Tips for Starting a Small Business

Presented by Marc Aarons

Given there are 33.2 million small businesses in the United States, I find it’s a good idea to reach out to clients periodically and see if any have plans to open a small business—and that’s exactly what I’m doing today!

If opening a business is in the cards for you in the next few years, know that I am here as a resource. In fact, I have a few pieces of initial advice I thought I would share today:

1. Lack of marketing is the number one reason businesses fail, so don’t ignore it. Even in a tech-centric world, only 71% of businesses have a website, and 20% depend solely on social media for marketing and custom service. Ideally, a business needs both a website and a social media presence. One stat that puts this into context: 76% of customers will check a website before entering a brick-and-mortar location (if there is one).
2. Keep in mind that labor accounts for 70% of a business’s spending, and inventory is the second biggest cost. On the first count, you don’t have to hire a massive team to start—and it’s better if you don’t. A lot of early-stage businesses rely on the help of family and friends before things get fully up and running, and artificial intelligence may be a great way to offset some labor costs. Regarding inventory, small business owners need to put a premium on properly planning for storage and shipping.
3. Separate your personal and business accounts. Doing so gives you a much better understanding of your business’s finances, makes tax preparation easier, and can protect your personal assets from liability.
4. Don’t wait until you have more money to get a financial advisor. Since this could come across as self-serving, I want to be clear that this is genuine advice! Regardless of whether you work with me, I encourage you to work with a financial advisor as you’re setting up your business. When money is tight (as it often is at the beginning of a business venture), a strong financial plan is all the more important. And it usually is much more affordable than people think.

With that said, as a small business ourselves, our team is always happy to be a financial planning resource. If you or someone you know is planning to open a business, let us know if we can help. That’s why we’re here!

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.