Quick ways to cut your monthly expenses

January 25, 2023

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Katherine Zacharias

Katherine Zacharias

Financial Professional



Encinitas, CA 92024

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December 12, 2022

Starting a business? Here's what you need to know.

Starting a business? Here's what you need to know.

Starting your business requires making a myriad of decisions.

You’ll have to consider everything from a marketing budget to the theme of your website to how you’re going to arrange your office. But if you give careful consideration to the financial decisions concerning your business, you’ll start off on the right foot.

What is your business structure going to be?

Business structures have different tax and liability implications, so although there are only a few to choose from, make your selection carefully. You may consider:

Sole Proprietorship

A sole proprietorship is the simplest of business structures. It means there is no legal or tax difference between your personal finances and your business finances. This means you’re personally responsible for business debts and taxes.

Limited Liability Company

Under an LLC, profits and taxes are filed with the owners’ tax returns, but there is some liability protection in place.

Corporation

A corporation has its own tax entity separate from the owners. It requires special paperwork and filings to set up, and there are fees involved.

Do you need employees

This may be a difficult decision to make at first. It will most likely depend on the performance of your business. If you are selling goods or a service and have only a few orders a day, it might not make sense to spend resources on employees yet.

However, if you’re planning a major launch, you may be flooded with orders immediately. In this case, you must be prepared with the proper staff.

If you’re starting small, consider hiring a part-time employee. As you grow you may wish to access freelance help through referrals or even an online service.

What are your startup costs?

Even the smallest of businesses have startup costs. You may need computer equipment, special materials, or legal advice. You may have to pay a security deposit on a rental space, secure utilities, and purchase equipment. Where you access the funds to start your business is a major financial decision.

Personal funds

You may have your own personal savings to start your business. Maybe you continue to work at your “day job” while you get your business off the ground. (Just be mindful of potential conflicts of interest.)

Grants or government loans

There are small business grants and loans available. You can access federal programs through the Small Business Administration. You may even consider a business loan from a friend or family member. Just make sure to protect the personal relationship! People first, money second.

Bank loans

Securing a traditional bank loan is also an option to cover your startup costs. Expect to go through an application process. You’ll also likely need to have some collateral.

Crowdfunding

Crowdfunding is a relatively new option for gathering startup funds for your business. You may want to launch an online campaign that gathers donations.

What’s your backup plan

A good entrepreneur prepares for as many scenarios as possible – every business should have a backup plan. A backup plan may be something you go ahead and hammer out when you first create your business plan, or you might wait until you’ve gotten some momentum. Either way, it represents a financial decision, so it should be thought out carefully.

Develop a backup plan for every moving part of your business. What will you do if your sales projections aren’t near what you budgeted? What if you have a malfunction with your software? How will you continue operations if an employee quits without notice?

How much and what kind of insurance do you need?

Insurance may be one of the last things to come to mind when you’re launching your business, but going without it may be extremely risky.

Proper insurance can make the difference between staying in business when something goes wrong or shutting your doors if a problem arises.

At the very minimum, consider a Commercial General Liability Policy. It’s the most basic of commercial policies and can protect you from claims of property damage or injury.

Make your financial decisions carefully

Business owners have a lot to think about and many decisions to make – especially at the beginning. Make your financial decisions carefully, plan for the unexpected, insure yourself properly, and you’ll be off to a great start!

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This article is for informational purposes only. For tax or legal advice consult a qualified expert. Consider all of your options carefully.

October 3, 2022

5 Things to Consider When Starting Your Own Business

5 Things to Consider When Starting Your Own Business

Does anything sound better than being your own boss?

Well, maybe a brand new sports car or free ice cream for life. But even a state-of-the-art fully-decked-out sports car will eventually need routine maintenance, and the taste of mint chocolate chip can get old after a while.

The same kinds of things can happen when you start your own business. There are many details to consider and seemingly endless tasks to keep organized after the initial excitement of being your own boss and keeping your own hours has faded. Circumstances are bound to arise that no one ever prepared you for!

