The 3 Habits That Will Save Your Business
We’re finally well into the swing of the new year (good riddance 2020)! New year means new habits that will help you keep your business on track for the next ten months.
Calling Out an SOS
There are three basic habits that we’ll cover that can help save your business when put into practice the right way: Spend wisely, Organize, and Save. Each one is a pretty simple concept but when done together in the right way, it can make a big difference in the way you run your business.
This seems like a no-brainer, right? But what does “spend wisely” mean exactly for your business? After all, your business is unique to you so there’s really no “one size fits all” solution to this. But following some simple steps will get you on the right track:
-Find out what you spent on everything last year (inventory, overhead, employees, etc.) and budget accordingly for this year.
-Trim the fat and cut out any unnecessary or wasteful spending – only you can determine what is unnecessary so be ruthless when it comes to cuts.
-Keep separate spending accounts so the budgets you set for each category (inventory, utilities, etc.) don’t get muddied and “borrow” from each other. Set your budgets and stick to them. If you find over time that adjustments need to be made then do so only after you’re certain there’s a consistent pattern there and not just an anomaly due to unexpected or unusual circumstances. Check out the interview we did with Cyndi Thomason of bookskeep where she talks about keeping separate accounts using the Profit First method here!
Organize (and Stay Organized)
Keeping a business organized is no small feat. Between balancing the books, keeping track of inventory, overhead costs, and taxes it can sometimes feel like a Herculean task. But once you have those things in order, it’s easier to continue to stay on top of them so there are no hidden surprises for you at the end of the year. Some good habits to start if you haven’t already:
-Make sure you check your bank accounts at least once a week.
-Stick to the budgets that you set for yourself for inventory, overhead, taxes, etc.
-Stay up to date on local, state, and federal regulations for Covid protocol.
-Be aware of business tax law changes and modifications.
-Use accounting software like QuickBooks or Xero. If you’re an Amazon seller who hasn’t tried InventoryLab yet, try our no-risk, 30-day free trial here.
-If you can’t make heads or tails of the true state of your business, consider hiring a financial professional to do the initial cleanup.
Save everything! Keep in mind that just because one year ends doesn’t mean that your business documents should be thrown away or shredded any time soon. Some things to keep in mind:
-Receipts, invoices, tax documents, reports, bank statements, and payroll records should all be filed and organized according to tax year (check here to see how long you should keep records and documents for tax purposes).
-Make sure everything is backed up. You can keep paper records, but you should also have digital copies of everything.
-Not sure if something should be saved? When in doubt keep it. Make sure that all paper and digital records are kept organized and up to date in an accessible and easy-to-understand system.
By following these steps you can keep your business organized and running smoothly throughout the year. When it comes to the stress and unpredictability of the holidays and tax season, you’ll be glad you did!