Running a Small Business as a Sole Operator
Freelancing, working as a sole proprietor, and often working from home are becoming more common every day. Post COVID-19, major corporations are beginning to look at moving more employees offsite permanently, while others are moving to more outsourcing.
Microsoft just announced that they are going to expand their work from home policies. They are going to allow employees to request permanent home-work situations and expect to approve many of them. They are also going to allow moving and operating remotely across the country. The company may even cover many or all the expenses involved in a home office environment. There are tremendous opportunities developing for business startups by the sole operator.
If you are a freelancer, consultant, or other professional who is the sole owner and operator of your business, have you analyzed where and how you spend your time? Perhaps you are considering spinning off into your own remote freelancing business. An analysis of what activities produce revenue while others, though necessary, are not revenue-producing. They are part of doing business but are clearly “expenses” of time and effort.
Income and Expense Record-Keeping
The reality is that the burdens of government and taxation on small business, and particularly the sole operator, can be quite demanding. Every receipt, invoice, piece of paper, check, credit card receipt, and other documents must be saved, organized, and retrievable for tax filings and possible audits. Just pulling them together for your tax professional is a major time-consuming hassle. Business activities that create expenses and generate income are usually daily activities, and you may be spending far more time and effort than necessary to get the job done.
The busy freelancer or sole business operator should spend whatever time necessary to determine how to automate these activities as much as possible while maintaining accuracy, legality, and reliability. Every minute spent in dealing with these activities is a minute not spent in generating revenue and dealing with customers.
The Growth and Customer Side of the Business
The income side of the business involves marketing, invoicing/billing, collections, payment processing, customer relations, and more. Every one of these activities involves records, receipts, planning notes, communications, and other activities.
An analysis of the time spent in creating, maintaining, and monitoring the information involved in building a revenue stream that funds your lifestyle and grows the business is critical. It is important activity for business health, but it should not take so much of your time that you are sacrificing revenue generating activity or customer relations.
A System for Information Processes for Efficiency and Profits
Today’s business world is technology dominated, and that is a good thing when it comes to cutting the time involved in these management and oversight activities. Many business owners, especially sole operators, who use tools that are readily available to them in the digital world, find that they can save huge amounts of time and even improve their record-keeping.
Though there others, the two major players in capturing, organizing, and retrieving information on demand are Microsoft OneNote and Evernote. They have a great many features in common, a few pros for one and cons for the other, but both are extremely popular. Check here for a comparison review that may help you in deciding. Generally, the features that make them valuable, and check each for which are available with each, include:
Fast and easy capture of information into the system, including:
Images with smartphone sent directly with app.
Text in images indexed for later search and retrieval.
Forward emails into the system.
Web clipper to capture information from websites.
Audio notes from smartphone.
Handwriting notes for phones with a stylus, and recognition of handwriting for conversion to text.
Capture of hand drawings from smartphone.
Entry of notes on desktop, Android, iPhone, and tablets.
Organization and retrieval of information.
Notebooks or folders with the ability to organize data as it is captured by choosing notebook/folder for storage.
Tagging system to further organize information for fast search retrieval.
Search parameters to narrow searches for better results.
Merging of notebooks/folders.
Sharing of notes or whole notebooks/folders with assigned permissions.
Integration with other apps or systems for greater functionality.
Integration with third party email like Google and Outlook
Integrates with some sales applications like Salesforce
Using IFTTT or Zapier to move information from almost any other popular online system.
The key here is that there is a way to very quickly, and from anywhere, get information into one of these systems and file it in a way that works for your business. All your business receipts tagged by business use can be in a notebook and shared with your accountant with a couple of clicks. You can pull up any receipt, expense item, or income item with a fast and simple search.
The sharing feature is powerful when working with customers, clients, and vendors. Specific notes or folders can be set up with the information you want them to have and then shared for either viewing/download only or for editing for team input.
Whatever your small business, check these systems out to see how much of your time you can free up to grow your business while still getting the accuracy and reliability you need.
With Tax Hive’s years of experience in tax and business services, we use our expertise to make your life easier so you can focus on building your business. Ever changing rules require a team who knows you, your business and the tax implications. Our tax professionals meet your needs while helping you manage tax risk, control costs and reap maximum benefit. If you’re ready to get started, CLICK HERE to see if you qualify for a FREE strategy session with one of our specialists today.