Starting a small business is a risky endeavor. According to the Small Business Administration, the vast majority of new companies fail within the first eighteen months. Only half will make it to their fifth year and only a little over a third will make it to their tenth anniversary. There are several reasons business fail, but some of the most common reasons are:
A lack of capital
Spending too much, too soon
Quick growth coupled with a lack of planning
Then, when you add in the challenge small businesses face keeping on top of government rules and regulations, it’s no wonder why so many small businesses struggle. Working with the right accountant can help to alleviate some of these problems and set you up for success in the following ways.
From the beginning, a CPA can help you formulate your business plan. They also can give you the advice you need regarding what business entity works best for you. Many small businesses start as a sole proprietorship, but depending on your circumstances, another type of business entity might be advised.
An accountant is also aware of the different requirements that your state and city may have for businesses. Your business might need a sales tax permit or special business licenses and an accountant can help with this so you can be sure there are no surprises down the road.
Having a seasoned CPA set up your books will keep your business on track. When your accounts and books are set up correctly, your reporting will be accurate. With the proper systems in place and good reporting you will know where your business stands financially. Your accountant will be able to analyze those reports and is familiar with spotting the financial red flags that business owners may not be able to see and provide a plan to minimize risks and maximize opportunities.
Having the advice of an accountant can help you as your business grows. With proper advice, you’ll know if it’s the time to expand your workforce or open a new location. With the help and advice of an accountant, you’ll be able to see the future implications of any decisions you may make.
Working with an accountant shouldn’t be hard. It should ease your burden, not add to it. Every business owner needs an accountant who is client-focused, knowledgeable, experienced, attentive, and who provides expert business guidance. If you haven’t yet found the CPA who is a perfect match or your business, we invite you to contact us.