If you’re planning to start your own business in 2019, here’s some advice to make it an amazing year!

Thank you to Mountain Ridge for sponsoring this post.

Tax season is upon us, which means that it’s a great time to get your finances in order for the year. If you’re thinking about starting your own business in 2019, it’s important to know what you’re getting yourself into financially. It’s very important to get a grasp on the financial side of things before you take any further steps – starting a business is not something you want to do impulsively!

Self-Employment 101: Managing Your Business Finances With Mountain Ridge

If you’re used to working for someone else, dealing with business finances is a whole other beast. Here are some important questions to ask yourself before you take the plunge:

• What type of business are you launching? The type of business you plan to start will inform how you manage the financial aspects. For example, my own business required almost nothing in startup costs since I originally started it as a free Blogger.com account; but if you’re planning to open something like a restaurant or retail store, your startup costs will be very different. It’s important to do extensive research beforehand, so that you don’t end up spending far more on your business than you anticipated or launching a business venture you can’t afford.
• How will you finance it initially? I started my business by registering a domain name which probably cost around $1, so I essentially started my business with the spare change hanging around my purse! 99% of businesses will require more than “A couple of bucks I found in the couch cushions” to start, so you’ll need to consider whether this money will come from a bank loan, personal savings or investors.
• What are your plans for growing the business? My business costs have obviously grown to be a lot more than that initial dollar investment. I re-invest some of my earnings back into the business to cover expenses, which makes practical sense for the type of business I’m running. Your own business plan may require taking out a loan to keep up with needs. There is always a fine balance to be found between spending enough so that your venture can grow, but not spending so much that you cut into your profits excessively – or worse, accumulate debt that doesn’t even result in higher earnings.
• Have you sought advice? Talking to others in your desired field can help give you a reality check about what to expect starting your business venture, so it can be helpful to “Talk shop” with colleagues – just don’t harangue them for too much free advice! While your peers make a good sounding board, the people whose brains you should really be picking are professionals. Get a recommendation for a great accountant who is familiar with your line of work – you will need one. Depending on the type of job you’re doing, a consult with a lawyer may be necessary also. And depending on how you finance your business, you may need to speak with your bank or a debt consolidation agency such as Mountain Ridge.

What is debt consolidation, anyway?

Debt consolidation refers to a refinancing process where you take out one large loan in order to pay off a myriad of others. For example, if you have three different credit cards that have all amassed debt, you might choose debt consolidation through a company such as Mountain Ridge in order to pay off the three credit cards and consolidate all of the payments into one loan coming from one place.

Why choose debt consolidation?

The goal of debt consolidation is to obtain a lower interest rate in order to make debt repayments more manageable, and streamline all the loans into one single payment so that it’s easier to keep track of everything – for example, you might have a hard time keeping track of your loans if you have several, and run into issues with late payments simply because you forgot one or misplaced a bill notice.

Is debt consolidation right for me?

I take debt very seriously, and encourage great caution and thought before amassing any debt or taking out any loans. It’s crucial to seek advice from professionals to find out what the best course of action is for your unique situation. Read up on the topic, do extensive research, and talk to others who have consolidated their debt. With careful consideration, you can ensure that whatever decision you make will be the most fiscally responsible and beneficial to your budding business.

Self-employment taxes: One of the least fun parts of running your own business!

Consolidating debt is just the first step

Something important to keep in mind is that funding the launch and growth of your business is just one aspect of the financial management you’ll need to do. Will you have employees and a payroll? Are you prepared to do bookkeeping, or are you hiring someone else to do that? How will you manage taxes? After all, you’re the boss, so you’re the one withholding your own tax payments now – so you definitely need to make sure you think about that before you get sticker shock from a huge tax bill! Be honest with yourself, and dig deep; many businesses fail because they are poorly thought out. Don’t set yourself up for failure or take on debt that you can’t afford. As your mother always used to say, look before you leap!

Encouragement & coffee: Two very important things for any business owner!

Self-employment can be very challenging, but also very rewarding. The more prepared you are, the better you’ll do in your venture, so take your time – good things come to those who wait!

So tell me, readers: Have you ever used a debt consolidation company like Mountain Ridge before? What was your experience like? Tell me in the comments below!