For all of you business owners, small or large, you know operating your own company is not as easy as it sounds. Nevertheless owning your own business is something that many of us take on, risk aside. Usually it starts with an idea, and a little bit of success. The ideas we come up, although usually brilliant, can lack some of the main components you need to find continued success as a business owner. 

Accounting and Finance

One thing a lot of entrepreneurs may lack is the ability to maintain your business financially. A crash course diving into accounting and finance books will hinder your business, and waste your time. There is nothing wrong with looking into the practices, but learn as you go. Take the time to completely understand it. Cramming everything in your head is the same way we squeaked through those tough classes back in college. There is nothing wrong with hiring on an accountant to handle your numbers. Sure its an expense, but its a valuable service, and you might even find yourself cutting costs elsewhere with different accounting practices.

Employees

Another aspect of a successful business are quality employees. Contrary to popular belief, there is nothing wrong with hiring family, as long as its not your crazy uncle with three DUI’s. The most important thing to do when hiring is to be open minded with all applicants. All 4.0 students are great, but don’t always fit your company. Look for enthusiasm, creativity, charisma, and motivated individuals. Employees who are quick to learn and always are asking for more are the best. After you have made your selection from the interview process, pay an appropriate wage. You want happy employees. Give them something that they can live off of comfortably, and you will find them to be more productive. 

Stay Productive

Productivity is extremely important for business owners. This is especially relevant for business owners who work from home. You must stay on task, and you must have a set work schedule. I’d say 99% of successful business owners do this. DO NOT put off work simply because you can. It is very easy to fall behind when you are your own boss. Don’t expect everyone to do everything for you simply because you are in charge. Work with others. Create an environment where everyone thrives off competition, including yourself. Ensure everyone wants to out-do the next employee with either bonuses or a commission. There is nothing wrong with sparing a little bit of money, it will all come back full circle, and then some. Productivity is a must. You may have all the contracts and work out in front of you, but you must perform in a timely manner. If not, you won’t be having many repeat customers.
There are always a number of other things you can do. Marketing, location, promotional events, and analyzing your competitors are just a few.  Just make sure you take care your finances, employees, and productivity first.

This article was written by Alina Cambridge. Alina helps to run and maintain a credit card comparison website at CreditDonkey.com. This website reviews cash back cards, as well as helps direct both business owners and people to the best credit options.

When I first started working from home as a self-employed person, I was a sole proprietorship (I’ve since changed my organizational structure to a LLC, though). For entrepreneurs, it is probably the easiest type of business structure to set because you don’t actually have to do anything beyond providing goods or services for a price, except may register your business with your state.

You and Your Sole Proprietorship

When your business is set up as a sole proprietorship, you are indistinguishable from your company. You are liable for whatever debts or legal actions are taken against your company. Even if you have a separate business account, you, personally, are still considered liable for what goes on with the sole proprietorship. It is important to understand this. If you are considered about possible accidents resulting in injuries, or other issues of financial liability, you might consider another business structure.

Sole Proprietorship and Taxation

Because you and your sole proprietorship are one and the same, you are taxed as a single entity as well. This simplifies your tax preparation quite, since your business income is taxed as part of your personal income. However, you do need to be aware that you need to fill out a Schedule C when filing your taxes. The Schedule C is a record of your profits and losses from business activities. Once it is completed, the final amount from the Schedule C is added to what’s on your Form 1040. You will also have to use a Schedule SE to figure your self-employment tax. However, you do not need to fill out K-1 forms or keep payroll records as part of your tax package. It is recommended, however, that you purchase an up-to-date tax software program to ensure accuracy and help maximize your returns when you are ready to file.

Main Advantages of a Sole Proprietorship

As you might expect, the main advantage of a sole proprietorship is the ease of its formation. You can form a sole proprietorship immediately, and call it what you want (watch out for trademark issues, though), without ever having to file organizational paperwork, although some states require that you register as a business. Other advantages include:

• Beyond renewing state business registration in some areas, there are no ongoing formalities to the structure.
• You can mix your personal assets with your business assets.
• While you have to pay unemployment tax on employees, you do not have to pay it on yourself.
• Keeping financial records is straightforward and simple, although you will need to keep track of business income and expenses for your Schedule C.

Main Disadvantages of a Sole Proprietorship

The biggest issue with a sole proprietorship is that of liability. If you plan to hire other workers, or if people visit your place of business, this could be a problem when it comes to injury liability, since your personal assets are game for lawsuits, even if the complaint is against the business. Other disadvantages of a sole proprietorship include:

• Difficulty retaining value, since a sole proprietorship rarely survives its owner.
• Can’t sell interest in the business to raise capital.
• Sometimes difficult to properly separate business from personal when it comes to money matters.

Bottom line: For some, a sole proprietorship is a good idea. However, others might be better off deciding on a different organization that offers fewer liability risks. Figure out your current and future needs, and how money is likely to work in your business, and make a decision based on what best fits your needs.