Conquer the Necessary Challenges of Owning a Business
Owning a business is an incredible experience that encompasses many risks, returns and responsibilities. Whatever money is going out will weigh on you, as will working toward more money coming in. Business owners feel their own internal pressure to succeed, as well as carry the privilege and stress of being responsible for the livelihood of others.
No matter the industry, no matter the location, a few certainties come with owning a business and rarely are they an owner’s passion. While you can hire others who are specialized to perform these tasks, there will always be a level of involvement from you as the decision maker.
Here are the three most common necessary evils of owning a business, and a few ways to combat them.
Your business needs skilled employees so you don’t have to do all the work yourself. The actual process of hiring employees though takes a lot of time. If you’re large enough to have an on-staff HR or recruiting department, you can leave a lot of the job posting, applicant screening and background checking to your HR staff. If not, you’ll need to spend the time to write job descriptions, post them to job sites, sift through résumés, schedule interviews, conduct multiple interviews and try to find the perfect candidate for the job.
The Small Business Majority published an opinion poll in November 2014 which states 56 percent of small business employers struggle to find candidates with the right kind of job experience, and 54 percent say they struggle to find candidates with the right education, skills or training. What’s even more insightful, the Center for American Progress analyzed multiple studies from 1992 to 2007 and reported the average domestic business spent one-fifth of an employee’s annual salary to replace that individual when he or she left the company. So while hiring might take some time, turnover is even more costly.
What’s the solution? One very viable alternative to hiring — at least in the short term — is contracted work. The process of onboarding and terminating freelance or contracted workers is much more straightforward and simple compared to employees. While your contractors might not feel as invested in your business as your employees, the taxes, setup and paperwork are much easier to handle for contracted labor. Also, you might be surprised how good and invested most freelancers. Since their income depends on their quality work for you and their reputation with clients like you, more often than not they’re incredibly dedicated. Check out sites like Elance and oDesk to find quality candidates in your area.
Big challenges and primary responsibilities for a business owner include bringing in new clients, boosting sales and closing important deals, and this doesn’t even address collections. Book reconciliation and handling accounts payable and receivable have to be done regularly or you won’t have the cash flow necessary to stay in business. Getting contracts executed, invoicing and tracking down payment are necessary evils but they don’t have to be painful experiences.
If you don’t have an accounting department, one potential solution is to streamline as much of the process as possible. Online invoicing and reconciliation software can automate a lot of the labor-intensive aspects of billing, like invoice creation, sending payment reminders to clients and reconciliations. Check out options like Freshbooksand Intuit Quickbooks to see how they can help tame the billing process.
When you own a small business, there are a myriad of taxes due both annually and quarterly you will be responsible for filing. If you have any employees, you’ll also need to make necessary payroll taxes to both the state and federal government. Furthermore, there are often taxes associated with your local municipality for licensing your business. Keeping track of all the dates and regulations can make any business owner’s head spin.
Instead of spending your valuable time trying to sort through tax filings and requirements, partner with an accountant. An accountant will work with you and your billing staff to ensure you’re paying the right taxes at the right time and for the right amount. It’s worth the expense to hire a professional — you’ll have peace of mind that paperwork and tax filing is in good hands. When you have a great accountant, he or she becomes a long-term partner devoted to helping you and the business succeed. Look for a certified public accountant in your area by searching the AICPA website and by reading relevant listings of consumer reports.
About the Author
Matthew Toren is a writer, @entmagazine award winning author, entrepreneur, growth hacker, advisor and investor. He is the co-founder of YoungEntrepreneur.com.