Whether you’re starting a business from scratch or acquiring one that already exists, you need the funds to make it happen. We’ve talked in length about different TYPES of funding options and how you can do a bit of “hacking and stacking” to work it out in your favor. (Catch up here.)
But what happens after the deed is done? After all the research, paperwork, and time, the money is finally yours, and you’re ready to take the small business world by storm. You want to make the most of this opportunity and this investment; however, there are seven common post-funding no-nos that many small businesses make once that money hits their account.
1. Poor Planning:
Not having a clear plan or strategy for how you will use your funding is a big no-no. You gotta have a detailed plan in place for how you’ll use these new funds to grow your business and achieve your goals. Every dollar should have a job and a purpose.
Networking: What is it good for?
If you're an extroverted chatter-box and certified ENFP on the Myers-Briggs, you probably love the idea of networking. Meeting new people and forming connections is right up your alley, and the thought of walking into a room full of strangers and making friends is your definition of a good time.
For those who don't share that same level of enthusiasm, the idea of networking is walking into a room full of strangers - but completely naked. It's uncomfortable at best, and if they had to choose between meeting new people and watching an entire season of The Bachelor, they'd give their rose to the latter.
But whether you love it or loathe it, networking is a fundamental part of being a successful business owner.
Entrepreneurship is often a solo endeavor. The predisposition to be self-reliant and self-sufficient reigns supreme. They keep their heads down, stay focused on the task at hand, and have lofty goals they intend to achieve.
Will that be cash or charge?
When was the last time you heard that phrase? Or - and here’s a bigger throwback for you - when someone asked if you wanted to pay by check? It seems wild that just twenty years ago, we could walk into the mall (remember those?) and leave with a new pair of shoes simply by putting our John Hancock on a slip of paper (with the logo of our favorite football team in the background) that may or may not clear once it hit the bank.
How we pay for things continues to evolve, and as a small business owner, you must understand how these changes affect your bottom line. (Spoiler alert: It ALL affects your bottom line.) We now have cash, credit cards, debit cards, ACH payments, checks, mobile wallets, and various peer-to-peer payment and online platforms to choose from.
So which ones should you accept? And which of them should you kick to the curb?
The jerk-knee response is, “take them all,” right? You want to make it as...
This seems like a wise bit of advice, no?
Most of us, at one point in our careers, have made the mistake of making guarantees we had no business making. Whether from overinflated confidence, a complete lack of awareness, or just wishful thinking, you promised the moon - and then suffered the fallout when you fell short of those promises.
Likewise, we’ve all been on the other side of the coin (or the dark side of the moon, if you will). You’ve placed your trust, confidence, and money in a person or business that promised one thing but delivered something very different. Were you a repeat customer after that? Probably not. You got burnt - and it sucks.
It’s not rocket science.
Anyone in the business of consistently overselling and under-delivering will likely not be in business very long. At least, not without the help of a very, very good marketing team.
But does this mean that doing the opposite of underpromising and...
There is no foolproof way to avoid being audited. The IRS makes most of its selections either because the filer is part of a targeted group or because a computer program picked out the tax return.
However, even though many of the returns are chosen randomly, certain red flags make a return more likely to be audited. If you do not want the IRS knocking on your door, avoid these red flags:
1. Arithmetic errors: If you make an addition or subtraction error, you will hear about it. This usually does not result in a full-blown audit but check your math before filing your return.
If you do get a letter from the IRS about your perceived mistake, double-check. Sometimes a number was read or keyed incorrectly.
2. Mismatched numbers: For example, if the numbers on your 1099 form do not match the entries on your return, the IRS will notify you. Double-check to be sure the error was yours, not theirs. IRS employees have been known to err.
3. You get most of your income in...
One of the routes to financial independence is via real estate. To fully appreciate the value of real estate participation is to utilize the tax benefits associated with real estate investing.
This week we are revealing one of the best-kept secrets in America!
The benefits of a Cost Segregation Study are undeniable. Cost segregation is a tremendously beneficial and widely used tax strategy for residential development and commercial property owners. This technique can significantly reduce taxable income, which in turn increases cash flow - formerly a tool used by the largest accounting firms and real estate owners. It has become routine among almost every size business! Nearly every person who owns or operates any type of real estate can benefit from using Cost Segregation!
By identifying and placing the various individual assets purchased in a real estate transaction into their proper shorter 5, 7, or 15-year depreciation lives (rather than on a 39-year life...
If you’re someone who hated homework in high school - we’ve got some bad news for you.
The expression “what you don’t know can’t hurt you” might be valid for a lot of things, but when it comes to buying a business, what you don’t know is precisely what could bite you in the ass.
Performing due diligence is one of the most critical steps when purchasing a business. I don’t care if the dude you’re buying from is your brother’s best friend’s sister’s step-uncle, who you’ve known since you were in diapers. You should always, ALWAYS, do your homework before making anything official. A misrepresentation of facts or figures - intentional or otherwise - is always a possibility. Protect yourself from agreeing to a crap deal. Remember, it's not personal - it’s business.
When is it done?
Due diligence is typically one of the final phases of your business acquisition journey. You’ve already...
Your business is in a constant state of evolution. Workflows can be improved; sales increased; processes honed; client experiences enhanced. Vertically. Horizontally. Improvement is a continuous pursuit.
The history of the Oxford English Dictionary is an ideal example of this mindset. Googling a word’s meaning or – gulp – leafing through an actual paperbound dictionary is somewhat of a luxury. When the Philological Society of London members decided, in 1857, that existing English language dictionaries were incomplete and deficient, they called for a complete re-examination of the language. While they knew they were embarking on an ambitious project, they didn’t realize the full extent of the work they initiated or how long it would take to achieve the final result.
The project proceeded slowly after the Society’s first grand statement of purpose. Eventually, in 1879, the Society agreed with the Oxford University Press and James A....
Entrepreneurs must have an ego. As at the bar during happy hour, everything in moderation, kids!
There are tons of reasons companies (big and small) fail, but it often comes down to one thing: hubris. Their leaders lack humility. Oddly, this lack of humility in the pursuit of largesse keeps them from realizing just what an enormous problem that is. It keeps them in denial of their own limitations.
There is no better example of this folly than a successful company deciding to build a new home for their operations - only to have their businesses collapse soon after that under the weight of excessive costs and overhead.
These case studies are not here because we like lists. They're offered to you because the good ones learn from their mistakes. The great ones learn from the mistakes of others. Be great.
At the height of print media and ignoring the heavy footsteps of the internet, The New York Times Company built a 52-floor monolith as the business' client base was...
"By failing to prepare, you are preparing to fail."
Unexpected costs when running a business are going to pop up at the worst possible time (think giant zit right before the big high school dance kind of timing). It doesn't matter how carefully and thoroughly you planned your budget – Murphy's Law guarantees the one expense you didn't account for is the one you're going to incur.
With that in mind, today, we're going to cover five unexpected costs you might encounter as a business owner. It's our way of giving you the upper hand…and giving ole Murphy the middle digit.
Nothing lasts forever, and at some point, everything from construction equipment, machinery, ovens, printers, and computers will need servicing or replaced altogether. Depending on the nature of your business, some of these will immediately negatively impact your bottom line. (If you have a print shop and your printers go up, you're in trouble.)