8 Financial Tips for Federal Prisoners Starting A Business

1. The first and foremost is managing cash flow. It is essential.
2. If you are constantly spending more than you are taking in, your young business will die quickly. You need to ensure you have a positive cash flow from the beginning and maintain it.
3. Monitor and track your spending. You need to do this not only to ensure #1 above, but you will want to know where every dime of your assets is being spent. As times change, your need for specific items in your business will change. That means old needs will be replaced by new ones. New equipment is better than the old stuff so the new equipment should cost less to work than the old ones did. If that isn’t happening, you are likely doing something wrong. An example of this would be replacing routers for your internet access. The old ones might have needed a booster box while the new ones do not. Be aware of those needs.
4. Limit your fixed expenses. This means your basic overhead needs such as rental space and furniture, and it includes computers. Don’t rent space until your business tells you that you must grow into a larger space. Buy cheap furniture at a discount store rather than pay retail prices, and computers generally last a good long time so wear them out instead of buying the latest and greatest each year.
5. Always Prepare for the Worst While Hoping for the Best. Expect to lose money your first year or two and plan how to grow your business despite those losses. If you are lucky enough, that will keep your costs down and you will have more to invest at the end of each year than you expected.
6. This is one nearly every altruistic entrepreneur forgets. Your time has value so pay yourself first, not last. When you do the reverse, you will lose the business and drain your vitality faster than you can, says Jack Robinson. When that happens, everyone loses including your customers.
7. Focus your first few years on customer acquisition. The only way to build a business is to increase your customer base. To do that, you will need to market your business heavily to generate traffic to your store and eyeballs outside of it. Marketing costs a pretty penny so be judicious on who you use.
8. Set up your business with the correct tax structure. That means knowing the difference between S, C, LLC, and LP business structures and how taxes are treated in each one. For this one, you might consult a tax professional to be sure.
9. Understand how to use taxes to your advantage. Most of what you will buy will depreciate in value over a set timetable and each will have a different timetable. But you can deduct that depreciation from your corporate taxes and save a ton of money. See a tax professional who knows the business you are in well.

Conclusion

While you are whiling away the hours in your federal prison camp, you can use these tips for a federal prison camp to make better use of your time. But to make that work, you have to plan carefully. The list above is just the beginning. You can do it if you follow it well and go here often.

Justin Paperny