members will propel your business forward.
- Be in Constant Learning Mode
As a business owner, you can never know enough. You constantly strive to learn more about your industry, running a business, marketing, maximizing profit…all with limited time and resources. Regardless of your stage of business, there are a host of free resources that can help you with your professional development and business growth.
One of my personal favorites is SCORE, and there is some fantastic information available from podcasts and, of course, good old-fashioned books. I put together a list of resources that will help you continue striving and growing well into the future.
- Maximize Your Spending
We all have a fixed amount of money to cover our expenses from year to year. We can make that number work for us a little bit harder by knowing the investments that can help us come tax time.
Be sure to track spending like memberships, mileage, and equipment closely now so that you can write it off later.
- Take a Break
Running a business is a tremendous physical, mental, and emotional load. Know that there will always be more to do. There comes a point where the best way to get stuff done is to take a break.
Taking time off is essential. Entrepreneur magazine called rest the secret to success.
The fact of the matter is that your mind and your spirit will perform so much better when you’ve taken opportunities to refuel and recharge.
So think back to the ebbs and flows of the past year. Pull out next year’s calendar and block off time for vacation. Whether a staycation or a tropical getaway, your business needs you to be well-rested.
It may feel impossible but with the right planning, you can make it happen.