Starting a new business and becoming your own boss is a very common dream in America. The idea of not having to answer to anyone, and making a living by working on your passion is very tempting, but while everyone can come up with an idea for a new business, very few understand what it takes to keep it profitable, especially during a pandemic. There are, however, a couple of tips that can increase an entrepreneur’s chances of success.
Apply for Business Grants
Grants are a wonderful way to get your new business off the ground, and they are particularly attractive to new business owners, given that they don’t have to be paid back. An awarded grant can also help a new business gain traction by getting noticed more often by other organizations, investors, and even potential clients. And though getting a business grant can sometimes be difficult for a new company, it can be done. New business owners don’t lose anything by asking and finding out more about this type of opportunity, which is why we at Hispanic Grants encourage doing so.
Build Your Credit
Building your credit score is essential, but it can be more difficult than expected, especially for newcomers. According to Petal’s guide to building credit, a good credit score makes it easier for entrepreneurs to get loans and open more credit lines. This is especially important for Hispanic business owners, who may be first or second-generation immigrants. Studies show that Hispanic-owned businesses remain significantly less likely than white-owned businesses to have loan applications approved by national banks, despite reporting strong metrics on a variety of key lending criteria. Having a high credit score can only help strengthen a business owner’s case when they ask for a loan.
Protect Your Business Against Fraud
Business fraud can have dire consequences for a small business, according to the Houston Chronicle. The financial losses are often significant, and your company’s overall reputation could be tainted. Common examples of fraud against new businesses include payroll fraud, cash theft, online banking, and false invoicing. The first and most important thing a new business owner can do to protect themselves is to do research and learn about fraud, as well as share this knowledge with their employees. Another way to protect yourself is by implementing a fraud management system. This type of software offers screening of transactions across the board to ultimately identify and prevent fraud.
Don’t Expand Too Quickly
Growth is great when you do it right, as going too fast can mean trouble for a business. For instance, Inc highlights how finances can easily spiral out of control, causing business owners to make costly mistakes, especially when tax season nears. Growth also means that owners eventually have to start hiring new talent to help keep up with business demands. Sometimes hiring employees left and right can open the doors to a seedy employee that can cost the business dearly. Thus, remember to keep track of everything from the beginning — from finances to operations and processes. The better organized everything is from the get-go, the easier it will be to scale sustainably in the future.
Keep Your Books In Order
Just in case it wasn’t clear: filing taxes in the U.S. is a hassle, and no one can escape from this. For business owners, the easiest path is to hire someone to assist with the process. Bookkeepers can help maintain some semblance of organization. Accountants and tax preparers use this information to file your taxes when the time comes and can offer advice on how to save money. Lastly, a CFO can help you become more efficient and prepare for the future by creating short-term and long-term financial plans.
Keep these tips in mind to stay on top of your finances. By ensuring that cash flow and expenses are manageable, you’re well on your way to building a business that lasts.
5 Financial Tips for Small Business Owners
