Tax season is a headache for most people, and small business owners are no exception. In fact, nearly six out of 10 small business owners in America say taxes are one of the top factors affecting their success, according to the Bank of America Small Business Owner Report.
Yet the potential of a tax refund can be the light at the end of the tunnel.
If you do expect a refund, tax season is a good time to reflect on your business. Receiving a lump sum of money can provide you with the incentive you need to take note of the ways you might invest in your business to make it better, and can spur you to ask some new questions about your growth strategy.
There are a number of sources you can turn to if you aren’t sure of the best course of action for your business. “A first step you should take is to speak with your banker,” says Robb Hilson, small business executive for Bank of America. “A dedicated small-business banker who knows you and your market can help you make the best decisions for your business – not just during tax season, but all year round.”
For those expecting a tax refund, here are six tips for small-business owners to consider in order to get the most bang for their buck:
* Invest in technology. Purchase new technology that will make your business run more smoothly. For example, replace traditional cash registers with tablets that allow you to check out customers from anywhere in the store, or switch to electronic invoicing so you get paid faster. Technology that makes your life easier will allow you to focus on doing what you love instead of taking care of the books, filing paperwork or trying to fix old equipment.
* Upgrade your environment. Is your office space getting a little run-down? Consider sprucing it up a bit. According to The American Society of Interior Designs, employee satisfaction and productivity rise in aesthetically appealing workplaces. You don’t have to spend much – even the color of the walls can make employees feel more inspired or more compelled to collaborate.
* Get the word out. Help get the local community buzzing about your business by reinvesting your tax return into a strategic marketing campaign. There is a lot you can do to reach new customers – from traditional advertising in the newspaper and on your local TV channel to marketing yourself in innovative ways online. Consider purchasing a software tool such as ExactTarget, which allows you to develop a targeted email marketing campaign, or hire a local videographer to create some interesting content for your Facebook or YouTube page.
* Invest in your staff. Put the money towards one of your most important assets – your people. Pay for training courses to help them better their existing skills or to learn new skills. Or reward them for their hard work with a small bonus or gift. By fostering an environment of employee value and appreciation, you’ll likely get back what you put in.
* Start thinking about growth. Have you been looking for some seed money to purchase more property or hire additional staff? Think about how this money could jump start a bigger investment you’ve been waiting to make. A little extra capital can go a long way when making a larger investment that you would have otherwise needed more financing for. This money could be just what you need to get your loan started.
* Put it away for next year. What if you don’t receive a tax return next year? Store your return away and save it for your 2014 taxes, just in case.
“Getting a lump sum of money from a tax return is really a unique opportunity to re-invest in your business,” says Steve Strauss, a small-business specialist and columnist. “The best small-business owners have a few things in common, and a main one is this: they know that business opportunities don’t come along every day, and so when they see one, they work hard to take advantage of it. This tax season, getting a refund is one of those opportunities. Don’t let it go to waste. Be smart with your money and use it strategically to grow your business.”
This article is for informational purposes only. Please consult your tax advisor because neither Bank of America, its affiliates, nor their employees provide tax advice.