Tips for small business owners from local financial experts

For a look at how local CPAs recommend small business owners approach financial planning and possible business expansion, The Business Report reached out to Stacy Joyner, CPA with James Moore, and Tom Porter, CPA and Partner at ProActive Tax & Accounting.

On common financial mistakes made by small business owners:

“The biggest financial oversight I see made by small business owners is not taking the time to reconcile their business bank accounts. Monthly reconciliations of the business checking account are one of the most important measures a small business owner can take to mitigate fraud, understand where the cash is going and have an overall pulse on their financial health.

We often encounter small business owners who are not even aware of how much cash they have in the bank because they do not regularly monitor their statements or reconcile the activity. In today’s climate of fraudulent bank transactions and identity theft, it is critical for business owners to keep a close watch on their cash.” Stacy Joyner  

“Not planning ahead! There is an encounter I have every year during tax season that I call the “sticker shock of success” when I have to report to a business owner the tax bill that comes with their business’ great success the year before. Some are prepared, many are not. Failing to plan is planning to fail. Be proactive. Consult your trusted advisors along the way and make plans for dealing with what you expect to happen in the future. With taxes, planning ahead can reduce future tax bills and having a plan can avoid a lot of headaches.” Tom Porter

On the financial perks of owning a small business in North Central Florida:

“Being a small business owner in North Central Florida is definitely a positive thing. The University of Florida provides access to research, talent and resources that many other communities our size do not have. We have a strong banking industry which allows for competitive options for small business owners needing financing. The community is very supportive of small businesses and developing a personal network in Gainesville can be a great tool for helping a business to thrive.” Stacy Joyner  

“One benefit of owning a business in Florida is that many businesses do not have to file returns and pay income tax in Florida. This is certainly a nice advantage. Also, with the University of Florida in our community, local business owners have access to highly educated potential employees and all kinds of specialized expertise. UF has also been doing a lot to promote its intellectual property with commercial potential. There are a lot of potential future businesses being generated at UF each and every year.” Tom Porter

On things to think about when considering business expansion:

“For a small business looking to expand, I would recommend that they do significant research, budgeting and forecasting to fully understand what the financial need will be to facilitate the expansion. Will a loan be necessary? Will current cash flow fund the expansion? These are questions they should be able to answer.

If a loan will be necessary, the business owner should analyze their current financial records to make sure they are accurate, reconciled and complete so that when they apply for financing they give themselves the best shot at getting approved.” Stacy Joyner

“My advice to business owners who are contemplating expansion is to seek counsel from some of the specialists in their network, such as bankers, accountants and real estate agents. Key questions to consider include:”

  • How will the expansion impact the company’s fixed costs?
  • How will the expansion affect current operations? What will change?
  • How will the owners’ and other key employees’ roles change in the larger business?
  • What is the upside potential for the expansion? Does it appear likely to equal or exceed the value of the current business?

Tom Porter

On their favorite piece of advice for small business owners:

“Don’t be afraid to fail! You will make mistakes. You will make the wrong choice, more than once. However if you learn from your mistakes, listen to the advice from your mentors and engage the help from business advisors, you give yourself the best shot at success. No successful business owner will say they knew it all and figured it all out on their own.”

Stacy Joyner

“I first heard this advice years ago, and I think it is still the most powerful — yet simple — imperative for business owners to consider regularly: Do more of what is working and less of what is not working.

On many occasions and for a variety of reasons, owners will realize they are dedicating substantial resources to customers or projects that aren’t making much money or are undesirable for other reasons. To minimize these occurrences, owners should pause to reflect on a regular basis on who their best customers are and then try to “clone” those customers. At the same time, they should also try to identify those customers who may be a bad fit for their business and reduce their acceptance of that kind of work.” Tom Porter

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