Now that your business is registered and licensed, it’s time to start figuring out your funding. This can be a very delicate and stressful step, but it is imperative that you understand the intricacies of funding a small business and helping it grow through appropriate profit margins.
Open a Bank Account
Why do you need a business bank account? Trust us, it’s absolutely necessary. Having a business bank account keeps your business and personal expenses separate so that you don’t end up overspending one way or the other. If you fail to separate those expenses, you run the risk of dipping into your business funds for personal expenses or even vice versa! It makes it much more difficult for you to manage your expenses efficiently, and you won’t be able to keep a close eye on the health of your business since you won’t know your balance at any given time.
Hire a CPA
A certified professional accountant, or CPA, is an invaluable asset for any small business. If this is your first business, a CPA can save you in the long run. Starting up and running a business is a lot of work, and accounting is a major task on top of everything else on your plate. If you don’t have any experience or are bad with numbers, you’ll be glad you hired a CPA to handle this task for you. A CPA is also perfect for small businesses because they have a lot of great advice to offer based on their knowledge, experience, and expertise. You are their client, so they are incentivized to keep your business afloat in order to keep you on as a client—it’s a symbiotic relationship.
If you simply cannot afford to hire a CPA, you can get accounting software instead. Quickbooks comes highly recommended by us because it makes small business accounting as easy as possible, even for the inexperienced. It is not a foolproof system, and you should at least get your accounting looked at by a CPA to ensure that you’re using the software correctly and getting accurate results. Inaccurate accounting can cause you to lose the pulse on the health of your business, and it could also cause unintentional tax fraud or other serious issues that could cost you in the long run and threaten your business.
Determine Startup Costs
In order to determine your startup costs, start determining the costs associated with the following:
- professional services
- licenses or permits required to operate
- real estate (office, storefront, etc)
- payroll and benefits
It is recommended that you start out with six months worth of operating costs ready to go, so it is better to overestimate how much it will cost to start up your business and have a little more money available to keep you afloat as your business gets on its feet.
You now need to determine where you will get the funding for your business.
- Your personal savings
- Credit cards
- Help from family and friends
- Small business loans
- Small business grants
- Angel investors
- Venture capital
The majority of small businesses get off the ground with the help of several different funding options. While some may come from internal funding sources, the rest will often come from external funding sources. You will need to do your research and make an informed decision on which options will work best for your situation.
Trust the Professionals at the Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients.
Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning? We have the necessary expertise and years of proven results to help.
We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. Follow us on Facebook, Twitter, YouTube, and LinkedIn for more tax tips.