Beating The Odds: 3 Ways To Ensure Your New Business
Business Success, It’s a scary fact that nine out of ten new businesses fail in their first year. But that also means that one out of those ten new businesses makes it. What sets these successful ventures apart from their less-successful counterparts?
According to successful entrepreneurs, the difference is that a successful entrepreneur treats their business as a business. This focus ensures they capitalise on tax breaks and deductions, and keep more of their hard-earned profits. If you’re not tracking your business, you’re not setting yourself up to succeed.
To get your business started on the right track, the first step is incorporating, which lets you take advantage of numerous small-business tax benefits. Regardless of how you file your business, your income from it is taxable.
You are not going to get any tax breaks for filing as a hobby By law, you have to report every pound/dollar you have sold to the HMRC/IRS. That means it’s in your best interests to structure your business as a legal entity and capitalise on the tax breaks that doing so affords you.
It is a simple process that can save you a lot of money down the road, you can even do it online with our Buildily Formation service
Getting on Track
The next step is tracking your cash flow. Look at any expenses in your daily life that are actually being used for business. All those things add up…and can reduce your tax implication. Maximising the deductions you are permitted can amount to substantial savings:
Website maintenance costs.
Business-related auto mileage.
This is one of the biggest deductions business owners fail to track as it pays to record your product sourcing outings, trade show trips, client visits, etc. Watch where you are spending and where you are profitable, so you know what is working and what needs work.
You can track your expenses easily using accounting software, with visit our marketplace
Playing It Safe
Lastly, you need to back up everything with documentation. With an internet business, most of your transactions occur online, so it’s important you print them out and keep good records.
You should have records for four years the current year and three years prior just in case the HMRC/ IRS ever have any questions. Even if your deductions are perfectly legitimate, you need to have the receipts and paperwork to prove it, or they can still come after you for back taxes. By documenting your profits and expenses, you are really just protecting yourself.
No matter how new or how small your online business is, it’s never too early to start treating it like a business. You want to start keeping good records from Day One. Getting legal and getting organised aren’t nearly as intimidating as they sound, and they can be the difference between success and failure.