The Most Daunting Financial Struggles for Starting Businesses in 2013

Starting a new business can be a daunting task under the best of circumstances. Starting a business in 2013 can be downright intimidating considering all the intangibles in the marketplace. Taxes, healthcare, employment, interest rates, consumer confidence and the list of well-known economic parameters in constant flux continues. Operating a business in the best of times also involves serious financial decisions and those same decisions today can result in serious difficulties and struggle for the businessman trying to stay afloat.

At the top of the list of “what’s going to happen next for new businesses?” are taxes, fees and healthcare. It’s hard to plan for a fiscal operating year not knowing fully the tax rates, matching contributions, healthcare premiums and operating fees will be and how to plan in advance meeting these obligations. Even very small one-person self-employment operations must expect the inevitable hit from the government in order to operate. But how much that hit (or hits) will entail is a constant guessing game. The best option is to plan for the worst, set aside as much as possible in anticipation of increases and with hope breathe easy when there’s enough to cover all the accrued payments.

Another financial concern when times are tough is obviously getting paid. Inevitably, when times are tight people immediately try to extend their obligations and pay as little as possible for orders completed. Although no business owner wants to be nasty and lose customers, no one benefits if the business goes under because there’s no cash in the bank while the receivables book is filled with money owed. Balancing both accounts and C.O.D. work can be stressful but is necessary in order to operate. Don’t hesitate demanding deposits and always be clear and forthright about terms. It’s curious how some customers think nothing of paying immediately for groceries or gasoline but feel it’s OK to expect long terms for payments from a new vendor providing needed products. Well, the best cure for a cash flow problem is . . . cash. Be sure to collect and say “thank you!”

On the other side of the coin are vendors who provide materials and services to keep the business operating. More than likely they are in the same boat. Although it’s great to get today what can be paid for tomorrow after the order is complete, this is not always possible, especially for new businesses with no credit history. Before starting a new business of any size, be sure to have the capital in the bank necessary to cover expenses for at least six months if not a year or more. Never forget it takes money to make money and having enough money is what ensures making it to that second year. If in doubt, it is always a great idea to seek help from professional accountants to assist you in planning for the realities of starting a business in 2013.


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