The life of a small business owner is filled with challenges. Every decision you make has an impact on the financial health of your business.
Building up your small business profits requires smart management, attentive bookkeeping and inspired leadership. But even the best business owners can make critical errors.
Are you making the right decisions managing your small business and its finances? Keep reading to discover three errors you might be making that kill your chances of turning a profit.
#1. Putting Your Business At Risk For IRS Fines And Penalties
Do you know all the mistakes that could lead to profit-draining IRS fines and penalties? Do you have a trusted tax advisor guiding you through important tax compliance issues?
As a small business owner, it’s heartbreaking to have profits within your reach, only to see them wiped away by IRS fines and penalties. Some common tax mistakes that may result in IRS tax penalties include:
Misclassifying workers as contractors rather than employees
Failing to file quarterly taxes on time
Filing the wrong tax documents or filling out documents incorrectly
Another critical tax compliance error you can make is mingling your employees’ withheld payroll taxes with your business accounts. If you do this and fail to pay these payroll taxes on time, you’re likely to face IRS fines.
#2. Not Replacing Employees When Necessary
As a small business owner, you probably have a small staff and think of your employees as family. In real families, you don’t get to choose your relatives. It’s important to remember that in business this isn’t the case.
If you have under performing employees or disgruntled employees who affect staff morale, replace them. It’s never easy to let people go, especially when they’ve been with you for a long time, but it’s important to not let employees hold your business back.
#3. Burning Yourself Out
How many “hats” do you wear at your small business? When is the last time you took a vacation? As a small business owner, you’re ultimately responsible for everything, but that doesn’t mean you have to take on every task yourself.
Burning yourself out isn’t just bad for your mental health – it’s bad for your business. After all, you have to plan for your business’s future, generate new ideas and make solid financial decisions. You’re better prepared to grow your business when you feel refreshed and energized.
Try to delegate tasks where possible. For instance, if you’re trying to handle accounting on top of everything else, you might find it advantageous to outsource this task to an experienced local small business bookkeeping expert.
Put Your Small Business On The Path To Profitability
Avoiding critical errors and making prudent financial decisions helps you achieve the profits you’ve dreamed about since you started your business. To help your business succeed and grow, consider partnering with an experienced small business advisor.