How CPAs Can Help Your Business Grow

Whether you’ve decided to start a new business or you’re ready to take your existing business to the next level, it’s a good idea to enlist the help of a Certified Public Accountant (CPA).

Many new small business owners make the mistake of thinking they can handle all of the financial aspects of their businesses themselves. While the average business owner can handle a certain amount of these tasks, it’s always better to have an experienced professional you can call on. Here are some of the things a CPA can help you with as you grow your business, brought to you by E-City Beat.

Laying Down a Strong Foundation

There’s nothing more important than starting your business the right way to ensure that all of the systems you set in place contribute to your success.

In terms of creating a strong foundation, a CPA will assist you with the following:

  • Determining the best business structure for what you’re doing, such as an LLC or sole proprietorship.
  • Analyzing the financial aspects of your business plan.
  • Help you choose accounting software that meets your needs.
  • Advising and assisting with your business bank account.
  • Ensuring that your accounting procedures are in line with government regulations and requirements.
  • Ensuring you understand the importance of maintaining separate business and personal expense accounts.

Essentially, a CPA can lay the groundwork for your business finances so that you have a blueprint to follow and refer to as you move forward with your operations.

Dealing With Ongoing Financial Tasks

Once things get going for your business, you’ll need to maintain the accounting system implemented by your CPA. However, you won’t be going at it alone as your CPA can take over the ongoing financial tasks necessary.

Some of those tasks may include:

  • Ensuring that the independent contractors you hired are classified correctly by the IRS.
  • Keeping you updated on your financial statements so that you have a thorough understanding of the nooks and crannies of your business.
  • Overseeing the payroll and payment processes for all employees.
  • Advising on the estimated tax payments you should be making throughout the year
  • Determining which employees should receive W2 and 1099 forms, and when.
  • Reviewing and finalizing your books to ensure that all your paperwork checks out before submitting your business tax returns to the IRS.

While you can do many of these tasks on your own, it’s best to delegate as many as you can to a professional.

Supporting Your Business’s Growth

When it comes time to grow your business, having a CPA on your payroll can be a critical resource as they can help you manage the entire process.

A few things they can do to support the growth of your business include:

  • Helping you determine which areas are prime for growth by providing insight on your cash flow patterns, inventory management, financing, pricing, and so on.
  • Advising you on equipment and property leasing and purchasing
  • Preventing you from getting audited by the IRS and helping you with the process should you get audited
  • Creating financial forecasts and a budget to help you make better business decisions
  • Assist you with the sale of your business if necessary

These are just a few ways that a CPA professional can work with you to help your business grow. You can choose to have them take care of all your accounting and financial tasks or just some specific ones that you’re unable to manage. Either way, they’re an asset to small business owners.

Pros and Cons of Buying an Existing Business

If you’re ready to leave your unfulfilling career behind to become your own boss and you’re not quite sure of what you want to offer or sell, buying an existing business may be a great option. But just like for a startup, there are pros and cons to consider before taking the plunge. E-City Beat presents a list of positive and negative outcomes to help you decide if buying an existing business is the right move for you.

Positive Outcomes

The products or services you sell are already market-tested. You know there is a need for what the business is selling, and you can generate more sales by allocating money for online and offline advertising. The Digital Marketing Institute suggests investing in online marketing strategies like SEO, social media ads, and retargeting ads that will expand your reach and take your products and services further. You can also advertise the change in business ownership in your local newspaper or on your local radio station to bring renewed awareness to the brand.

Your clientele is already established. Introduce yourself as the new owner by offering special discounts and promotions to your existing customers. If you’re planning on introducing new products or services, give free samples to garner interest, and ask for feedback–positive and negative–that will help you decide if you should expand your offerings or stick with the products and services that already bring you revenue.

Your brand is already established. If the existing business you’re planning on buying benefits from great brand recognition and has a strong online presence, all it takes for you to keep it going is to regularly post fresh content online to retain the attention of your followers and to connect with other companies for cross-promotions and co-branding in order to increase your exposure.

Your supply chain is already in place. Unlike starting a business from scratch, which would not only involve deciding on a business structure, finding funding, and filing all the proper documentation with the state, but also finding suppliers for your materials and equipment, buying an existing business lets you skip all those steps, bypass the “trial-and-error” phase, and go straight to the fun of running a successful venture of your own.

Negative Outcomes

Deal Studio notes that it’s difficult to appraise an existing business. You’ll have to figure out what made the business a success, and how to keep that momentum going once it changes ownership. Some businesses have valuable assets but don’t generate much revenue, whereas others have fewer assets but generate a lot of money. For this reason, projecting future earnings may be a better way to valuate a small business.

