5 Small Business Exit Strategies

When you are busy running your business, often you are focused on where the next dollar is coming from and how to make the business more profitable and successful. But as Steven R. Covey quoted in a chapter of his best-selling book “The 7 Habits of Highly Effective People”, you need to start with the end in mind.

The start is when you start your business or if you have already started, then the start is now! The end is when you want to exit your business. A strategy should be reviewed and changed periodically because conditions change.

When you exit may be the most emotional decision you make in your business. If you operate your business without an exit strategy, you will make this already very emotional decision and process even more difficult.

Here are 5 exit strategies suitable for small businesses.

  1. Merger

This is where you combine your business with another. This could be two businesses in the same industry, making a bigger and perhaps more competitive business. Or it could be a business with a complimentary product or service, e.g., a plumbing and electrical business merging to become one.

A merger may strengthen both businesses, but if you are wanting to exit the business altogether this is unlikely to work. For the merger to be successful the owners/leaders of each business need to remain and manage at least the part of the business they previously owned outright.

  • Acquisition

This is where one company buys another outright. You would give up your business in exchange for the purchase price.

Depending on how badly the other business wants your business, you may be able to get a price that is higher than your business valuation.

Ideally, you should be at a point where you want to leave not only the business but also the industry. Often the sale comes with a non-competitive agreement, where you cannot work or start a competing business.

  • Sell to someone you know

You could sell to a family member (e.g., child), friend, employee, business colleague, or a customer.

A crucial factor to consider is how the sale might affect your relationship with the buyer. If the business struggles or fails after the sale you might be blamed. Make sure you show all liabilities and profitability and your view of the prospects of the business.

  • Initial Public Offering (IPO)

This is the first sale of a business’s shares to the public and is often referred to as “going public.”

This allows members of the public to own part or all of the business and you will need a Board of Directors to take charge of the management of the company.

Usually, public businesses are larger businesses in a high-growth period. More funds are gained to help pay off debt or reinvest in growth strategies.

This strategy is not ideal if you are wanting to exit the business quite quickly.

  • Liquidation

This is where you cease trading and sell your business assets. If you have any creditors, they get paid the first form of any money received.

This strategy does not allow you to keep your business concept, reputation, or customers. Your business does not live on.

Global Resources can aid you to plan the exit strategy that is best for you and your business.

Liquidating Your Business

There are many instances where liquidation is the best or only practical choice for exiting your business.

Many tradespeople run their own business, which is just themselves, their tools, a vehicle and perhaps they employ some staff as laborers or casual workers.

Once they decide they no longer want to run that business, what do they have to sell apart from their tools and vehicles?

Most of their work might be residential with very few customers needing ongoing services. The goodwill or reputation of the business, therefore, has little or no value.

Businessowners close their doors and go out of business every day. Sometimes they have had enough of being their boss. They might have realized that they could do the same job for less effort and more income by being an employee.

Then again, the business may be facing financial difficulties and the owner realizes the futility of trying to trade their way out of trouble. Better to liquidate the business on your terms than must face bankruptcy on someone else’s terms.

To come out of liquidation with a good payday would require a business to have valuable assets to sell, typically in the form of land or expensive equipment. The name of the business may have some value and be attractive to new owners.

Good will is something regularly seen on financial statements. It is an intangible asset that reflects the value of things like a strong brand name, good customer relationships, good employee relationships, patents, intellectual property, size and quality of the customer list, and market penetration.

For example, if a plumber could prove that 50% of his customers needed his services at least once every year and 75% of the remaining customers needed his services at least once every five years, a value can be attributed to those figures.

You won’t find bad will on any company balance sheet, but if the business has been involved in something that created bad publicity, the value of any goodwill could be significantly eroded. Bad will could be due to illegal or immoral activities like lots of bad customer reviews, selling out-of-date products, being racially abusive to customers, fraud, etc.

Selling a small business owner when bad will exists is likely to have nothing of value apart from tangible assets.

