You were likely filled with excitement when you decided to become a mom boss and launch your first business. However, it is easy to feel deflated when you’re failing to generate a large revenue.
It is important to remember that many small businesses don’t earn a profit within their first year.
Rather than throwing in the towel and returning to your old career, look for ways to lower your overheads and improve your profit margin.
Help your business to reach its potential by reading the below advice on how to survive your first year.
Keep Your Costs Low
Many businesses often fail within the first year because they run out of money. Don’t follow in their footsteps by keeping your costs as low as possible.
For example, you could avoid renting an office space and work from home instead, which will lower your expenses while allowing you to spend more time with your family.
You also could outsource people over hiring permanent members of staff, and you must establish a monthly budget and routinely switch vendors to maximize your finances.
Lower Your Tax Bill
The Internal Revenue Code was created to provide both individuals and companies with tax breaks. Rather than handing over your company’s hard-earned money to the IRS, you must look for ways to lower your tax bill.
For example, you could donate monthly to a 501(c) (3) organization, like the Red Cross, which will be fully tax-deductible. You also should add the cost of equipment, travel expenses, and inventory into a bill to save a substantial amount of money.
An Emergency Fund
Unexpected costs could damage your bottom line and place your business in financial jeopardy.
It is an intelligent idea to build an emergency fund in your first year of business. As a result, you’ll have the money available to pay off a bill without damaging your credit score or to quickly buy a computer when your existing one breaks down.
A rainy-day fund will also provide peace of mind that you’ll have money to spare should the worst happen.
Avoid Financial Liability
While a sole proprietorship might seem like the natural option when starting a small business around your family, you might regret your decision in the future.
For instance, if a customer or client chooses to sue your business, they will be able to collect a sum from your personal finances.
Rather than inheriting your company’s debts, reduce your financial liability by starting a corporation.
While it could allow a board of directors to fire you in the future, both you and your family will be protected from a lawsuit.
Learn more about the different business structures available to ensure there are no serious repercussions for your loved ones.
Don’t allow money worries to stand in the way of your company’s potential. To survive your first year and generate a profit, you must look for ways to lower your business expenses and improve your financial security.