Your equipment and software may be outdated. Buying new equipment will add to your startup costs, and you may have to invest in training, for yourself and for your employees, to learn how to use it. If you’re dealing with older proprietary software, you may have to hire a computer programmer to redesign programs that will work on the newer operating systems found on the market.

You may have to roll out new processes and technologies. If you’re buying an older business, chances are its website is not yet equipped with integrated customer relationship management and enterprise resource planning systems. You’ll also have to update and optimize the website for faster page loading, and to allow customers to buy directly from your site using API banking.

You may have a hard time making it “your” business. Personalize it and make changes that are more reflective of who you are and where you want the business to go. For example, you can redesign the company logo to make it your own. If you’re on a tight budget, use an online business logo creator to design one yourself instead of hiring a graphic designer.

Buying an existing business can be a profitable endeavor. Thorough knowledge of the products and services you’re offering, along with an understanding of social media advertising, will help you grow your company and increase brand awareness as you put your own stamp on it.

Are You Making One Of These 6 Common Mistakes That Many New Business Owners Make?

Planning on entering the world of entrepreneurship in the near future? If so, you’ll be in excellent company. Recent data shows that over 500,000 new businesses are created each month. In the U.S., tens of millions of individuals can currently call themselves business owners. Whether they run a brick-and-mortar or an online boutique, new individuals become entrepreneurs each and every day.

If you’re ready to become a small business owner yourself, there is a steep learning curve ahead. However, certain lessons are more important to learn than others. Here are six common (and preventable) mistakes that many new entrepreneurs make.

Not selecting the correct business entity

Choosing the right business entity/structure is more important than you may believe. Oftentimes, new entrepreneurs will simply stick with a sole proprietorship filing. Although this selection can occasionally be an appropriate choice, it can cost you big time in the long run.

Instead consider registering your business as an LLC, which has a number of exceptional advantages. Among these benefits are tax breaks and reduced paperwork. One of the biggest benefits is the protection an LLC provides your personal finances. In the event of a lawsuit or uncollected business debt, entrepreneurs with LLCs cannot have their personal assets taken from them. Prior to forming an LLC, be sure to review all state-specific rules and regulations.

Doing business “under the table”

A shocking number of business owners conduct business illegally. Home-based business owners — and those with physical locations — will sometimes fail to file the proper paperwork for inspections, a sales tax permit, and a business license.

Even if you plan to run a business as a hobby, do not conduct your transactions “under the table.” While some justify this practice by citing that others do this, make sure that you are doing everything 100% legally. Selling products without proper licensing or inspections can lead to massive fines and jail time.

Not spending enough time on branding

Creating brand awareness among potential customers is critical to separating yourself from the competition. Your website, social media pages, business name, and logo are all essential to attracting and retaining customers.

While some tasks such as web design are best handled by qualified professionals, you can discover unique business names by using a business name generator. You can also use a logo creator online to design an attractive logo. Once you’ve downloaded and customized your logo, you can add it to merchandise, marketing materials, business cards, and much more.

Forgetting to plan for emergency expenses

Just as with your personal life, emergency expenses can (and often do) arise when running a new business. Unexpected fees and broken equipment are only some of the many expenses that can arise without warning.

Avoid having to take out loans or business credit cards by setting aside a separate emergency fund. Plan to save between $1,000-$1,500, as this amount can cover some of the most common expenses. From repairs to anything else that may come up, you can avoid significant financial setbacks.

Working too many hours

Many new entrepreneurs treat their bodies and minds like machines. With so many tasks and expectations, it is common for business owners to work 60, 70, or even more than 80 hours per week. Although this may be necessary at select times, overworking yourself should never become a habit. Just because you own a business does not mean that you’ve developed superhuman abilities. Rest and leisure are as important as they were before launching your new venture.

Prevent burnout by scheduling regular time off and self-care each week. You can create a monthly planner to stay on track with your tasks and schedule downtime as well. There are customizable monthly planner templates that allow you to add your own graphics, sticky notes, and videos.

Spreading yourself too thin

Last but not least, new business owners have a reputation for spreading themselves too thin. On top of working too many hours, they often release a vast product/service list that isn’t defined. If this sounds like you, narrow down your offerings so that you’re selling what you do best. Expand only when you’ve mastered the basics of business ownership.

Avoiding these six common mistakes is key to running a successful business. Beyond this list, treat every other mistake as a learning experience. Rather than getting upset at yourself, learn from every bump along the way.

E-City Beat explores various issues and their effects on Great Falls and Montana residents.