Launching a new company can be a mixture of confusion and fear. Luckily, most owners can deal with the latter on their own. That still leaves unanswered questions about all sorts of subjects, like when the first tax returns will be due. Additionally, owners who wish to free up cash by refinancing student loans wonder whether their credit scores will be affected.
Then there are technical aspects that can perplex first-time entrepreneurs. That category includes questions about break-even points and target markets. Here are the four most frequent subjects people ask about when launching a small business.
Will Student Loan Refinancing Affect My Credit?
Entrepreneurs prefer to reduce their personal expenses as much as possible before launching a business. One of the most powerful tactics for reducing monthly costs is to refinance student loans. When borrowers refinance successfully, they can reap multiple rewards, including more lenient terms, lower interest charges, and reduced monthly payments.
But many founders worry that applying for a refi might ding their credit scores. The concern focuses on whether a student loan refinancing application triggers a soft inquiry vs hard inquiry, and what the effect might be. It’s important to remember that several lenders only do a soft pull for refi applications, but a few perform a hard inquiry. The latter tends to reduce credit scores, while soft pulls don’t. For anyone considering a refi, it’s essential to review an informative guide that explains how the two kinds of inquiries differ and how each one is related to personal credit scoring by the three major bureaus.
What is the Target Market?
There are many free marketing ideas out there but if you don’t market to the right people, it doesn’t matter. Target market is a very old advertising term that refers to a company’s specific customer demographic or the one they’re aiming to capture. An e-commerce seller might do extensive research that shows single adult men in their twenties, with at least two years of college, are more likely to buy the company’s product.
It’s possible to arrive at an even more detailed description of the target group by adding characteristics related to homeownership, income, marital status, the type of vehicle they drive, how long they’ve remained with their current employer, and countless other categories. In short, it’s critical to learn as much about your target market as possible to cater to their needs with products and services.
When Are Tax Returns Due?
Before launch, find out when the first tax returns are due for your organization. Hire an experienced accountant to do the filing. Still, every owner should know that for 2023, most small business entrepreneurs need to file by April 18. However, partnerships, S Corporations, and LLCs that have more than one member need to file by March 15, 2023.
What is the Break-Even Point?
When the company’s expenses and revenues are equal, that’s the break-even point. Owners should know the dollar value of sales it takes to reach the BEP. Don’t forget to include your own salary as a fixed expense when calculating the break even point. Use profits to expand the organization via advertising, additional employees, additional inventory, and more.