Four Things Most First-time Small Business Owners Don’t Understand

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Negosentro.comWhile it’s true that anyone can start a business, not everyone can run a business. It takes a different kind of person to continue to grow and expand a business after it has launched, and let’s be honest: it’s not that hard to launch a business. If you decide you want to be a consultant today, you can get some business cards and start handing them out tomorrow. The ease with which a business can be pulled from thin air and made into something tangible has been over exaggerated since the internet really took off. This means that many wannabe-business owners are jumping in too quickly, unprepared, and without the right resources, tools, and money. As a result, there are lots of business owners who might have gone on to do great things, but they spent their first kick at the can in business ownership learning how to be a business owner. Here are four things most first-time small business owners don’t understand. 

Taxes

Most small business owners are quick to declare that they’ll “just hire a bookkeeper” and “get an accountant” when tax time rolls around, but there are many things you need to understand on your own before you get into business. For example, the kind of business you set up greatly impacts the amount of taxes your business has to pay – and you have to pay! Yes, as a business owner, the money you take in might get dinged twice by Uncle Sam. It’s up to you to find out how that works and don’t leave it up to your accountant to fix it later on. When starting a business, it’s important that you take the time to understand the tax laws related to your industry as well. If you are going to sell products overseas, you need to understand exporting taxes and laws and make sure you’ve crossed your t’s and dotted your i’s before moving forward. 

Financing 

Because people can start a business on a whim these days, financing is often the last thing people think about. Set up a website on a template site and bam! You’ve got a business! Of course, you need some kind of capital to make your operation run, whether you finance your business startup on your credit card or go to the bank to get a loan. You need money. Many small business owners don’t actually know how a working capital works or what it’s for and continue to just pay out of pocket for small incidentals and licenses and fees as they go. It makes for a greater startup cost and can sabotage your efforts later when you don’t have properly set up systems and savings to draw on. 

Inventory 

You might be pretty excited about boxes and boxes of inventory landing at your doorstep so you can package your products and send them to customers, but you might also find yourself very overwhelmed by trying to categorize, track, and ship all that inventory without having to manually count and keep track yourself. If you are at all serious about your business operation, invest in space and software for your inventory. If you run an online business, look into drop shipping so you don’t have to package everything on your own. These days, there are many reputable companies that can make their products look like your products and it also takes the edge off of having to figure out how to stock, ship, and charge for those products. 

Hiring and Firing

Many small business owners wait far too long before hiring their first employee. They feel like they can do everything themselves. If you are like most, this likely describes you. It also means that you will be overwhelmed with the thought of trying to find someone suitable to help grow your business. It’s likely that you’ll make mistakes in choosing your first employees because the process will be scattered and rushed. Take your time and plan way ahead to make sure you have ample time to properly prepare and execute a new employee search. If you are lucky, you won’t have to also learn how to fire them. 

With so much information available to new and existing business owners, there’s almost no excuse for letting these things slip through the cracks anymore. You’d be hard pressed to find an accountant who would believe “you didn’t know” about the tax laws when that information is readily available at your fingertips, 24 hours a day. The problem with most small business owners is that they don’t want to have to ask the questions until the problems present themselves. Good business owners, however, anticipate that they will likely need to know at least something about these four things before things get too far along. All it takes is a few minutes of research to get the answers you need. Don’t leave things up to chance when it comes to your next great small business idea.