Still feeling a pinch from the Great Recession, but want to make changes in 2013 to better your financial position? Start by taking a look at your business’ finances and make a plan for the next year. Here are five money management resolutions that will ensure a better financial new year.
1. Learn Basic Accounting
Small businesses often start with a passion and an accountant to keep the finances in order. The only way you can truly run your business successfully, however, is by analyzing your financial picture. Taking a course in basic accounting can keep you from falling into one of the many financials traps that can wipe you out of business. Even if you have an accountant, learning more about this area will change the way you view your financial picture and make the time with your accountant more valuable.
2. Understand Your Business Finances
Whether or not you take an accounting class, you need to know exactly where and how your money is flowing. It is critical to identify trends in order to make good business decisions and move your business forward without big surprises. Make sure you understand not just the results of your money, but what each number on your financial statements mean.
3. Protect Yourself By Incorporating
You put a lot into your small business, including risk, but you can limit your personal liability and protect your personal assets by incorporating. A corporation is, in simple terms, a legal entity that is controlled by you. A corporation provides a legal way to protect your personal assets and identity, and has the added benefit of potentially lowering your taxes.
4. Organize Your Taxes Early
Taxes are one of the biggest headaches faced by small business owners. At the same time you are gathering your 2012 tax documents, set up a system to keep track of your tax information for the following year. When you start a new year freshly organized for taxes, you alleviate the end of the year stress of finding paperwork all over the office. Another bonus: many accountants give discounts for getting your tax paperwork in early.
5. Plan for Retirement
More often than not, small business owners do not plan to retire. But the reality is you may retire much sooner than you think. If planning for retirement has been on the back burner, move it to the front in 2013. The sooner you develop a retirement plan, the less painful it is to execute. Don’t simply count on your personal health or the future health of your business to continue to stay strong. You need to have a good plan in place.
Make money management a priority in 2013 by investing your financial education, protecting your personal assets, and planning for your future.