What is one financial to-do item young entrepreneurs should cross off their lists during the first quarter of 2014?
The following answers are provided by the Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
1. Fund Your Roth IRA
A Roth IRA is essentially free money, and everyone who is eligible should fund his immediately. The longer the money is in there, the more it’ll be worth once you retire.
– Josh Weiss, Bluegala
2. Offload Your Bookkeeping
Whether you use an external firm or have an internal bookkeeper, it’s one thing that you can hand off to someone else to free up your time while still staying on top of these incredibly important metrics. As a business owner, you need to know you numbers, but you don’t need to be the one in charge of putting the data together.
– Patrick Conley, Automation Heroes
3. Have a Budget Projection
When I first started, my only financials were the tax returns of the company. As we added people to the team, I realized that the budget projections for the business tell a story. People can align themselves and their activities behind them even if the budget is wrong. And guess what? Most projections are wrong. What’s important is how the team creates and updates them as things change.
– JT Allen, myFootpath LLC
4. Find a Trusted Tax Partner
Find a tax professional who understands startups and who can help you minimize your taxes and hold on to as much profit as possible. You should look for someone with extensive experience with early-stage companies and guaranteed audit support. A tax professional who can find all potential tax credits for your company and whom you can trust to manage the tax process is invaluable.
– David Ehrenberg, Early Growth Financial Services
5. Address Healthcare Reform Issues
Like it or not, healthcare reform is here, and if an entrepreneur hasn’t already addressed the implications to his business, he needs to ASAP. For a lot of small businesses, costs are increasing dramatically. You need to be prepared for it and understand the financial costs associated.
– Andrew Howlett, Rain
6. Get a Financial Adviser
A good financial adviser can really help young entrepreneurs safe guard their own future. Often, as business owners, we see our personal wealth and the success of our businesses as one an the same. A financial adviser can help you really start to plan for your own personal financial stability even if your company takes a down turn.
– Laura Land, Accessory Export, LLC
7. Put Some Money in Your Pocket
It’s not always how much money you make, but rather how much you save. Make sure you have extra cash on hand for your business because the unexpected will happen, and you need to be prepared for it. Cash flow is the lifeline of a business, and your business could very well fail if you run out of cash.
– Andy Karuza, Brandbuddee
8. Communicate Sales Goals
Make sure you communicate right at the start of the new year what your team’s sales goals are for the year, each quarter and even each month. It’s valuable to communicate these key milestones to your whole startup team so everyone is on the same page about the benchmarks for success, and everyone is driving toward achieving this key financial goal in their work throughout the year.
– Doreen Bloch, Poshly Inc.
9. Identify Your Top Five Metrics
Most entrepreneurs don’t have strategies for their bookkeeping efforts. As a result, their accounting department, bookkeeper or CPA simply produces a set of financials that are inaccurate and worthless in terms of business. To change that in 2014, set five metrics you believe will help you better understand your business, and hold your team accountable for delivering them to you on a schedule.
– W. Michael Hsu, DeepSky
10. Eliminate Credit Card Debt
Yes, I know that it is a hallmark of entrepreneurship to go all in and pile loads of debt on a personal credit card. However, this can only be very short term. There are plenty of installment loans to pay off high-interest debt. Especially in the U.S., credit card companies are “fleecing” the consumer rates up to 29.99 percent. Switch to a consolidation loan if you can’t pay it off in six months.
– Gideon Kimbrell, InList Inc
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