After a detailed study of over 1500 businesspeople in America, scientists have defined seven financial habits of successful small business owners. The results have shown that one out of four has the same seven habits.
Those who practice them consistently perform better than the others, based on annual revenue. Read further to learn what sets them apart from the others!
Improve your financial discipline with these important habits
- Review your finances frequently
This is one of the most important habits when it comes to finances. About 70% of small business owners regularly review their finances by calculating their income and expenses on a weekly and monthly basis.
- Create a monthly budget
On the first day of every month, you should create a budget to estimate your income and expenses. Then, the budget must be compared with the actual results at the end of the month.
Do this every month to become better at maintaining your finances, which will allow you to make decisions based on actual figures!
Develop a money management discipline by paying yourself, the lenders, and the government.
- Save money on taxes
The money you save on taxes doesn’t belong to you, but to the country you live and work in. Set this money aside in a bank account and forget about it.
Ensure that you have all taxes covered or you might get a hefty penalty. There’s a saying that thirty cents of every dollar belongs to the government.
- Pay your debts
Having debt might be a positive thing if you’re trying to grow your business. However, if it’s unnecessary, then the debt can destroy your company.
Clear your pending payments as soon as possible in order to avoid unpleasant situations. You can’t predict when you will run out of money, and you don’t want to have a lot of pending payments on your mind!
- Pay a salary to yourself
A significant percentage of small business owners set a particular salary for themselves that they receive at certain intervals of time. This will allow you to think about your income and business separately, which will keep you focused.
Optimizing your business to pay less
- Optimize your business structure
There are different business structures, such as partnerships, sole proprietorships, and corporations, and every structure has different tax requirements.
Seek professional advice when choosing the best structure for your business, as it might save you both money and problems at the same time. The best structure for you depends on where you live, so you should ask for professional help.
- Take advantage of tax benefits
The tax benefits for your business are extremely important for you as they help you grow while having more money. The deductions will considerably reduce the amount you have to pay to the government.
Many business owners believe that not paying the full sum to the government means that they’re exploiting it. However, it’s absolutely legal to take advantage of tax benefits, if you can.
Moreover, the money you save can then be spent on advertising and expanding your company.
Researchers have found that adopting these seven habits will lead to better results for your business. Get advice from lawyers, accountants, and tax professionals to gain advantage and pay less money where you can. Remember that saving money is as important as making money!
