If you’re a small business owner, you’re already pre-disposed to keeping a tight watch on expenses. Naturally, any financial decision is on that comes with some considerable thought and even some hand-wringing. After all, you’ve gotten this far on your own. You wear multiple hats on a daily basis, and have been successful to this point. Why should you spend the money? Is it worth it? The simple answer is yes, but here are seven reasons why:
1. A Consultant removes emotion from challenges and difficult decisions
Sometimes business owners can be faced with challenging and emotional decisions. Countless hours were spent building the business into what it is today. Many folks – whether it be employees, vendors or family members – helped to get it to this point. But it may be time for some hard choices. A consultant can come in with a fresh perspective and give you the unemotional and unabashed advice needed to move forward in the growth of your business.
2. Consultants are Professional Problem-Solvers
Let’s face it – this is why you’re even considering a consultant to begin with: there something amiss in your business. Consultants are able to come in and help diagnose the challenge in front of you, and develop a plan of action to help you get moving.
3. Consultants are Teachers
This is our personal favorite, and not just because we both had had experience leading trainings or teaching classes. No – the real value a good consultant brings to the table is that they help you the small business owner learn something new. Perhaps it’s a sales strategy, a client relationship system or a new payment processing platform – the consultant should give you the knowledge needed to help your business become more efficient, and profitable.
4. You don’t have the internal staff to level up
This is one major reason why hiring a consultant makes sense: you need a rock star to help you get to the next level in your business. The other major reason…
5. You don’t have the expertise to level up
This is an extension of number 3, really. And it’s a common challenge for many newer small business owners as well, particularly those who are amazing in one particular area. The need to be competent in so many areas of a business (HR, Accounting, IT … the list goes on) can be too much. A consultant can make up for that shortcoming.
6. To help launch a business
Launching may be the toughest part of getting started for some, particularly if you are doing it alone. A consultant give you an opportunity to bounce ideas around, strategize around financial decisions, and hone in on your marketing message and target audience to name a few. And of course, it’s great to have another set of eyes to review documents, licenses, and leases.
7. To facilitate change
Finally, one of the hardest challenges to overcome is that of change. It is human nature to resist change, often times because it is so uncomfortable. A good consultant knows this, and helps businesses navigate the emotional minefield that is filled with fear, anxiety and uncertainty. They also can inspire a business to tackle the change by setting digestible goals.
Finally, if you’re a business owner looking at bringing on a consultant – do your homework. Line up a few choices, ask about how they work with their clients, and seek out testimonials. When you make your choice, make sure you are ready to dive in head first with someone you like and trust.
It should come as no surprise that 2 of the top 5 reasons a small business might fail has to do with money. Specifically, small businesses struggle with cash flow and/or run out of cash altogether.
Now, there are many contributing factors as to why a business might fail. Hiring the wrong people, poor management decisions, never even writing a business plan are some of the biggest offenses. That said, if you really want to give your small business a chance at success, there are two key pieces that must be addressed:
1. Know your Price Points
We have found that B2B Small Business Owners are some of the most talented people in their field. But, when making the switch from a W2 career, they most always undercharge as soon as they launch. Why? It is a myriad of reasons, primarily rooted in fear. The solution here is simple: know your market, deliver value and understand the total cost of what you are providing, not just the face-to-face time with the client.
2. Get Good at Sales
Depending on your previous W2 life, sales might not be your strong suit. If it isn’t, understand a few things. As the business owner, you are now and always will be its chief sales person. If sales is not your forte – seek out trainings and mentors, and do it immediately. From dedicated sales coaches and customized trainings to small business consultants that provide personalized plans, there are countless ways to build and grow your sales skills.
The Small Business failure rates are constantly updated by the Small Business Administration. Nearly 1 of 5 small businesses fail in the first year and 5 in 10 fail in year five. The reasons for failure are equally well-documented. Charging appropriately for your products and services, as well as developing a successful skillset in sales are two factors that B2B Small Business Owners must embrace early in their ownership journey.
It’s that time of year where every business is getting update calls and questions from their tax professional. But if you’ve just recently launched your business, here are 3 items you must know and ask during Tax Season.
1. I work from home – can I use the workspace as a deduction?
According to Craig Fortin, a tax specialist for small businesses, well … maybe. “Is it exclusive use? That's the 1st question to answer. If yes, then you probably can. Don't forget to include all utilities and maintenance costs to maximize the deduction. Also if you have a direct expense such as a built in desk or bookshelf you can take 100% of that expense."
2. What is a direct expense? How is it different than a capital expense?
To answer these questions, says Fortin, you need to look at the period of time or use. “If it's copy paper it's reasonable to "expense" that directly as you would likely use that up within the tax year. Also, it's inexpensive and capitalizing it just wouldn't make sense. If it's furniture,” said Fortin, “that will not be ‘used up’ within the year so that would be capitalized or expensed over its lifetime. IRS has guidelines for these assets. Finally, capital assets often can be expensed using Section 179 of the IRS code. That means even if you would normally depreciate an asset over several years you may be able to expense it directly. This can often provide large, immediate tax savings. For instance one of my clients purchased a piece of equipment in late December for almost $50,000. He was able to deduct the full cost even though the "useful life" according to the IRS is 5 years.
3. What can I do this year to make my tax picture better next year?
Fortin recommends that you ask your accountant that question now as he or she is preparing last year's taxes. “Make sure and be upfront with your plans,” he said, “even [consider] what's going on in your industry and individual business.” He goes on to recommend that you talk about personal plans and concerns too as they are so closely intertwined with your business. “If you are having a hardship bring that up. Don't be afraid to own it. You may be surprised by the wealth of knowledge (or lack thereof) that your accountant has. I spent many years as a banker lending to small business owners before starting me tax practice so I have seen many different companies resolve their problems in ways I may not have thought of.”
If you have just recently launched your business, and you’re overwhelmed with the operational tasks – we can help. Contact us today at 619-252-6518 or click here to request more information.