In all liquidations, the money received must first be used to repay any creditors.

The remaining money goes to the owners.

In an ideal liquidation, the following occurs (and usually in this order):

  • All bills are paid off.
  • All taxes are paid, and the various levels of government are informed of the closure.
  • Contracts, leases, and the like are fulfilled or formally ended.
  • Employees are let go to find other jobs.
  • Assets or inventory is depleted.
  • No lawsuits are consuming money and time.
  • Customers are placed so that they get needed goods or services.
  • If needed, insurance is continued to cover unexpected claims after the firm closes.

Pros and Cons

The pros and cons need to be carefully considered before choosing a liquidation.

Pros

  • It is usually straightforward; you don’t need to negotiate or merge your business.
  • No negotiations are involved.
  • There are no worries about the transfer of control.

Cons

  • At most, the owner will get the market value of the company’s assets.
  • Liquidation destroys the opportunity to realize the value of things like a client list, the owner’s reputation, and business relationships.
  • Other shareholders may not be impressed with their share

In many cases, the owner will be better to try and find a buyer, particularly if the company brand has any value, if there is a loyal or sizeable customer base, and if there is a stable number of employees.

To find other alternatives to liquidation for your business, check out http://www.gr-us.com/

Why is a Business Exit Strategy Vital?

Small business owners regularly face a range of struggles every day. Without the resources of larger companies, the business owner is often left to do many tasks that can drag on into the evenings and affect family time.

These struggles can include:

  • Employee turnover
  • Financing
  • Marketing costs
  • Time management, and
  • Access to modern technology

It’s no wonder that they often have doubts about whether running their own business is worth it.

Whether you are struggling with your business, or it is going great guns, an exit strategy is one of the most crucial aspects of running your own business. Yet it is one that far too many business owners leave far too late.

Here are the reasons why an exit strategy is vital to the overall success of a business.

Business owners become weary

Building a business from scratch and turning it into a successful operation is challenging. It takes significant amounts of time, often outside normal business hours. It can also take a lot of money and risk.

It is not unusual for business owners to use their homes as collateral to get a business loan. If the business fails, they might lose more than just their business and their source of income, they could lose their home too.

Too often the business owner is left doing far too much work, much of which is well outside their areas of expertise.

Because they have so much at risk, they can be unwilling to delegate tasks and therefore take on even more work for themselves.

Fatigue and burnout can become genuine issues.

If they do decide to sell the business, to get the best possible price, they need to have accurate records of business performance, revenue history, and other paperwork available. This can take several months to put together in among the normal work requirements, and just adds further stress to the owner.

A business exit strategy ensures that a business owner has systems in place for recording essential information that is always available.

Get a better understanding of revenue streams

Having an exit plan will ensure that business performance data is always up to date. The business will always have a good understanding of revenue and cash flow.

This accurate financial data enables better business decisions to be made.

Knowing the exit strategy helps the business owner decide what projects to take on and which to turn down. There’s no point in getting involved in a two-year project if you are intending to exit the business in six months. Instead, you would focus on short-term projects to bring in more income and increase the business value.

Developing effective leadership

If the next owner is a family member of a current staff member, the business owner can start preparing them for the takeover. The better the buyer knows about the business, the more value they will see in it and the more they will be prepared to pay.

A clear succession plan detailing decision-making roles minimizes risks and gives the buyer greater confidence in the long-term ongoing success of the business.

Smooth operations

The exit plan will include all the necessary information for the buyer to be able to continue operations for day one. They won’t need to waste resources collecting information like salaries, finances, and business relationships.

An exit plan will allow the business owner to track the business’s finances and ensures a smooth transition to a new owner.

Check out Global Resources LLC if you have questions about business exit strategies.

Onboarding New Employees for a Small Business

One of the key elements in retaining quality employees is to provide excellent onboarding from day one. A recent report showed that 1 in 25 employees leave their new jobs because of bad onboarding experiences

The onboarding process starts before you have chosen the new employee.

