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Continuing the theme of supporting small business, here are some things that you should know if you are planning to make that move. Whether you are an entrepreneur with a dream, or a 9-5 worker with a side hustle, pay attention below.
If you do have a 9-5 and are considering making your passion project your full time gig, here are some signs that it may be a good time to take the plunge.
- Successful organic growth through word of mouth.
- It’s already profitable.
- It’s taken on a life of its own.
If it cuts into time away from your day job without results, you start making emotional rather than rational decisions, and if you keep making excuses and telling yourself things preceded by “once I quit my day job….,” then it may not be the right time or viable.
Make sure you also understand business entities. Know the differences between filing as a sole proprietor, an individual entrepreneur, an LLC - a limited liability company, a C-Corp (a corporation taxed separately from its owners) or an S-Corp (a corporation that is not taxed separately from its owners).
Source: USA Corporate
Once you decide what type of business you file as, there are several things you can do to make your operations run more smoothly. You can separate your business accounts and track revenue/expenses through accounting software tools such as QuickBooks, Xero, and Wave Apps. Tax planning throughout the year is also crucial, as well as cash flow planning through making quarterly estimates.
Making an end of year checklist is also an incredibly wise plan. Make sure your financial statements are in order, get your tax documents together, assess your goals from the previous year, and start strategizing for the next year.
Don't forget to plan yourself a nice vacation too - you earned it.