Common Mistakes Small Business Owners Make
As a small business owner, you need to understand what potential you have and where you currently are. To achieve that potential, you need to go beyond number crunching to evaluate the current trends of the market, identify new potential clients and deal with day to day issues of employees and competitors too.
While these aspects will usher you toward success, one of the most critical elements is sound professional advice. With an expert by your side, you will receive reliable information on how to come out of a crisis and even avoid venturing into any precarious situations.
Unfortunately, business owners often misunderstand the importance of financial assistance and end up making some unaffordable errors and accounting traps. As experienced business consultants, Crosby Business and Tax Services Ltd. wants to help you steer clear of any such mistakes, which is why we have compiled a list of three of the most common mistakes small business owners make and how to avoid them.
1. Not keeping proper financial records.
Often new business owners will procrastinate their record keeping because they don’t see the importance of it. They believe it is just a formality that can be done after the income has been earned.
This thinking is critically flawed and one of the key reasons new businesses fail. Keeping your business financial affairs in order provides business owners with the ability to see how they are performing. The ability to make adjustments with business plans, do tax strategy, know profitability can all be assisted with good record keeping. Many owners work long hours to build their business, only to find they have no profits at the end of the day.
A bookkeeper can keep your company in check, provide regular reports on how your business is performing and give owners the tools to make changes or take actions to curve potential losses.
2. Setting improper goals.
Presently with the current economic environment in Alberta, many businesses are formed out of the necessity to provide for oneself or family. As a business owner, you get up and go out, put in many hours and find yourselves marginally better for doing so.
However, you might lack basic planning, which then may result in wasted time, added stress, and maybe failure. You need to hire professionals to increase your chances for success. It is essential to hire an accountant who has the experience and knowledge to help you set goals, budgets, and provide guidance through the critical startup period.
3. Faulty tax planning.
Many new business owners do not understand how to read financial statements and believe that lack of cash flow equates to no profit. This trap leaves them vulnerable at year-end with unexpected tax obligations and no means to deal with it. You can avoid this common mistake by working with your accountant to track your progress during the year, allowing you to be better prepared for what to expect. When you correctly understand how you are doing the ability to make better-educated decisions for your business future is easier.
To avoid these and other mistakes, reach out to the experts at Crosby Business and Tax Services Ltd. As experienced business, tax consultants in Calgary, AB, we work with small business and make sure that the financial decisions they are making, make sense in today’s market. Our Business and tax consultants specialize in providing wealth management, tax consulting, tax preparation and planning services across Airdrie, North East and North West Calgary.
Our primary focus is to work one-on-one with owner-operators and professionals, and we take great pride in helping a business grow, and get through a recession. For a complete list of services, please click here. If you have any questions about small business and tax, we’d love to hear from you. Please contact us here.