The Interview

During the interviewing process, provide the job description and request proof of qualifications. Contact details and other relevant details collected at the application stage can be transferred to your Human Resources information system.

Once the Job Offer is Accepted

Information like bank and tax details can be requested at this stage and any industry-specific courses could be provided online for completion. The job contract/employee agreement can be provided along with any employee handbook.

The Week Before the New Employee Start Date

Organizing all the equipment the new employee requires can be prepared so they are ready to be used on the first day. This could include a desk with stationery, a computer with all software, and email accounts set up.

Other items that should be ready on that first day can include business cards (including phone number and email address), mobile phone, office keys and/or building access fob, mobile phone, ID badge, uniform (if required), and any tools specifically required to do the role.

First Day

To ensure the new employee will feel comfortable, give somebody the responsibility of greeting them when they arrive. Arrange a tour of the workplace so they get their bearings of the whole business operation and arrange a welcoming morning tea or lunch with all staff.

Have a welcome kit prepared that could include a welcome letter, additional hire paperwork, HR documents, technology setup instructions, any promotional company material like a notebook, T-shirt, mug, etc., pens, highlighters, paperclips, etc., a copy of your office map, a copy of your company organizational chart, a copy of their first week’s work schedule, and information about your team culture.

Schedule an onboarding meeting with an HR representative who can explain issues like employee benefits, company holidays and policies, parking, and public transport, how to complete timesheets, company structure, team culture, and your company’s vision, mission, and values. The immediate Team Leader/Supervisor should also schedule a meeting to fully explain all job duties.

During the New Employees First Week

The immediate supervisor should meet with the new employee to discuss goals and performance objectives for the first 3 months, 6 months, and year. Any key projects over the next three months should be explained, and immediate work tasks can begin. Daily meetings will ensure immediate feedback and uncover any issues or queries that can be addressed as soon as possible.

Introductory meetings with heads of other departments enable the new employee to meet others they may deal with from time to time, and to better understand the workings of the entire business.

During the New Employees First 3 Months

Regularly scheduled meetings with the immediate Supervisor should continue during this period to monitor progress and at the end of the 3 months, review overall progress.

Beyond 3 Months

Ideally, the new employee continues to be monitored with less intensity for up to a year. This makes them feel valued and in year two they can be integrated into your regular staff appraisal program.

Global Resources can help you plan a strong onboarding process that will lead to satisfied employees that stay with their employer for many years.

10 Common Family-Owned Business Problems

A successful family-owned business can be the cornerstone to creating ongoing inter-generational wealth for a family. You don’t have to be as successful as family-owned businesses like Heineken (Beer), Samsung (Electronics), Walmart (Retail), Volkswagen and Ford (both Motor Vehicle manufacturing) or Berkshire Hathaway (Investments) to create this wealth.

However, working with family members can create some unique issues that spread outside the workplace and beyond the boardroom.

For some examples where the family business isn’t always smooth sailing, you could refer to the Godfather movies (though that mafia family didn’t play by conventional business rules), the recent TV series Dopesick (relating to the Sackler family and the Purdue Pharma drug scandal), or almost any episode of Gordon Ramsay’s Kitchen Nightmares (many episodes feature conflict within family members running their restaurant).

Here are 10 of the most common issues.

  • Family problems

What’s happening at home can affect the business and vice versa. The effects could be emotional, physical, or financial.

  • Informal culture and structure

Often the business operates like the home environment leading to relaxed uncomplicated business operations that lack appropriate business documentation, policies, strategy, and goals.

  • Pressure to hire family members

This can lead to hiring children, in-laws, and wider relatives who lack the skills and experience the business requires.

  • Lack of training

Many family businesses have an informal culture that fails to properly train new employees to the required standard. This compounds the problem from the previous point.

  • High turnover of non-family employees

Non-family employees may feel that the best roles in the business will only go to family members or may not fit into the family culture and will constantly be seeking work elsewhere.

