Top Five Financial Secrets that Every Small Business Needs to Know

Running a small business is not easy, no matter what anyone tells you. Starting a company of any size means learning a lot of different concepts, from management to business tax, and everything in-between. Wearing so many different hats means learning on the job and juggling as you go, but it can be done.

That being said, many small businesses don’t last. Most have a lifespan of two years, with a shrinking number of companies caving after the five-year mark. They simply could not maintain healthy enough profits to warrant staying in business.

Small businesses, however, run the economy. They are critical to the local employment percentage, and they are what makes a community unique. That is why all small business owners need to use every trick up their sleeve to manage their finances right from the start.

1.   You Have Over 20 Tax Deductible Options

Small businesses have 20 great tax-deductible options, and more depending on which industry you are in. From car and truck expenses to salaries, to contract labor, supplies, depreciation, rent, utilities, insurance, repairs, and so much more. Making use of these critical deductibles can help you reduce the business tax you owe substantially, and help you manage ongoing expenses.

2.   You Can Form a Cooperative to Benefit from Bulk Discounts

Large businesses save money per unit on items they ship in due to bulk discounts. In most cases, small businesses could never afford nor store the amount of product you would need to buy to benefit from a bulk discount from the manufacturer.

The way you can make use of these discounts is to form a cooperative with other small businesses in your area. This way you can all benefit from the discounts by combining your purchasing power.

3.   Never Mix Business and Personal Expenses

If you are struggling personally, never take money out from your business. Doing that complicates your tax situation and can weaken your business. If you need money, even if you have a bad personal credit score, then it is always better to take out the small amount you need. You can take out a loan with bad credit online, pay off your emergency, and keep your business expenses separate from your own expenses.

4.   Streamlining Your Business is the Best Route to Cost Savings

If you need to increase your profit margin, the best way is to improve the efficiency of your business. This could mean investing in better training for your employees so that they can handle more workflow and you can reduce your overhead. It could also mean reorganizing so that tasks are done faster.

There are many ways you can streamline your company. Try talking to your employees to see what they suggest to start.

5.   You Might Apply for a Small Business Grant

Last but not least, there are a variety of small business grants you could apply for. Unlike a loan, these grants are provided to businesses who offer a service that is necessary to the community.

Knowing these top five financial secrets can help you create a profitable business that does wonders for your family and your community.