So, what happens when you get into the business?
In a nutshell, TAX happens.
As business owners we can have a dislike of paying TAX and this can become such an obsession that it jeopardises you becoming a most profitable business.
So, how does this occur? It’s simple really. You instruct your accountant to prepare your books so you pay as little TAX as possible. While this makes sense from a cash flow perspective, it can lead to some really strange behaviour around tax time.
Have you ever made purchases because it made sense from a TAX point of view?
Have you ever pushed through expenses so that your profit was decreased and you got a tax advantage from doing so? Each time you do this you jeopardise becoming the most profitable business you can.
So why do it? It makes no sense to me at all. Most business owners want to grow their business and if they make no profit and pay no TAX the only way to fund growth is through DEBT.
Many small business owners have far too much debt. They never think about what they are building in the financial arm of their business and continually fall into the trap of trying to minimise their profit for tax purposes.
Can I encourage you to make up your mind NOW that you truly want to have a most profitable business. This will mean paying some tax, but at the end of the day your profit will provide the fuel to grow your business and you won’t need to take on more and more debt.
Discover how One Sherpa can help take the pain out of your business finances.