  • Sources for growth

In trying to establish the business, finding capital and resources to enable growth can be difficult to find. Often personal assets like the family home are placed at risk to take on debt. If the business fails, the family might lose the business and the family home.

  • Lack of an external view

Because all family members usually have a similar upbringing and life experiences, their views will often be similar. Someone with a different background may have a different view of the business and the competition. This external view can bring new ideas and strategies.

  • Misunderstanding the value of the business and how it is to be divided

Many family members lack the understanding of how businesses are valued and what their contribution is worth in terms of an ownership stake. This also relates to who gets how much of the profits.

  • Who will take over the business?

Many family-owned businesses do not plan for how the business will be passed on to the next generation. This can cause a lot of stress within the family unit when a new leader is required.

  1. No exit plans

Like succession planning, family businesses usually lack any strategy around family members retiring or wanting to sell their share of the business. There needs to be future planning in place.

If you look through these Global Resources reviews, you’ll see examples of how we can help businesses facing these kinds of issues.

Managing Social Media for the Small Business

It’s the 2020’s and small business owners who have been avoiding social media and are now nervously asking themselves if having a presence on social media is worth it. If they should have a presence, how do they manage it and which social media platforms should they be on?

After all, most small businesses don’t have a marketing team or even a marketing specialist.

Small businesses can benefit from a presence on social media.

Research has found that a social media presence can increase awareness and inquiries, enhance relationships with customers, and increase the number of new customers. You can even easily begin reaching customers almost anywhere in the world.

Here are 8 tips to get you started.

1. Set SMART Goals

Start by deciding what you want from social media. Set yourself SMART goals which are specific, measurable, achievable, relevant, and time-bound.

An example of a great SMART goal for your social media might be to increase your email signups by 10% in the next six months.

You can easily measure this after six months by counting how many new subscribers you have achieved.

Social media is great for growing brand awareness, trust, and familiarity with your services and your brand.

2. Do Just a Few Things, But Do Them Well

Don’t take on too much, you don’t need to turn into a media company producing videos, blogs, and podcasts. Start with just a few social media platforms so that you don’t create too much work for yourself and can fully focus on each one.

Think in terms of quality first, then quantity. Active accounts achieve higher engagement, but the content must appeal to your ideal customers

If you reach interested customers, turn them into fans of your brand, and get them involved in what you do, that’s an effective social media strategy.

3. Understand Your Audience

Using social media is all about knowing your clients and posting about what matters to them.

Post valuable content that somehow helps your customers. Use the social media platforms your customers use. Do a little research and see which accounts they follow, what posts they like, and share. This will give you more idea about what matters to them.

Don’t just write about your business. Think about why you follow certain brands. There’s a reason beyond their product, right? Apply that same thinking to your business and figure out exactly what your ideal client wants to see from you.

4. Start Conversations

Make your posts informative, inspirational, and promotional, but in every post, try to include a call to action. Train your followers to interact with your brand.

Ask them questions, get their opinion, and talk about things that stir up emotion. No matter which industry you’re in, there’s an aspect of your product or service that’s tied to a feeling or experience your ideal client wants to have.

Only 10% of messages and comments left on business social media accounts are answered. Make sure you set time aside to respond to your customer comments.

5. Schedule Your Posts

You’re running a business, so every minute counts! Posting consistently shows your potential clients you take your business seriously, and they should, too.

Make technology your best friend by scheduling posts in advance. This keeps you consistent, plus it saves time. If everything is scheduled, you’re not getting distracted scrolling through your feed instead of posting and getting back to work.

6. How Often Should You Post?

That depends on your availability, but as a guideline, daily stories and posts for Instagram: once a day for Facebook. Twice a day on Twitter at times your customers are online, and several times a week on LinkedIn, focusing on video content.

7. Social Media for Small Business: Paid Posts

Facebook advertising is particularly effective at reaching a specific demographic. Set yourself a budget, you could start with $20/advertisement, but make the offer attractive.