Although this list is not exhaustive, here are 5 things to get you started when creating a business of your own:

1. Startup cost

The startup cost of your business depends heavily on the type of business you want to have. To estimate the startup cost, make a list of anything and everything you’ll need to finance in the first 6 months. Then take each expense and ask:

  • Is this cost fixed or variable?
  • Essential or optional?
  • One-time or recurring?

Once you’ve determined the frequency and necessity of each cost for the first 6 months, add it all together. Then you’ll have a ballpark idea of what your startup costs might be.

(Hint: Don’t forget to add a line item for those unplanned, miscellaneous expenses!)

2. Competitors

“Find a need, and fill it” is general advice for starting a successful business. But if the need is apparent, how many other businesses will be going after the same space to fill? And how do you create a business that can compete? After all, keeping your doors open and your business frequented is priority #1.

The simplest and most effective solution? Be great at what you do. Take the time to learn your business and the need you’re trying to fill – inside and out. Take a step back and think like a customer. Try to imagine how your competitors are failing at meeting customers’ needs. What can you do to solve those issues? Overcoming these hurdles can’t guarantee that your doors will stay open, but your knowledge, talent, and work ethic can set you apart from competitors from the start. This is what builds life-long relationships with customers – the kind of customers that will follow you wherever your business goes.

(Hint: The cost of your product or service should not be the main differentiator from your competition.)

3. Customer acquisition
The key to acquiring customers goes back to the need you’re trying to fill by running your business. If the demand for your product is high, customer acquisition may be easier. And there are always methods to bring in more. First and foremost, be aware of your brand and what your business offers. This will make identifying your target audience more accurate. Then market to them with a varied strategy on multiple fronts: content, email, and social media; search engine optimization; effective copywriting; and the use of analytics.

(Hint: The amount of money you spend on marketing – e.g., Google & Facebook ads – is not as important as who you are targeting.)

4. Building product inventory

This step points directly back to your startup cost. At the beginning, do as much research as you can, then stock your literal (or virtual) shelves with a bit of everything feasible you think your target audience may want or need. Track which products (or services) customers are gravitating towards – what items in your inventory disappear the most quickly? What services in your repertoire are the most requested? After a few weeks or months you’ll have real data to analyse. Then always keep the bestsellers on hand, followed closely by seasonal offerings. And don’t forget to consider making a couple of out-of-the-ordinary offerings available, just in case. Don’t underestimate the power of trying new things from time to time; you never know what could turn into a success!

(Hint: Try to let go of what your favorite items or services might be, if customers are not biting.)

5. Compliance with legal standards

Depending on what type of business you’re in, there may be standards and regulations that you must adhere to. For example, hiring employees falls under the jurisdiction of the Department of Labor and Federal Employment Laws. There are also State Labor Laws to consider.

(Hint: Be absolutely sure to do your research on the legal matters that can arise when beginning your own business. Not many judges are very accepting of “But, Your Honor, I didn’t know that was illegal!”)

Starting your own business is not an impossible task, especially when you’re prepared. And what makes preparing yourself even easier is becoming your own boss with an established company like mine.

The need for financial professionals exists – everyone needs to know how money works, and many people need help in pursuing financial independence. My company works with well-known and respected companies to provide a broad range of products for our customers. We take pride in equipping families with products that meet their financial needs.

Anytime you’re ready, I’d be happy to share my own experience with you – as well as many other things to consider.

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August 15, 2022

5 Challenges for Entrepreneurs

5 Challenges for Entrepreneurs

Starting a business can be an exhilarating experience.

It may seem like the next logical step for someone who’s looking to grow and develop their career. But before you take that leap, it’s smart to consider the pros and cons involved with entrepreneurship. In this article we’ll explore five things that budding entrepreneurs should think about before starting a new business venture!

The first thing to consider? Startup cost.

Depending on your idea, take some time to research what equipment or things will be necessary for getting started. Every penny counts. For example, if you’re opening an ice cream shop— which may seem simple enough—you’ll need freezers, scoopers, a storefront, and, of course, ice cream. That’s a lot of upfront investment for a little ice cream shop!

