California is, of course, a beautiful state – with people, beaches and terrain to match. However, throughout the pandemic, it has also served us well in a less visible way – through its ability to foster a burgeoning small business ecosystem.
According to a GoCardless report that highlights the best states to start a small business in, California ranks the highest due to its big community and high disposable income. Small businesses account for nearly half (46%) of the state’s overall payroll, and the average disposable income per capita is $57.3K ($8.5K above the national average).
Naturally, this is great news for all Californians looking to start a small business this year; and though many may be filled with trepidation to do so on the heels of the pandemic, there are a few key foolproof steps to keep you on the right track:
Finalize your bottom line before you start. Understand the financials you currently have in place, what funds your business will need over a certain time period, what it will take to remain profitable, and milestones you should be reaching at various points in your timeline.
Invest in a solid tech stack. Many startups and young businesses try to cut costs everywhere possible, but that’s not always the smartest long-term strategy. Investing in certain software – for example, accounting platform Xero – allows you to track cash flow in real time, run your business “on the go” and save valuable hours on back-end functions. And these kinds of integrations have become increasingly popular since the pandemic. With Xero, businesses have access to a thriving ecosystem of more than 800 third-party apps that support everything from inventory to project management and more, so businesses have an array of options to build a customized tech stack.
Surround yourself with the right team. Being a business owner can be lonely and overwhelming. Working with an advisor or a bookkeeper you trust will help you double your chances of survival. Their expertise can save you time and energy to focus on what matters most: your products and services. Additionally, with the help of a trusted advisor, you’ll be able to work closely with someone who understands your finances and can help you make educated decisions about your business. Getting advice from someone who has years of experience with small and growing businesses similar to yours will help set you up for success from the start.
Given the immense amount of pressure that businesses are under in the face of the pandemic, it’s understandable that many entrepreneurs are pumping the brakes on setting up shop – but California provides an unparalleled opportunity for success if the appropriate steps are taken in preparation. It’s an opportunity that should certainly be taken advantage of, regardless of how daunting the environment may seem.
About Marie Phillips, CPA
Marie started her career as a financial analyst working for PepsiCo and Forever 21. Her entrepreneurship mindset and passion for technology and streamlining processes led her to the public accounting industry.
About Connected Accounting
With over a decade of experience in accounting services, Marie started Connected Accounting to help business owners scale their business. She is passionate about saving her clients valuable time and transforming their businesses.