Every small business should have a formal written business plan to help with decisions
and strategic planning. If you don’t have one this year, or if your plan hasn’t been updated in a long time, now is a great time to consider writing or updating it. The process of putting your goals in writing will help you focus on long-term business objectives and the steps needed to achieve them.Business planning also can help identify current or future obstacles so you can better anticipate and avoid potential
In addition, a business plan might be helpful for obtaining business financing. For example, lenders might require a formal business plan for a Small Business Administration loan, some larger business loans and lines of credit. Wells Fargo offers a free, online Business Plan Center that includes a tool to create or update a written business plan.
As a small business owner, you’re responsible for filing your business taxes on a quarterly basis. If you don’t already, establish a separate bank account and use it to set aside a monthly amount toward estimated taxes.
Also, keeping business checking and credit accounts separate from personal accounts can help you maintain accurate and complete records of all business-related income and expenses, and can help plan accordingly for when tax payments are due. If you’re unsure about your estimated tax obligations, consult a tax specialist. They can also help you properly track and record your earnings and deductions.
Recharge Cash Flow
Business owners know there are two essentials to keep a business running: profits and available cash. One best practice is to check your business cash flow every week. Focus on the timing of income and expenses to identify potential gaps and plan ahead to determine how much cash you’ll need to cover potential challenges. Nearly every small business will face a time when it needs more cash than it has on hand. You might want to consider a business line of credit to help bridge any gaps your business encounters in cash flow. For instance, when taxes are due, you might want to use a line of credit to help keep cash flow constant and cover ongoing expenses, while paying down tax debts.
Consider making time to meet with your banker for a financial review that includes an assessment of your credit needs. A banker can walk you through the available business financing options and help you choose the proper ones. Remember, the more you talk about your business, needs and goals, the better guidance you’ll receive.
Whether summer is your busiest time of year or your slow season, it’s a good idea to conduct a mid-year financial review. Taking time now can help you stay ahead of the curve and make the most of the remainder of the year.