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Why being aware of misconceptions will make your small business stronger


There are many misconceptions out there that will hurt a small business. Many small business owners get sucked into misconceptions in many different ways that in the end, weaken their business. Whether the misconception starts from the product or ends in advertising, there are aspects of small business that are misleading and if owners don't educate themselves, they could end up paying some unnecessary penalties.

One common misconception is that it is possible to write off a hobby as a small business and then receive tax deductions. This could not be more incorrect. Sitting in an audit with the tax collector will only be an embarrassing interview where they will find out exactly what the business is. If the hobby doesn't make money and isn't run like a business, then it won't pass as a business and therefore cost extra money in taxes. To get around this headache, why not turn a hobby into a legitimate money making business? Starting a business with things that are interesting to oneself is double the satisfaction of making money with something that one loves. In the end, more hours will be spent working on the job and taking care to make the business successful. So don't call a hobby a business if it is not a business. Tax collectors are not stupid and will call one on it every time. Be smart, be honest, and be successful. Remember these things, and the tax breaks will come naturally.


Another common misconception is that keeping a financial book only needs to be done once a year for tax reasons. This also could not be more incorrect. The thought that keeping a financial book is a "nasty headache" and a waste of time is a lie that will greatly hurt a business. Knowing and keeping track of finances and making monthly reports will keep the business informed of its growth, losses, total profit, and everything else that are the important things to know about the cash-flow of a small business. Keeping track of these numbers monthly and going over them with an accountant will reveal a world of opportunity to save money, make money, and stimulate growth in a business that otherwise would have bit the dust a long time ago. There is plenty of bookkeeping software that has been developed to make this part of management easy and resourceful. After inputting the numbers into the programs, it is possible to extract complex information that can forecast the future of a small business.

And the last misconception of the day is that working from home is unprofessional and is disappointing to customers. And once again this misconception is just that, a fat lie. People who run businesses from home save money on office space, transportation costs, etc. Working from a home office actually impresses customers if the product delivers and they can get a fair deal. The home office is actually on the rise with home internet businesses, Realtors, and family owned businesses. Think of how smart the customer will think a business is if it is run from home and delivers in a way the competition can't. For some businesses, being this personal make customers feel more comfortable, and watch out, their wallets will just begin to fall on the floor and up. Money will flow like the Salmon river in the spring.

Remembering that just because there are a lot of small businesses that agree on certain assumptions doesn't make it business doctrine. Be aware of these misconceptions and make choices that don't shoot the business in the side.

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