8. Experiment and Pivot

Don’t expect great results immediately. Take your time to figure out what suits your clients and be prepared to try different things like showing two different ads to the same audience. Then check out which one performed best.

Make use of the free analytics tools available on social media platforms. This is an easy way to see your engagement and conversion rates.

Social Media Strategies for Small Business

The core of effective social media marketing for small businesses revolves around consistently providing high-quality content. Consistent doesn’t necessarily mean “a lot”. You must find a rhythm that works both for your audience and for you to keep providing value in an interesting, entertaining way. Engage in conversation with them. Use trial and error; it’s ok to make mistakes!

For Global Resources solutions, check out http://www.gr-us.com/.

Consumer Behavior Changes Impacts on Business

Have your day-to-day habits and activities changed at all over the last two years because of the pandemic?

Most people would answer yes to that question.

One survey found that 49% of people are avoiding leaving their homes, 50% are working from home either full or part-time, 42% are avoiding public transport, and 57% are social distancing from friends and community.

Spending more time at home means more leisure time and a significant increase in viewing entertainment, following the news, and engaging in hobbies. There have been moderate increases in cooking, use of social media, household chores, shopping online, and physical fitness.

As a result, people’s priorities are changing with 50% of people trying new products, 28% picking up new hobbies, 51% spending more time watching entertainment, and 48% intending to maintain newly acquired health and wellness habits over the long term.

Looking ahead, consumers have had to change how they live and many of those changes are influencing their buying behavior. For many, what they buy and how they buy it has changed, and these fundamental shifts will have long-lasting effects.

Once people have formed their consumer habits, they tend to be hard to change. With change being forced on all of us during the pandemic, the changed habits picked up recently will likely stick.

Consumer businesses need to find ways to meet consumers where they are today and satisfy their needs in this post-crisis period, and beyond.

Here are four actions that businesses can take to influence consumer behavior over the long term.

  • Reinforce Positive New beliefs

The COVID-19 crisis has forced many consumers to change their behaviors in a wide range of everyday activities, from grocery shopping to exercising to socializing. When consumers have enjoyed these new experiences, even long-held beliefs can change, making them more willing to repeat the behavior.

Businesses can reinforce and shape behavioral shifts to position their products and brands better for the next normal.

When your business is providing a service or product to fit with new consumer behavior, add a bonus of some sort to make the consumer experience more memorable, and encourage further repetition of that new consumer behavior.

  • Shape Emerging Habits with New Products

Adapt your product or service to fit the emerging habits.

For example, if people are spending more time at home, take your service to them instead of making them come to you. Consumers may be happy to pay extra for this as it saves them the time to come to you and is far more convenient for them.

  • Sustain New Habits by Providing Contextual Cues

When consumers associate certain behaviors with a particular context, that behavior will eventually become automatic. Businesses can identify the contextual cues that drive these behaviors. A contextual cue can be a particular task, time of day, or object placement.

  • Connect with Consumers’ New Mindset

The pandemic has created a mix of anger, fear, and anxiety in the minds of consumers.

Adapt your messaging to consumers to connect with these emotions and encourage good humor and calm influences.

The pandemic has changed people’s routines at unprecedented speed, and many will stay with them. Businesses that create a deep understanding of the changed beliefs, peak moments, and habits of their target consumer bases will be able to change their product offerings, customer experiences, and marketing communications to be best positioned to thrive in the years ahead.

For more great tips on issues like this check out the Global Resources LLC Facebook page.

Networking for Small Businesses

All small business owners want to stand out from their competition. This can be especially difficult when you are trying to manage everything from your firm’s finances, interviewing job candidates, and spreading the word about your project.

Luckily, there are some manageable, logical steps that all entrepreneurs can follow to make sure that they are engaging with their customer base and other businesses.

