Thursday, December 19, 2013

Reducing taxes without breaking the bank

This is the time of year many business owners meet with their tax planners to get an idea of what the tax bill will look like come April.  Frequently, the tax planner advises the owner to spend before year end in order to reduce taxes.  It is obviously more enjoyable to spend money on a new laptop versus paying income taxes.  We caution our clients to keep the big picture in mind before going on a spending spree.  

A business owner should consider what are his/her cash flow needs are now and in the near future?  If you spend the money now to avoid paying higher taxes, will you have the cash you need to pay your rent, cover payroll and pay yourself?  Employing strategies to reduce taxes are great as long as they don’t create cash flow issues.  

Meeting with your tax accountant on a regular basis will help monitor taxes and control cash flow.  It is easier to deal with a growing tax burden throughout the year rather than getting panicked at this time of year and making rash purchases to reduce the tax bill.  A business owner will still need money in April to pay taxes so spending too much can backfire.

Being proactive always puts you in control more than being reactive!

Tuesday, December 10, 2013

Annual meetings for small business owners

Wow, how can it be December already!  This year has just flown by.  We just had our annual E&S Entrepreneur Advisors meeting and it was very worthwhile.  Legally, all LLCs are required to have an annual meeting, even the single member ones.  It can be boring to have a meeting with yourself, so we recommend meeting with a trusted friend or advisor.

We talked about where we have been and where we want to go with the business. We looked at numbers and statistics-who are our largest clients and what types of services generate the most revenue for us.  We went through each of our clients and gave a brief synopsis so we both know what is going on with them.  We keep notes on all of our client dealing, but it is nice to talk about things and not just read about them.  We set goals for each of our clients and ourselves.

We talked about needs for the upcoming year including technology and education.  We try to stay current with the systems and programs available to us and our clients.  While we are not cutting edge, we try to keep up with the ever changing environment.  I just got a new laptop and I am working on getting comfortable with it.  It has Windows 8.1 so I can toggle to a more traditional desktop which helps!

It is often hard to find time to take stock of your business when you are a small business owner, but it is really important to do so.  We are fortunate to have each other to bounce ideas off of and to make decisions about the future of the business.  If you are a solo business owner, it is helpful to find other small business owners or advisors to serve this role for you.  Taking the time to determine what has worked well for your business and what hasn't, what needs to stay the same and what needs to change is vital to all businesses.  Make it a fun meeting-chose an off site location and treat yourself and those you are meeting with to a nice meal.  You will leave feeling satisfied in many ways.