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Friday November 15th 2019

Three Small Business Misconceptions to Avoid

Starting a new business can be an exciting time. You are opening a new phase of your life that depends on your talents and abilities more than any endeavor of your life. Just be sure to understand what you are getting into before you cut all ties to your day job.

Overcoming the Odds

Running a small business takes a lot of work, a solid understanding of management, and a little luck. Research shows that every new small business has only a 50 percent chance of succeeding in the first five years. You will need to spend a lot of time building and nurturing your business before you can expect to begin to overcome those odds and reap rewards. One of the first things to do is eliminate any misconceptions you may have about running a small business.

1. Self Reliance is the Key to Happiness

It can be refreshing to be at the top of the ladder when you own your business. You don’t have a boss to report to, and you get to make all of the decisions on your own. Unfortunately, you still have to make all the decisions on your own. You are responsible for the big choices and the small ones that will keep your business running or run it into the ground. You receive credit for success and the blame for failures. This requires a balanced temperament and thick skin.

2. A Fresh New Idea is All You Need

Most successful small businesses are not brand new ideas. Most of them offer familiar products and services in a new way. The danger of presenting a brand new idea to the market is that customers may not realize a need for that new product. You might be better off with something people can already relate to and understand. It is easier to break into an established market than it is to create a brand new market on your own. You are better off differentiating yourself with your take on an existing product rather than creating an entirely new idea.

3. Setting Your Own Hours Means More Free Time

It’s tempting to look at a small business owner’s hours and be jealous. After all, they can choose when to work and when to stay home. Unfortunately, the line between work and play becomes very fuzzy when you run a business. You may find yourself working at all hours while you struggle to get your business of the ground. In the meantime, relationships will suffer.

It’s important to understand that being a small business owner is a lifestyle choice. You will probably spend twice as many hours working on your self-owned business than you would ever spend working for someone else. Of course, if you’re doing what you love, it rarely feels like work.

Small Business Lending Basics

Businesses of all sizes frequently acquire loans for numerous needs. Before journeying into the world of company management and ownership, individuals require some knowledge of small business lending basics. Some lenders prefer to work with companies established for 3 to 5 years, while others readily assume the risk of new business ventures. Lenders provide various loan types to accommodate different business aspects including start-up expenses, cash flow, expansion, investments and inventory.

Small business owners must understand that each loan application, regardless of intention, automatically transfers to the individual’s credit report. Here, other creditors have the opportunity to view a company’s borrowing and payment history. For this reason, ensure loan acceptance by filling out applications thoroughly, providing all the necessary documentation and detailed business plan or records requested.

Pre-loan Preparedness

Company owners and potential owners must prepare appropriate documentation prior to the loan application process. An applicant must prove the ability to repay the loan and the commitment to the business. Part of the paperwork a first-time business owner requires includes personal financial statements, and 3 years of tax returns.

Financiers desire a well-constructed, detailed business plan, featuring monetary requirements, cash on hand, necessary equipment and facilities, collateral, projected income and expenses, in addition to contingency plans. Include personal experience and qualifications and the experience and qualifications of associates or employees. Established business loans require similar documentation, but also include profitability and loss records in addition to the company‘s tax returns.

Choosing a Business Partner

Consider a loan officer or creditor as a business partner. During every part of the company’s lifespan, this person or institution invests in the venture and expects a return on that investment, albeit the loan amount plus fees and interest. Include a personal bank as the first place of loan inquiry. As an established client, potential or established business owners already have a relationship with the facility. Acquiring a loan from a familiar environment may improve chances of acceptance.

Before choosing a specific financier, ask the lender for references or interview other business owners. Determine which facility treats clients fairly, provides assistance with applications and documentation, supplies entire loan amounts, and how the institution handles small business hurdles. Loan brokers evaluate the needs of small businesses and provide suggestions regarding other lending institutions. Higher rates accompany these loans for services rendered. However, in many instances, the firms supply approvals not otherwise easily acquired.

Loan Types

Small business applying for loans can expect interest rates ranging from 8% to 14%, plus application fees (typically <$100) and other stipulations. Beware of low cost loans that add hidden fees that in effect cost the proprietor more in the end. Loan types vary in the amounts available and the time of repayment. If desiring to pay off a loan in its entirety prior to the projected period, ensure no early repayment penalties apply.

Term loans require monthly payments over a specified length of time. Proprietors use short-term loans for needs that ensure a quick return. Companies repay the loan in one lump sum in a year or less. Line of credit loans provide small increments of money to generate constant cash flow. Many businesses acquire and pay off these loans annually.

Shoeboxed Small Business Accounting Software – Too Much Fun for Tax Time

Many experience the headaches and stress equated with tax time. Some go paperless, some use a box of receipts and others spend countless hours locating and organizing receipts and other bits of data required to authenticate expenses. All of these groups may want to consider using some free small business software that can make your taxes run more smoothly. The online software service, cleverly entitled “Shoeboxed,” saves the time consuming, tedious task of locating, organizing and categorizing all of that information by doing it for you.

Who Might Like Shoeboxed?

Individuals, small business owners or busy executives can benefit from the features the service offers. Upon opening an account, you can send business cards, receipts and other documentation to Shoeboxed in one of several ways.

