With the economy beginning to hum again, 2014 is a great time to start up a new business. Of course, with a small business, every penny counts. We hope for the best but plan for the worst. Finding ways to keep your money in your pocket is a good way to stave off the worst that can happen in a small business.
Look For The Breaks
Both federal and state governments offer tax breaks and incentives for small business ownership. Depending on the need, some of these can be significant. For example, Kentucky offers a small business tax credit of up to $5,000. This is a nonrefundable credit, meaning you can deduct it from your state taxes but, if you make no money in that year, you will not get $5,000 back. There is an application process and the fund is capped at $3,000,000 per fiscal year statewide.
Pay Yourself First
Novelist Douglas Coupland said lottery tickets are a surtax on desperation. Do not let yourself become desperate and make mistakes, relying on chance to get you out. Make sure your business is, at the very least, taking care of you. Wells Fargo Bank recommends creating a budget with your salary or savings amount as an expense.
Know Your Worth
If you are going to pay yourself, then you need to know how much to earn. As small business owners, we repair the broken, clean the dirty and add the unaccounted. This is where a personal break-even analysis needs to be made. If your sales skills allow you to bring in new contracts worth $100,000, then doing the job of an $8 per hour employee is not cost efficient. If you are the lead baker, then it is your job to bake. Anything else may be diminishing your net return. Look at the U.S. Bureau of Labor Statistics for salary amounts broken down by state and industry.
Market On The Cheap
About two-thirds of small businesses have less than $2,000 allocated to its marketing and advertising budget. Social media marketing is a good way to get your message out without breaking the bank. Since your business is new, people you know will actually want to hear how things are progressing. Use Facebook and LinkedIn to do your marketing in a conversational manner, inexpensively.
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