Creating a business strategy is meant to make your business to achieve the needed success. Minor adjustments are done to the strategies as time goes by while some businesses continue ‘business as usual’. Focusing on the priority list is needed to avoid some of the mistakes which will make you deviate from your business strategy.
Strategy case study
Back in 2012 the The Smart Accountants rebranded a part of its operation to take advantage of new opportunities in the UK cloud accounting market. This strategic decision led to the creation of a new website. To see the results click here.
Avoiding the wrong mix: to avoid making the same mistakes which your business has been making, try as much as possible to distance yourself from people who made you make wrong strategic plans. Avoid dealing with people who show the following characteristic:
Personality clashes- those who try to fully control your meeting
Distorted feedback- you may lack candid feedback when people end up telling you want you like hearing
Personal agendas- people who cannot see the big picture but come along with their personal agendas
Seeking external perspective from industry experts, other people in your business, strategic partners and your customers can offer a lot of assistance.
Having a stale vision: always change your vision as time goes by and avoid being locked into a single one for survival. Your team should be challenged to think differently and bigger so as new possibilities to arise.
Repetitive exercise: the strategy which your businesses implement is supposed to energize your manner of operation. It is likely to silence any complains which might have been existent. Always review your approach and try a fresh idea to stimulate ideas and best thinking. This does not necessarily mean abandoning a plan which has served you well for a lengthy time, you need to improve it.
Misalignment: moving the business forward is the major aim of developing any strategy. Though that is the case, you need to be cautious to the market and customer needs. Understand the goals and needs of those you are serving so as to align your strategy towards meeting them. Do not assume you know everything.
By avoiding some of this mistakes when implementing your business strategy, you are likely to achieve the set business goals.
The following are some of the benefits of having a strong taxation system.
It is compliant with the equality canon
This canon states that all taxes need to be implied based on equality. Paying the same amount of money in terms of taxes does not refer to equality. It means that tax should be proportionally to the size and kind of business you are running. When the taxation system is imposed specifically to different business categories the purpose of equality and justice is served.
It is in accordance with the canon of certainty
A strong taxation system also ensures compliance with the canon of certainty. This canon states that the taxation amount needs to be definite and certain to the tax payer. Any ambiguity in terms of the tax amount one pays should not exist. This makes one to be aware of the expected tax before the day of payment arrives.
It creates social awareness
The system will ensure that some sort of social awareness is created amongst different business owners. Businesses pay the government some part of their money and in return have some expectations from it. Having the idea that is your money which is being spent, one becomes more responsible and socially aware. It in returns contributes to lees damaging of public commodities, littering and crime.
Creates a platforms for equal wealth distribution
Any government and economy raves about having an equal wealth distribution system. This is what a strong taxation system helps in achieving. Additionally, the social binding of people from different social classes is enhanced with this system.
Anti-inflationary and elastic in nature
Strong taxation systems can be employed as an anti-inflationary measure. Whenever the inflation rate is decreased by the government, the taxation effects are well harmonized across the board. None of the taxed groups will complain of being unfairly taxed when such situations arise.
Affects investments and savings
The levels of investment and savings can be affected by the taxation system. This in turn can affect the entire ratio of savings within the economy- by increasing or decreasing the rate of tax. Whenever taxes are decreased, people and businesses are able to save and thus invest.
Though, tax planning should be done all year round, when you need to lower the tax bills of your business, effective tax planning needs to be done. This will guarantee the success of your small business. A number of entrepreneurs tend to ignore tax planning and avoid thinking about their taxes until the scheduled time of meeting with their accountant on tax matters.
Tax basics should be understood by small business owners so as to enable them comply with state and federal tax laws. Doing tax planning on a regular basis can enable businesses apply business strategies to be successful.
The following guidelines will offer help on matters pertaining to tax planning.
Setting up a calendar
Coming up with a tax calendar is on of the most important tax planning tools. With the help of the calendar, important deadlines and dates can be tracked. Filling deadlines for various forms can also be listed.