Engage With Your Neighborhood

This timeless tradition is simply known as hitting the pavement, and it’s been around since humans first began commerce. While some consider this archaic, it can still be a viable option in neighborhoods and/or industries that are still based around foot traffic and word of mouth.

Maybe your startup yoga studio needs new flooring installed and there is a local hardware store or contractor nearby. Never forget the personal touch. By engaging in face-to-face interaction for basic services, your business neighbors will be encouraged to share their experiences with friends and family.

Leaving a personable impression is an old tradition, but it will never go out of style.

Attend Trade Shows

Trade shows are an excellent way to start networking because they are available for every type of business. From restaurants to industrial construction, there’s almost always a meeting for entrepreneurs in your type of industry.

These exhibits are excellent in that they allow like-minded individuals to advertise their products and services, but they also allow business owners to exchange information and trade ideas. For a nominal fee, you can dip your toes in the water and get a sense of what your customers are searching for.

These events are often a great time to perfect your “elevator pitch”. Know your worth. Know what you provide and know exactly how to express that to a potential partner/investor. Customers might be patient, but experienced entrepreneurs will smell uncertainty in your product or service from a mile away.

Trade shows provide a perfect opportunity for you to cut your teeth and express your confidence in your small business amongst experienced colleagues.

Log On

For those who haven’t started their business in a walkable neighborhood or have access to trade shows that are typically located in population centers, the internet can still provide an option to interact with other business owners.

Social media and a global supply chain allow entrepreneurs from all over the world to establish relationships with one another. A company website is a practical necessity today, but you might even consider starting a blog to share your experience as a business owner with others.

Between contacting curious investors, interacting with suppliers, and attracting potential customers, there is no excuse for not establishing your firm’s online footprint.

While networking can be a hit-or-miss endeavor depending on the particularities of your small business, there is always an option. Face-to-face interaction with local businesses and charities is almost always the cheapest and most immediate option for your company.

Trade shows are accessible for all but the most niche industries, and even beyond that, the internet can provide a base of interaction with other business owners as well as investors and clients.

Ideally, you should be exploring all three bases of networking, but GR-US.com can help you find the right networking strategy no matter your business model.

Designing an Office Safety Plan

No matter what industry your small business operates in, the health and well-being of your employees should always be your chief priority. Luckily there are several ways to design a safety plan whether your work involves office tasks, or your construction sites require a great deal of heavy equipment.

Start a Safety Strategy Along with OSHA Guidelines

To get you started in complying with the Occupational Safety and Health Administration (OSHA), you need to draft a safety strategy, the founding document of your company’s safety policy.

Your Safety Strategy is ultimately a philosophical document, emphasizing your knowledge that employees deserve to work in a safe environment and professing your commitment to guarantee this and plan for emergencies depending on the industry you work in.

This could mean planning job site safety for a construction company, declaring hygiene to be paramount in a restaurant setting, or announcing your commitment to proper evacuation routes and protocol if your office workers must quickly vacate the premises.

Plan For Both Prevention and Minimization

Accidents on the job site are inevitable, but that doesn’t mean that you can’t do your best to prevent them. This might be something as simple as requiring all construction workers to sign a contract that they will wear a hard hat whenever on a job site.

If there is an emergency, your safety plan should instruct workers on how to deal with any plausible issue given their work environment. Office workers should know where your fire extinguishers are, how to operate them, and how to use your fire evacuation routes should this prove insufficient.

Meanwhile, workers in more physical environments should know the proper medical procedure if there is an on-site accident. This might cover the treatment of chemical injuries in a laboratory environment. Meanwhile, employees dealing with heavy equipment should know how to best stabilize a physical injury before medical professionals can arrive.

While you should always plan to minimize work-related accidents and injuries, they are inevitable. By preventing as many work accidents as possible, you can still prepare your crew to respond properly when something does arise.

Get Your Whole Crew Involved

Safety procedures should be reviewed annually if not more often, but this is not a topic that should be kept to management. As the business owner, your base level workers and their immediate managers should also be consulted on workplace safety.