The second thing to consider is competition.

It’s wise to research what types of businesses already exist in your space before jumping into entrepreneurship. For example, what if there are five dog parks within a couple of miles from where you live and you want to open up a sixth? This may be fine if there’s a large population of dog owners in your area. But unless you’ve got a unique idea or innovation that will blow your competition out of the water, you may want to consider another type of business or a different location to get started.

The third thing to consider is customer acquisition.

How will you reach your customers? Do you know your exact market, their needs, desires, and insecurities? What’s the strategy for getting them in and keeping their business over time, even if there are competitors nearby with similar products/services?

At first, you might be able to rely on your friends and family as your first customers. But eventually, you’ll need to develop a marketing and brand strategy to acquire and keep new customers.

The fourth consideration should be building product inventory.

If you’re producing goods, do your finances allow for significant inventory investment? What if it’s a service-based business—will customers need to wait weeks or months before they receive the first round of services from their purchase with no cash flow in between?

When you first open, stock your business with every service or product you can possibly offer. Then, track which ones seem most popular and how much they sell. Then, start building inventory accordingly. You may need to scrap the services or products that aren’t making you money.

Finally, think about compliance with legal standards.

Some industries are regulated in ways that you may not anticipate. Food and beverage businesses need to follow health codes. Construction contractors must be bonded for their work on public projects like schools. And the financial industry is heavily regulated to protect clients. Whatever your industry, make sure you understand the legal requirements you’ll be asked to meet as a business owner.

There’s more to starting a business than excitement and glamour. It’s hard work that requires careful research and diligent preparation. Tackle these considerations before you start so you can lay the foundation for your business’s future success.

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January 31, 2022

How to Get Financial Security Through Starting a Business

How to Get Financial Security Through Starting a Business

The idea of starting a business is often intimidating for people.

They might be afraid they don’t have the money to launch one, or they’re not sure if their ideas are good enough to turn into reality and make a profit. It sounds like the exact opposite of financial security!

But that doesn’t have to be you. There are strategies to get financial security through business ownership. You just need to know where to start. Here are some options.

1. Start part-time. It might seem contradictory to start as a part-time entrepreneur. But if you’re new to business ownership, it’s a great strategy. Why? Because it helps limit risk—you’re not relying on this business’s success to put food on the table. If it fails, it’s not going to hit so hard. And that risk limitation can make starting a business far less intimidating.

2. Stick with what you know. It’s normal to feel inspired to create the next Amazon, Google, or Apple. But one of the biggest mistakes new entrepreneurs make is biting off more than they can chew. Big ideas can be counterproductive if you don’t have experience in very competitive markets.

Instead, start small by choosing a field that you know. Are you secretly a guitar shredding maniac? Offer music lessons to your neighbors. Marketer by day? Become a marketing consultant by night.

There’s data to back up this strategy. Entrepreneurs with 3 years of experience in their industry are 85% more likely to succeed than entrepreneurs with no experience.¹

So follow the data, and stick with what you know.

3. Solve a problem. All successful businesses solve problems. They eliminate barriers and ease headaches. They make shopping easier, networking easier, working out easier. Think about your skills. How can you apply them to a problem?

Worthwhile problems for your business to solve can be widespread, highly niche, or underserved.

But the “best” problems are all of the above—they impact a vast market, they demand highly specific solutions, and are currently unsolved. The solutions to those problems can create vast fortunes for those who discover them.

It’s possible to get financial security through business ownership. Part-time entrepreneurship, sticking with what you know, and solving a problem are just three strategies that can boost your cash flow and help you reach your financial goals.

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¹ “Research: The Average Age of a Successful Startup Founder Is 45,” Pierre Azoulay, Benjamin F. Jones, J. Daniel Kim, and Javier Miranda, Harvard Business Review, July 11, 2018, https://hbr.org/2018/07/research-the-average-age-of-a-successful-startup-founder-is-45

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