Millennial Money: 5 Steps to Improve Your Side Business
The pandemic does not crush entrepreneurship. He feeds it.
People, typically strapped to desks or working in two shifts, often used blockages to trigger sideways fuss when needed. And some have turned these side concerts into a full-fledged business.
According to the US Census Bureau, 427,842 new business inquiries were submitted in August 2021 alone. That number was 288,026 in August 2019.
Side gigs can be voluntary, but growing a legitimate business takes research, planning, and organization. Otherwise, a fledgling business could collapse and burn in a few years.
These basic but essential steps will help take things to the next level and give new businesses a chance to stay strong.
1. Select a business structure
There are six general types of business entities: sole proprietorships, partnerships, limited liability companies, C companies, S companies, and limited liability companies. The options you choose will determine how your business will be taxed and who will be financially responsible if your business is sued.
Entrepreneurs are often referred by default to Sole Proprietorships as they are the easiest, yet the riskiest, corpnet.com is a document filing service that helps streamline the entrepreneur’s business start-up process. Nellie Akalp, CEO and Co-Founder, says.
âNo registration required, no business requirement,â Akalp says. However, “because he is not legally separated from the company, the sole proprietor is personally liable for the debt or liability.”
Registering as an LLC or corporation is more expensive and requires more paperwork, but it protects your personal assets from lawsuits.
2. Open a professional bank account
Mixing work and personal finances can be tricky, especially when it comes to filing taxes and getting business loans. Open a business checking account to easily organize and access your business income and expenses.
Find a business account that meets your business needs for transaction and deposit limits, with little or no monthly fees.
Business credit cards can also help you track your spending and identify tax credits. Plus, you’ll get perks like cash back on gasoline, office supplies, and business consulting services.
3. Upgrade accounting
No more manual spreadsheets or shoeboxes full of receipts. Upgrade to accounting software that can do some of the tedious tasks like tracking cash flow, managing invoices, and generating reports.
Expect a learning curve in the new system, but be aware that it helps make things run smoother. The right accounting software can also give you a deeper insight into your business and help you identify weaknesses and opportunities to save money.
âAccounting is a language of business, so take the time and money to figure out how to make a book,â said Money and Mimosas, founder of Money and Mimosas, a financial education platform for independent entrepreneurs, freelancers and small business owners. Danetha Doe said. âAs a business owner, learning to manage your business finances, reading your income statement, and understanding your cash flow will make you a better entrepreneur. “
4. Explain the business plan in detail
Your side business may have started organically, but turning it into a full-fledged business takes research and planning.
Outline short and long term goals for your business, along with sales plans, financial forecasts, and potential roadblocks. Be realistic, set specific goals, and make your plans to achieve them.
Creating a business plan gives you a roadmap for growing your business. It also shows lenders who did their homework if they needed to get a business loan.
Need help with your business plan? Please contact your local SME development center. These outposts are operated by the US Small Business Administration and offer free business consulting services.
5. Invest in professional help
Entrepreneurs basically wear several hats. But you don’t have to wear all hats.
Outsourcing certain aspects of your business allows you to focus on other things such as customer service and product development.
Are you hip-hop on social media? Consider hiring someone to develop and manage your business presence on Instagram, TikTok, etc.
Are income tax returns crossing your eyes? Invest in an accountant and apply.
“Chartered accountants may cost more than paying taxes themselves, but they’ll do it right,” says John Pham, founder of The Money Ninja, a personal finance website. âPlus, tax credits are maximized, which can lead to higher returns than the cost of an accountant. “