Appointing a professional
The responsibility of ensuring that business taxes are well filed belongs to the business owner. Hiring a tax professional is one of the ways of ensuring that your business is compliant with the state and federal tax regulations.
Practicing good document maintenance is a vital part of tax planning. Documents such as purchase receipts, balance sheets and income statements help one to prepare tax returns and managing the development of a business.
Keeping a track of the expenses
Since the IRS allows credits and tax deductions for qualified business expenses, keeping track of all your business related expenses is every essential on a regular basis. When such records are well kept, one will never forget a thing when doing a preparation of tax returns.
Looking for relevant tax planning solutions to act as a positive balance sheet can be a reliable choice compared to when greater amounts in taxes are remitted. With help from expert tax professionals, you can be provided with guidance and advice on credits and deductions which your business qualifies for and they have a good understanding of codes and laws that affect different businesses.
The following are some of the mistakes which you should avoid as an entrepreneur
Dealing with independent contractors
Given that payroll taxes tend to add up very quickly, most entrepreneurs carry out this so as to avoid them. This is risky as one is likely to be subjected to penalties and fines when discovered. Some do this by going for independent contractors when it the real case they are their wage earning employees. When you hire a lot of them, it acts as a red flag to the IRS and you may end up being audited and the contractors being subjected to unnecessary interviews.
Business owners need to understand the working of payroll taxes and how staying compliant with the IRS regulations is done. As an employer you are taking taxes from paychecks of your employees and as a result you need to pay them to the relevant tax departments and the IRS.
A lot of problems can be caused by a simple miscalculation though you might have avoided the other mistakes. When you are calculating your annually tax return and tax payments, you have to be very accurate. The numbers need to be neatly written and typed on all forms to avoid such mistakes which may lead to unwanted penalties.
Throwing out receipts
All receipts showing all business expenses should be well taken care of. Throwing them away can be a very big mistake. Though taxpayers who earn their wages regularly can afford to throw away their receipts, this is not the case for business owners. They assist in verifying the purchases which are to be deducted from the taxable income.
Improper banking and budgeting
Personal and business finances should be kept separately. Avoid mixing your personal and business finances, expenses bank accounts. The IRS has a mandate of monitoring your bank accounts and when necessary they may request both the personal and business accounts to be audited when they are suspicious on your dealings.
All businesses need to have well structure strategies for them to survive within the business world. The following are some of the vital strategies which need to be taken into consideration:
Have a clear purpose when starting the business
Before starting any business, the entrepreneurs are advised to have a powerful purpose of doing so. Acquiring money should be the least driver. You have to begin a business which you enjoy doing. Another aim can be in order to solve a particular problem, giving back to the community, creating jobs and living in a more desirable location.
Sticking with whatever you know
It is always advisable to launch a business within an industry which you are very familiar with. Your experience in the area will be very vital to your success. By sharing your experience with those alongside you, you will be in return contributing to the success of the business. Learning new ideas in a field you are not conversant with is likely to pose a lot of challenges to you.
Maximizing on all available resources
Money should not be the only available resource for your business to proper. Cobbling together the used equipment, finding mentors, deferring compensation, negotiating terms which are excellent with your partners and customers is what is needed. By doing this, you will prevent your business from running into a financial crisis as all partners will be having a prior understanding on all issues.
Creating multiple sources of income
Once the business is up and running, as an entrepreneur try as much as possible to be pivoted to related business opportunities so as to be in a position of diversifying the business’ income streams. By incorporating multiple income sources into your business as an entrepreneur, you make your business less vulnerable to a single service or product.
Serving the broader community
As an entrepreneur you should serve your customers in a phenomenal way. This is because they form the lifeblood of your business. This ensures that some form of special loyalty is built in them.
At the same time, entrepreneurs are advised to give back to the broader community. You should try as much as possible to mentor students, support schools, help the needy, support sporting activities, pay medical bills and remodel churches. This will make the community to be endeared to the business and in return support it in achieving the set targets. Though that is the case, the intention should be paying back to the community.
These are some of the notable business strategies for small businesses. If well implemented, success is just but assured.