How to Set Up a Small Business with a Small Capital

Starting a small business entails a lot of thinking and planning since faulty ideas, start-up capital, and monetary issues have led to a huge percentage of small business failures. Successful small business owners all too well that businesses should begin with small expenses in order to succeed. By keeping such expenses under strict control, there’s a good chance a small business to make huge profits in the long run.


Photo: Flick’r Dean Myers

Here are some ways to help you start a small business with minimal capital:

  1. Be knowledgeable of today’s business

Adequate research and a good knowledge of the latest business trends are a representation of essential requirements for a profitable small business. While there are certain business consultants who charge a lot of money to conduct such services, a successful business owner utilizes a number of hard copy and online sources to look into business requirements, determine possible competitors, and make start-up assumptions. Some businesses, such as medical and tech firms, require a huge capital and can’t be launched cheaply. There are other companies that lets entrepreneurs start off a small business with minimal capital.

  1. Maximizing Open-Source/Free Resources

A majority of success in today’s business depends on a consumer’s view in terms of company size. While commercial resources employ costly integrated voice response phone systems and virtual conferencing, there are other efficient resources available for free via open-sourced channels over the internet.

For instance, Google Voice lets small businesses acquire a phone number and create a big business phone image free of charge. On the other hand, Google Wave lets business personnel conduct virtual office meetings, collaborate on projects, and share documents. A plethora of open-sourced apps today lets small business owners create quality documents, spreadsheets, and presentations for free.

  1. Pay attention to cash flow

Know the essence of cash flow and recognize that poor cash flow can lead to failure in any small business. When certain big customers make an order placement, they typically hand out a purchase order as opposed to a pre-paid transaction. You’ll need to gain the required items, keep them stocked, processed, and have the order send prior to any payment. One thing that can really help cash flow is the astounding number of tax benefits that the business owner gets from the IRS.

Payment may take up to 60 to 90 days. Initially, you’ll need to foot the bill on the items and tie useful cash to be utilized for other essential business operations. Keep track on any cash flow or expenses to ensure your small business will remain profitable.

  1. Setting up a website

With a huge percentage of the world having access to the internet, small business owners shouldn’t ignore the power of a well-made and professionally designed website. While there are web designers that charge a lot for setting up a site, there are a plethora of free tools available that can create attractive web pages in a cheap and simple manner.

Certain open-sourced apps lets users craft a professional site with little effort, and there are even some that have a direct interface with e-commerce bundles that process internet-based sales. Utilizing an open-sourced app to create a web page minimizes expenses related to making an online presence. At the same time, business owners can find a dependable web hosting at an affordable monthly cost.

Regardless of the kind of small business you have, a little of bit of cash is necessary. This is due to the fact that it plays a big role in today’s business. The good news is, there are numerous small business opportunities available that involves a small capital. By playing it smart and being efficient with startup costs, small businesses will eventually be rewarded with profits in the long run.

5 Things Small Business Owners Should Do During Tax Season

Tax season is already stressful for a person dealing with personal finances. But when it boils down to finances of a small business, it can be highly stressful. Just like you would typically deal with your own finances, your current small business will need to be ready for that time when business taxes are due.


Here are some things to help your small business be ready when tax season comes around:

  1. Organize your books and records

This process entails gathering your previous tax forms, expense receipts, invoices, bank statements, and other pertinent documents for bookkeeping. Organizing your records should happen way before tax season hits. Secure your receipts in one area. You can even convert your receipts digitally, but keep your original receipts in case something goes wrong with your PC. Making use of file binders or cabinets to keep your documents can be of big help when you need to file taxes.

  1. Keep in touch with your tax advisor

Regardless of how long you’ve been doing taxes, when it boils down to any small business, you’ll want to have a tax advisor look into your taxes before submission. They’ll help you by getting the necessary tax deductions you’re qualified for and hopefully save your small business money along the way.

  1. Gather the necessary documents required

When it comes to your employees, you’ll need to hand out their W-2 forms by the end of the first month of next year. You’ll also need to send them to the Social Security Administration (SSA). The W-2 indicates the overall earnings that were paid and the withheld taxes from the previous year.

Aside from the W-2, you’ll need to submit a W-3 form before February closes. The W-3 form basically indicates the overall W-2s. For workers making at least $600 in the past year, you need to have kept track of certain things from the previous year. Possessing W-9 form records — business licenses and certifications of a contractor — can aid you in getting the 1099-MISC form ready for those contractors. The form should be sent to the contractor by the end of January. This will highlight payments made by each contractor.

  1. Do research

Doing so will help you determine the kind of deductions you can use and see if any write-offs is applicable to your small business. This may include anything from the latest equipment purchase to your company vehicle. One deduction you haven’t thought through is business insurance. In certain business insurance policies, insurance premiums may be factored as a business expense and are considered to be tax deductible.

  1. Make paperwork a priority

You have a lot on your end when it comes to running a small business. You may be tempted to prioritize less on your financial paperwork. It’s important you look into your tax issues in a timely manner. Missing out on a specific file date will lead to penalties and accumulation of back taxes. Putting off your back taxes can snowball the situation up to point you’ll be overwhelmed with tax debt. It’s best to stray from tax liens, wage garnishment, and other fines by making the right payment prior to the deadline.

Tax laws are complex for anyone especially for small business owners. They may, at times, seem like impossible to comprehend. In addition, a tax error can lead to severe consequences. Whether you have plans on collaborating with a tax consultant or you’re confident enough to file taxes on your own, you’ll need to keep the previously mentioned tips in mind to ensure the financial future of your business.