6 Business Tips for Your Clients to Manage Self-Employment
In his final article for the self-employment content series, Matt Baker addresses best practices for business owners and how accounting professionals can help.
While many of your clients have done a lot of prep work to launch their business, the shift to self-employment can still make them feel overwhelmed. They are now responsible for business planning, bookkeeping, sales and marketing, meetings, calls, email – not to mention doing the actual work. Article after article puts time management as one of the biggest challenges for entrepreneurs.
So how do they get everything done and done well? They need to have the right tools and strategies in place.
Here’s a starter toolkit with 6 business tips to share with your self-employed clients for best performance and efficiencies:
1. Set up a Business Bank Account
Keeping business and personal money separate is a fundamental piece of advice, and one that almost all experts agree on. Help your clients understand the value of taking this important step right out of the gate. It is crucial for their record-keeping, saving valuable time and stress when it comes to filing taxes.
There are also legal considerations. Commingling or misappropriating business funds can put them at risk of running into trouble with the IRS. The money that comes into a business is meant to be used strictly for business purposes, not groceries, personal vacations, or anything for their kids. Having a separate business account keeps business and personal expenses completely separate.
A business account also gives your clients a clear picture of their business cash flow and expenses, so they can determine where they may need to look for cost-savings, set targets, and plan for the future.
2. Get Paid Faster with User-Friendly Online Payment Tools
Roughly 80 percent of small business fail because of cash flow problems. Your clients need to make sure payments are coming in to handle the monthly expenses. This is where technology can be a huge advantage. User-friendly software can help your clients see business transactions from their desktop or mobile device, and the results.
Ask them how much they value the convenience of an ecommerce shopping cart or mobile point-of-sale system on a smartphone or tablet for their own personal shopping. Everyone is after speed and convenience, so these could be game-changers for their business, too.
Online tools help with repetitive tasks like invoicing, for example. This can be a time-consuming chore where your client is repeating the same billing task over and over again, from manually drawing up the same invoice for recurring clients to sending out reminder e-mails when the payment hasn’t arrived on time. Software programs offer a professional-looking template that can be used repeatedly.
There are also billing platforms that can generate invoices that recur automatically, generate and send automatic late payment reminders to clients and apply late fees to outstanding invoice balances.
3. Automate Accounting Tasks to Monitor Profitability
Your clients need to have a clear picture of where their business is at. This way, they can make changes to their marketing, pricing, and client roster, for example. Accounting software can automate routine and time-consuming tasks, like categorizing expenses, tracking time, and creating a Profit & Loss statement.
Your self-employed clients should get familiar with financial reports to really monitor the health of their business. The bottom line is profit, and the most important financial report is their Profit & Loss statement that tells them exactly how much money they’ve earned after expenses are paid out.
If your client has these statements automated and conveniently at hand, they can look back at their profit and carefully monitor where they’re going. This can also be an eye-opener. If their business isn’t profitable enough to pay them what they want, it’s not sustainable.
4. Get a System in Place for Managing Clients
Business is about people and building strong relationships. Your clients can make this a focus with a customer relationship management (CRM) system that delivers personal attention to their growing customer base and helps to generate new leads.
When it comes to CRM, there are free tools to get started with, like HubSpot that stores contacts and companies, and allows you to see and track all your customer interactions. If your client is interested in a full-service solution, they can upgrade to a fee-based membership that offers marketing to grow traffic and convert more visitors with inbound marketing campaigns.
5. Chart Progress with Simple Budget Tools
It’s all too common for people to get caught up in the day-to-day tasks of running their business. But they need to know if they’re on track with their goals and plans, and reset their course of action when required. These days, people have to be responsive in their self-employment – and that means paying attention to the details.
Using mobile apps is a popular way to help manage finances and keep a critical eye on budget. They’ve become like digital advisors that can give tips on when and how to spend funds and send alerts to detect amounts of “misspent” money.
6. Connect with Experts and Mentors
Networking may not be easy for your clients, but pitching their skills to a roomful of strangers is not quite so daunting with platforms like Meetup.com that congregates groups of like-minded people who share interests and professions.
These groups organize and run offline events so users can connect with each other on a local level. Your client can get familiar with the group before they walk through the door! They can meet peers and mentors who can help them work through challenges, lead to new opportunities and online marketplaces to build their business.
As an accountant, you have a unique lens into the businesses of your self-employed clients. Giving them a toolkit to build their business is both valuable and reassuring, especially for those entering the world of entrepreneurship for the first time. These 6 tips will help set them up for success and return visits for your expert services.
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Matt Baker is a personal finance and small business expert with a long track record of successfully bridging the worlds of business and technology. He’s currently the VP of Strategic Planning at FreshBooks, where he oversees the company’s financial and long-range business planning. Prior to joining FreshBooks, Matt held roles in management...