6 Financial Steps To Take Before Starting A Business

The thought of starting a business is exciting. For many, it’s the American Dream. Entrepreneurs want the freedom of setting their own hours, being their own boss and leaving a legacy for their children. It’s important to note that while exciting, starting a business also can be stressful. According to the Small Business Administration, one-third of all businesses fail within two years, and two-thirds of all businesses fail within 10 years. Considering these stats, it’s important to have a plan in place to be successful. Here are six financial steps we think you should take before starting a business.

Do Your Research
Make sure you thoroughly understand the industry you are entering and the need for your products or services. Do a complete market analysis or feasibility study to determine who the major players and competitors are. The Southwest Ohio Small Business Development Centers are a great resource for help with this.

Know Your Purpose
Spend some time reflecting on why you want to start your business. There will be bumps in the road, so it’s important that you have a mission and purpose to ground you during trying times. What goals are you trying to accomplish? What does success look like? What are you willing to risk?

Identify Your Target Audience
Understand who needs the products you sell or the services you provide. You can’t earn a profit without your customers, so know them well. What is their age, geographic location, income or profession? What are their pain points?

Choose A Legal Structure
Determine which business structure is right for your business. Will you be a sole proprietor? An LLC or an S Corp? You may want to consult with an attorney or the Small Business Administration for advice. And while you’re thinking about the legal aspect of your business, make sure you know the laws that apply to your business. Will you need a permit or some type of license?

Decide How You Will Finance
You will need money to start your business because you probably won’t make a lot of money right away. Will you be self-funding? Applying for loans or grants? Seeking out angel investors or venture capitalists? Research all of your options and determine the one that’s best for you.

Create A Working Business Plan
A business plan is your business’s roadmap, and will include such things as your mission statement, description of your business, market analysis, key players, budget and more. It should be a working document, not just an exercise that is filed in a drawer. One of the first questions most consultants will ask you before working with you is if you have a business plan.The Southwest Ohio Small Business Development Centers can also help with this.

Once your business is up and running, you’ll need a partner to help handle your payroll, tax help and other concerns. Donohoo Accounting Services is here to support you. From financial issues to tax concerns, we can answer your business questions that will help to make you a success. If you would like to learn more about the services we provide, schedule a complimentary consultation with us by calling 513-528-3982. For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

8 Tips To Help Your College Student Budget While At College

College life is full of opportunities and experiences, and your child may be tempted to indulge in all of them. While it’s important to make the most of the college years, you don’t want your child going broke or buried in debt while doing it. Fortunately, there are a few budgeting strategies and tips you can teach your kids that will help them manage their money now and in the future.

Have The Money Talk
Keep the lines of communication open so your child knows how her education is being paid for. Whether it’s a 529 plan, scholarships or loans, make sure your student has transparency as to how much money they have and the approximate expense.

Anticipate Your Expenses
Make a list of the expenses your student can expect to have during his years in college. Tuition, room and board, and textbooks and not the only things to consider. There is also transportation, clothing, rent and utilities (if she is living off campus), and spending money for items including her cell phone, dining out with friends, travel, gym memberships or entertainment purchases.

Determine Fixed Versus Variable Expenses
Help your child understand that his fixed expenses are those he usually can’t avoid, such as room and board and tuition. Variable expenses are typically wants instead of needs, and can be reduced or eliminated if money is tight. 

Establish An Average Monthly Cost For Each Expense
Take a look at your child’s past bills to help her figure out how much each expense costs every month. If a particular expense fluctuates from month to month, calculate the average and plug that into your student’s budget.

Track Your Spending
Encourage your child to set aside some time each month to record his spending and compare it to the money he has coming in.

Adjust As Needed
If your child is outspending his income, he will need to adjust those variable expenses to keep everything in line. That may mean reducing spending on fun activities, like dining out with friends, concert tickets, or other entertainment. It’s not pleasant to pass on those things, but it’s good self-discipline for later in life. If he complains, explain how he can work additional hours at his job or apply for additional scholarships to cover unnecessary expenses.

Use An App
Have your child research free budgeting or money-management apps. These tools are an easy way to track his spending.

Take Advantage Of Student Discounts
Many businesses will provide special pricing and deals for college students, such as discounts on computer software, shipping, food, clothes and more. Always ask a business if student discounts are available.

If you have questions about saving for college or helping your child budget, contact Donohoo Accounting Services. We are dedicated to helping our clients with their financial and tax issues, and would be happy to get your child on the right financial foot. Contact us today to schedule a free consultation! For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!