Keeping your profits organized when running a small retail business can be a daunting task. Most small businesses never survive for long in the market because they either don’t make profits or run into losses from year to year.
According to small business data compiled by the Bureau of Labor Statistics, 20% of small businesses fail during their first year, and up to 50% will have gone out of operation in their fifth year.
As a small retailer, there is no better time to start keeping your business finances and profits organized than now. The following tips will help you keep your profits organized.
Keep Track of Your Business Expenditure
Using financial planning software is a must if you want to keep track of your business expenditure. Financial software such as Intuit QuickBooks Online helps you capture all nitty-gritty financial details, so you avoid running into losses. Tracking expenditure also helps you cut down on unnecessary costs and know what profit to expect.
In order to ensure all of your business transactions are recorded, consider hiring outside help from an accountant or make sure you have an on-site financial advisor. Keeping track of finances can be an overwhelming and difficult task for anyone who isn’t experienced.
Separate Business From Personal Finances
Mixing up personal and business finances is a sure way to wreck your business. To avoid making this mistake, make sure that you have a checking and savings account that is strictly used for business purposes. Using high volume accounts can help you handle your clients’ business payments, so you avoid mixing them with personal finances.
Open a bank account that is specifically used for businesses. This will prevent your banker from suspending the account due to high use.
Get a Professional to Help You Prepare Your Taxes
A retail business must file annual tax returns. Get a financial advisor who will help you organize and pay your taxes on time to avoid penalties that fail to comply with tax requirements. Getting advice and help on paying taxes helps you to focus more on profit-making.
This will also help you make sure all documents and records you need for filing taxes are gathered throughout the year. It will make the process much easier when tax season rolls around.
Stay One Step Ahead When Repaying Your Debts
Always repay loans on time to avoid additional penalties due to late payment. Make a plan on how you are going to refund any business and personal debts. Also, it would be best if you avoided overborrowing.
To avoid overborrowing, make sure you have sufficient funds when you initially start your business. Consider starting a fundraising campaign to get started and avoid getting into overwhelming debt.
Organize and Review Your Business Plans Each Week
Set aside some time each week to review your finances and business plans. Take some time to think through important business decisions. Do you want to add more stock? Do more aggressive marketing? No problem. Only make sure you are not going to incur losses in the process. Come up with a schedule to make sure you realize every decision on time.
Having a trusted financial advisor will be very helpful for this step. You can make regular appointments to thoroughly go over the above areas of your finances.
Keeping your retail business profits organized requires commitment. Otherwise, it’s easy to fall off the bandwagon and become unproductive. Making sure your finances are in order will be crucial for your small business’s success. The tips above will come handy in helping you grow and sustain a profitable retail business.
Emma Sturgis is a freelance writer based out of Boston, MA. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2