After toiling away in your cubicle for most of the day, you decided that wasn’t the life for you. So you started your own business. Most likely, it was more complicated than you ever imagined. While you may not have a boss, you now have customers you need to satisfy.
Running your own business can be very rewarding, but calling it hard work is an understatement. You will face problems you never encountered before. Your financial plan and strategy will require a makeover.
Many small businesses are hungry for cash. Federal government programs like the Canada Small Business Financing Program offer financing for small businesses. Proper tax planning can also boost cash reserves by letting you keep more of your profits. If you overpay your taxes, you are leaving money on the table that should belong to you.
When making hiring decisions, it can be tempting to pay low wages to save money. However, what seems like a cost-saving measure now can end up costing a lot more later on. Hiring unskilled employees, not investing in training, and high employee turnover can wreck your business. Everyone wants low costs, but you also have to invest in your business to make it grow. Paying competitive wages and offering benefits are a few ways to tilt the odds of success in your favor.
Key Person Insurance can be a financial deal breaker if you suffer a serious injury. You are the most valuable asset in your business, and you want to ensure that your business can survive if you are on the sidelines.
Most importantly, make sure you are not “all in” with your business. You will be able to think more clearly if you know it’s not the end of the world if things don’t work out. Maintain an active retirement plan that is separate from the business.