• Use Shoeboxed postage paid envelopes
• Scan and upload
• Take pictures of documentation using a mobile phone or iPhone app and upload
• Email receipts and other data directly to your account

After receiving all the information, Shoeboxed goes to work categorizing, organizing and entering all of the data into the account. Shoeboxed uses optical character recognition and human verifiers, who accurately record every piece of data, including receipt notations. They will also verify business or vendor names and payment types.

Within 24 hours, users have the option of downloading, emailing, printing or viewing all of the files. Choose from 15 different categories in which to organize data including meals/entertainment, office supplies, and computer/internet expenses.

Integration with Other Accounting Software

The software also conveniently integrates with other services for exporting data. These include BatchBook, CSV, Excel, PDF, Quicken and many others. Certified by TRUSTe, the information remains secure, providing private access to all of the necessary business financial figures. In addition, the company supplies clients with a quarterly back-up CD.

Shoeboxed is similar to having a virtual secretary. Once an account becomes established, automatically upload information as it comes along and the software handles the rest. Alternatively, save materials in an account envelope and mail to Shoeboxed at intervals for a fee.

Manage Contacts

The software can also help to save the laborious task of entering and organizing contacts. Instead, send the contact information to Shoeboxed and let the program handle the rest.

The features and services vary depending on the needs of individual clients and account services chosen. Shoeboxed is free to use if you plan on scanning documents yourself. If you want to mail in your documents or take an iPhone image and upload it, fees start at just under $10. Larger businesses with vast amounts of documentation require larger, more extensive file systems, but services do not exceed $49.95 per month.

Too Much Fun for Tax Time

No matter how you look at it, Shoeboxed is a good way to get organized, keeping your information secure and organized for very little cost. Like many other Google products, Shoeboxed is simple to use, effective and, admittedly, a little too much fun for something as boring as accounting!

Seven Places to Cut Business Expenses

Small Business

As we slowly climb out of the economic recession, it’s a good idea to continue the money-saving habits you developed during the crisis and apply the same principles to your business. A small business has fewer resources than a larger company and must find cost efficient ways to run things smoothly and keep them running in the future. Economic downturns run in cycles, so tightening you belt now will help you prepare for the next slump. In times like these, it’s not the best, most innovative or even the smartest business that succeeds. The one that succeeds is the one left standing when a bad economy starts putting others out of business. Think Bubba-Gump Shrimp.


Let’s begin with your overall expenses, or the overhead of your company. You could think about sub-letting your office space to help pay the rent. A virtual business can be run right out of your home, eliminating the cost of office space.


Speaking of employees, have you thought about saving on the cost of employee benefits by hiring freelance contractors instead?  Just be very careful if you head down this road. Unemployment Insurance laws in many states have a very broad definition of “employee.”

If you tell your workers what hours to work, where to do the work or prevent them from disclosing information about the assignment to others working under them, you could be putting your freelancers into the state’s definition of “employee.” Fines on such a misstep have put some companies out of business.

Labor and Benefits

If you are not comfortable taking on freelance help, then it may be time to consider ways to cut employee costs without damaging the lives of your employees too much. Maybe a four-day workweek would help. This could save you an entire day of energy expenses and a day of wages. It will require more productivity from your workers, so find affordable ways to compensate for the reduction. Consider a weekly hour-long outdoor excursion or perhaps a once a month day trip that employees can help plan. They will be more productive and less resentful of the pay cut.

Be sure to re-examine your employee benefits package every year and research potentially cheaper insurance policies. It is time to increase the employee contribution to the plan? Is there a cheaper plan with an employee deductible? There are many insurance options available to help you save. Explore them.


Most business owners are busy running the enterprise and fail to notice wasted energy. But when you begin looking at those mundane operations, you may notice potential improvements like sharing the printers between employees, installing movement sensors to make sure the lights are off when you are not using them, switching to recycled printer cartridges, or using laptop computers in the workplace. Just switching to laptops saves 90% of your computer energy consumption.


It takes months to get used to new technoologies, which is why many business owners are reluctant to make changes. But just think of the savings you could realize by switching to VoIP. Such services often include fax sending and other useful tools that can save your business a bundle on telecommunications. Many services now offer a server-based PBX systems that work just like the tradition phone services from a user’s perspective. Your front desk clerk may not even notice the difference!

And what about using Internet technology to replace in person meetings? Simply by holding meetings online via video conference or audio conference saves tens of thousands per year in travel costs for many small businesses.


Saving money on business-related costs can be found most anywhere…even in your advertising budget. Spreading the word about your company and its products is a costly investment that can be easily reduced. In fact, you are reading this post on the medium that can do more for your business on a small budget than any other advertising medium: the Internet! You can also begin using low cost online printing services and distributing your advertising materials locally at small businesses. A little leg work goes a long way.

Other Resources

In order to make your business ends meet, you need to think outside the box. Sometimes, it might serve you best to consider all avenues where you can cut costs and stretch your budget. If you want to raise capital, it can’t hurt to ask employees for ideas through a company contest. Maybe they can offer money-saving ideas. Being closer to the action, your employees will be more creative at finding solutions. The solutions are there, you just need to find them.