A brief check-in with a department manager or line foreman can provide a wealth of insight as to what your workers understand about your firm’s safety protocols, from what training is lacking to what instruction might border on excessive.

Get a feeling for the situation on the ground and bring it back to senior management to keep your workers as safe as possible. Your upper management can help you decide on a larger course of action, but this is only the case after you gain an understanding of how your policies are being understood on the micro-level.

Global Resources Reviews can make sure that you are always taking care of your most valuable asset, your employees.

Minimizing Business Taxes

Diligent accounting is one of the less glamorous but crucial aspects of your small business. Careful bookkeeping can not only assure that you are paying the proper amount, but you can also find ways to save on your tax liabilities by properly tracking your expenses.

These tips can keep your bookkeeping clear for filing purposes and make it easier to sell your small business all while saving you money along the way.

Organize Early

Many small business owners make the mistake of forgetting about itemizing their expenses and deductions until April begins to rear its ugly head. Understandably, the first few months of operation are often a flurry of different tasks and obstacles to overcome, but even your firm’s minor chores deserve attention.

Keep a constant track of your expenses instead of falling behind to rush and catch up. This doesn’t have to be a matter of stashing away heaps of paper receipts and invoices.

Investing in a scanner and organizing your finances can make it easy to establish your paper trail should the IRS approach you for an audit. This will save you a myriad of accounting fees and court costs if you find yourself in a legal quagmire.

Digital record management is far better for both your company and the environment when compared to the days of hoarding paper products. Over time, you might save on stationary alone by having your finances clearly and immediately accessible by digitizing your information.

Consider Home Office Deductions

Don’t be afraid to write off business expenses for your home office. Some worry that deducting business items kept in your home is practically begging for an audit. Being eligible for a home office deduction means that the space must be used frequently and exclusively for business purposes, so this should be well established.  For example, a place in your home which is exclusively used to store inventory.

Beginning in 2013 tax returns, the IRS began offering a simplified option. This particular method for 2021 uses a pre-determined rate of $5 a square foot with a maximum of 300 square feet.

As long as you are meeting the strict but clear requirements for the home office deduction, claiming it does not put you at increased risk for an audit.

Claim Advertising Costs

Believe it or not, advertising and promotional costs (outside of lobbying) are completely tax-deductible. This includes everything from running a social media campaign, printing and handing out paperwork such as business cards or flyers, and even hiring someone to design a website or business logo.

This is a business expense that entrepreneurs who are not very experienced in business accounting or tax law can easily overlook, but it can be a very beneficial deduction. This is especially true for young firms that are spending a great deal of money on marketing campaigns to gain fresh exposure.

Track Business Use of Your Car

All costs associated with operating an exclusive company vehicle can be considered deductible, but this even applies to instances when personal vehicles are used for company purposes. If you use a personal car to visit clients or deliver products, then that mileage, fuel, and maintenance can be considered tax-deductible.

New firms often make use of otherwise personal vehicles to get business done. Luckily, several apps can track the corporate use of your car to add that to your tax information and make sure that you are minimizing your firm’s tax liability.

Constant organization and transparency are key to making sure that your small business doesn’t become tangled in an audit, but many other loopholes can save your entrepreneurial project money.

Digitize your financial documents regularly, account for home office space if it meets the requirements, deduct all your advertising programs, and be sure to keep track of when private vehicles are being used for company purposes.

Additional Tax Strategies

After a business has been in operation for several years and has grown into a business with significant revenues of over a million a year, there are often more sophisticated strategies which can be utilized to reduce your tax liability, which may include the creation of multiple-entities for asset protection and tax savings purposes.  However, for those strategies, you should engage the legal services of attorneys who have expertise in those areas of the law rather than relying on either your CPA or business attorney.

Global Resources can provide you with even more insight into how you can maximize your tax savings with proper advance planning and recommendations on developing a strategic tax plan using the appropriate professional services needed to accomplish the desired result.