311 - Are you more f*cked than you think?
On today's episode of the podcast we're auditing if your business is as fucked as you think it is.
Since the title of the podcast is Unf*ck Your Biz it only makes sense that we'd take a look at if our businesses are more fucked than we think. We're talking about why people make the mistake (and if it really is a mistake) to think of legal and tax things in a vacuum. We're not talking like deep imprisonment for tax offenses, we're more along the line of asking if things are slipping through the cracks because you're not thinking through things holistically enough.
For example, business entities, so like whether you should have an LLC or an S Corp, that is both a tax and a legal question. LLCs serve as legal protection, S Corps help save you tax dollars.
Recently an attorney I know sent an email saying to hire them for x,y and z before the end of the tax year to get your tax deductions in. If you've followed me for a hot minute you know that drives me bananas because buying things just to get the tax deduction is not great unless you truly need the thing. For example, if you're in a business growth mode, it may not make sense to buy something you need in December if you can buy it in January when you're in a higher tax bracket. It's a nuanced thing and it pisses me off when people make this blanket statement, especially to make a sale.
Similarly, we also need to think about contracts holistically because they impact our cash flow, tax payments and savings. This comes together with our payment plans. It impacts how you're going to be able to pay for things for example, are you taking all the money up front and you spend the money up front and don't have any left when you finish this project eight months later, that will impact you. Same with refunds. You need iron clad refund policies or you may find yourself issuing a refund that hits your bank account when you don't have the money to cover it.
Same with bookkeeping. We can't give you solid tax strategy if you don't have your books done.
I equate this to if you hired someone to do branding but you don't know who you're marketing to. You need to determine that based on several factors and is something you should know before you spend money on a designer. Same with knowing your messaging before hiring a copywriter.
Neglecting one thing in our business can impact another thing we're doing really well. For example, it's great to outsource tax services but if you don't do your bookkeeping, you also need to outsource the bookkeeping service so you can have your taxes done and aren't scrambling to do bookkeeping at the end of the year, especially because it doesn't help you keep track of profit and how your business is doing throughout the year.
With seasonal and launch-based businesses especially we want to avoid a feast or famine situation in business where you're left struggling for money in the slow seasons of your business. Same with contracts, if you don't have a solid contract and multiple clients come asking for refunds to big projects at the same time you may be left scrambling, and it may not be a client problem. It's also time to rewrite your contracts. These situations can impact the oh-shit cycle and leave you with not as much money as you forecasted.
It's important we take a holistic approach because everything impacts each other - your business entity, your business insurance, your bookkeeping, taxes, etc.
Enjoy the episode? I'd love to hear about it. Tag me on Instagram or send me a DM @notavglaw