As a small business owner, implementing strong financial and tax planning strategies is critical to ensuring a successful and profitable business. However, tax season still overwhelms many entrepreneurs, especially those without professional support.

In the inaugural episode of CO—’s Ready. Set. Scale. event series, Jeanette Mulvey, Vice President and Editor-in-Chief of CO—, interviewed experts about the challenges many small business owners face during this time. They provided practical solutions for effective financial management and tax optimization year-round.

  • Keith Peterson, Co-Owner and Financial Manager at River Rock Outfitter, discussed the intricacies of his company’s tax planning and shared effective habits small businesses can adopt for better financial management.
  • Ada Vaccaro, Senior Director of Partnerships and Sales at Bench Accounting, shared tips to help small business owners keep their books in order all year long to maximize their tax returns and avoid penalties.
  • Barbara Thau, Editorial Director of Features for CO—, explored small business trends and how entrepreneurs can capitalize on them in today’s evolving market.

Balance short-term tax mitigation strategies with your long-term financial goals

River Rock Outfitter, a finalist for the U.S. Chamber of Commerce’s 2023 America’s Top Small Business Award, attributes its success in part to its financial and tax planning. Through smart tax burden mitigation strategies, such as spreading out tax payments throughout the year and aligning owner compensation with employee pay cycles, Peterson said the company has effectively stabilized its cash flow throughout the fiscal year.

A word of caution: Peterson noted that some strategies that provide immediate tax relief may not always align with a business’s long-term financial strategy. Significant asset purchases, like equipment or vehicles, should be part of a broader financial strategy rather than using them solely as a tax write-off.

“When we look at buying assets, we look at providing a long-term value,” Peterson explained. “We look at it more as a pure investment, and we'd like to plan for those big expenditures.”

Instead of buying assets, River Rock leverages employee-related expenses, including bonuses and investments in continued education and training, to reduce its tax liabilities and enhance loyalty and satisfaction, Peterson said.

[Read More: How Often Should You Revisit Your Financial Plan?]

Prepare for tax season throughout the year

According to Vaccaro, entrepreneurs need to prepare their business's bookkeeping all year to ensure they don’t lose track of any deadlines or forms that must be filed during tax season.

“Have a solid bookkeeping system in place, because you will pay more in taxes than you need to if you do not have a comprehensive set of books that is optimizing every deduction,” she advised.

She noted that the outcome and number of tax deductions you're eligible for will depend on the quality and accuracy of the information you provide, from payroll reports to bank statements to merchant reports and loan statements.

If you find yourself subject to IRS penalties and fees, Vaccaro recommends getting your books up to date to compare how much you actually owe with what the IRS is claiming you owe. Then, consider enlisting the help of an expert.

“You can … get a tax resolution advisor, someone to negotiate for you on your behalf with the IRS, to get that bill down,” Vaccaro added.

[Read More: What Is the Difference Between Accounting and Financial Planning?]

Have a solid bookkeeping system in place, because you will pay more in taxes than you need to if you do not have a comprehensive set of books that is optimizing every deduction.

Ada Vaccaro, Senior Director of Partnerships and Sales, Bench Accounting

Capitalize on current market trends for small business success in 2024

As CO—’s Editorial Director of Features, Barbara Thau keeps a close eye on emerging small business trends and provides practical advice for how entrepreneurs can take advantage of them. She highlighted three key small business insights based on recently published feature articles:

Leverage Amazon’s tools for help with small business product development

Amazon is looking to solve small business supply chain and product development pain points through its Supply Chain by Amazon platform. This platform guides sellers through the supply chain with tools that help these businesses grow, such as AI-enabled features to manage product development tasks like generating product listings.

“These small businesses are the little engines that could,” Thau said. “They're providing this giant market to the big businesses, so they’re catering to them. [It’s] this sort of democratization of the playing field.”

‘Newstalgia’ is driving business in 2024

Nostalgia is “in” right now, from the 2023 “Barbie” movie to the recent revival of classic items and brand logos from companies like Hasbro, Pepsi, and Bloomingdale’s.

“The ‘newstalgia’ trend is this reinterpretation of the past, and [brands] are tapping into this mass affection,” Thau explained.

Newstalgia can be seen throughout modern consumerism, as iconic brands revitalize themselves to appeal to a new audience.

“Gen Xers, … as well as Gen Z, and … the Alphas will be nostalgic for things that they didn't even live through,” Thau said.

Tap into the past for success in the present

Beyond “newstalgia” revivals, Thau noted that the past can inspire the creation of new products, too. For instance, Rosa Li, Founder and CEO of Wildwonder, broke into the $19.3 billion probiotic and prebiotic drink market by leveraging the traditional Chinese healing tonic recipes and herbal remedies passed down from her grandmother.

Li’s grassroots approach to success involved knocking on the doors of hundreds of grocery stores and later pitching her product on ABC’s “Shark Tank.” Throughout her entrepreneurial journey, Li has transformed challenges like supply chain issues into opportunities, driving her business to success.

“[It’s] a story about tapping into a market, differentiating in that space, ... scaling smart, and learning from your mistakes,” Thau said.

[Read More: 7 Marketing Trends Every Small Business Needs to Know About in 2024]

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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