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Don’t Let Your Taxes Sneak Up On You, Do This Instead

Taxes don’t come out of nowhere, yet somehow it’s easy for us as business owners to get caught unprepared. As both a bookkeeper and financial coach, I see this often, but it has a simple fix. This month I’m reviewing mistakes women told me they learned from early on in their solopreneur careers. Let’s unpack this one:

The Mistake

One woman I spoke with told me she regretted not setting aside money for taxes. Some women also told me they were initially surprised by the additional self employment tax. Clients often come to me after they’ve been hit with the tax bill. At this point, we have to pay off the tax debt and save for this year’s taxes. Doing both is tough, and can make a real financial mess for new business owners. 

The Solution

To solve this problem, I recommend two things. First, work with a tax preparer or bookkeeper who will help estimate a percentage to be held out for taxes. You can read more of my advice about working with a bookkeeper here. Putting money aside will help avoid that nasty surprise.  This can also be a precursor to implementing the Profit First system, which is designed to keep your business prepared to pay its expenses, and pay you a fair wage. If you want to go the extra mile, you can also read my article 5 Steps to Prepare for Tax Time. 

Although recovery from this type of situation needs to be thorough, it’s a chance to implement new and better systems and get your business organized. I hope you appreciated these insights, stay tuned for next week’s article!

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Angela

How to Create A Business That Restores You

A lot of people start their business with hopes for a better life in mind. More freedom, more money, a better schedule, and a legacy to pass on are just a few things that people starting out on their solopreneur journey might hope for. However, once a business gets going, whether it’s a full time project or a side-hustle, for many it becomes a demanding enterprise. My goal is to bring the solopreneur’s relationship with their business back into balance, by making sure the needs and desires they set out to meet in the first place are organizationally and financially prioritized.

So, how do we do this? The path toward creating a business that is restorative to you, the owner, combines intentional decision making and organizational action. Here are a couple key factors I’ve identified through my work with clients:

Boundaries

I recently review Jennifer Armbrust’s awesome book, Proposals for the Feminine Economy, in which she introduces twelve principles for feminist business. Principle number one is very simple: “You have a body.” While this can be interpreted in a number of ways, to me, it’s a reminder to slow down and set reasonable expectations for myself. By keeping my physical and mental limits in mind when setting up my schedule, choosing my daily tasks, and considering the scale of my own business, I’m able to avoid exhaustion and burnout. Some solopreneurs leave the corporate world or another industry in hopes of finding better work-life balance on their own. Healthy boundaries around when and how much you work can help you realize that dream and restore mental and physical wellbeing.

Clear Objectives

Consistently, I ask my clients to consider their “money why” – the clear financial objective they aim to achieve through running their business. Your money why can be a very specific goal like saving to buy a house, or it can be more general, like sustaining your budget. I have an article all about how to set income goals based off your needs. Reading it and doing a check in can help you establish your own clear objectives. By keeping your efforts focused on those, you can make sure specific needs and desires are met.

Quarterly Profit Distributions

This is one of my favorite practices from the Profit First system. To use this practice, during a fiscal quarter, you collect a portion of your profit in a specific account. At the end of the fiscal quarter, you take whatever money has collected and use it to reward yourself and celebrate your hard work. This is a great way to stay energized in your business. You can take this reward without guilt because you have the system in place to know your business is healthy, and this money is specifically set aside for you. If you’re intrigued by this concept, I encourage you to download the first 5 chapters of Profit First and play around with my allocations calculator!

I hope these ideas help you see a path towards your own restorative business. If you’re interested in learning more about what I do with my clients, you can check out my Services packages or schedule a call with me.

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Angela

Image:  Meghan Schiereck

How to Start A Goal-Based Business

How to Start a Goals-Based Business: At Peace With Money

I want everyone to be able to align their business profits with their life goals. But, what does that really mean? You may have all kinds of life goals. Is it really possible to build a business that can help you bring them to fruition? The answer is a resounding yes.

Step One: Dig Deeper

The first step in any intentional process, like designing a business that supports you financially and fulfills you emotionally and spiritually is to spend some time thinking deeply. If you aren’t sure what your goals are, it’s time to figure that out! Envision your life in 5 years, 10 years – where do you want to be? what do you want to be doing? What are you most passionate about? Will starting this business help you get where you want to go?

It’s All Related

To help you think about how your life goals and your business are intertwined, consider this example. Let’s say Sandra is a talented jewelry maker, but she is also deeply passionate about dance. She wants to build a jewelry business that supports her and helps make ends meet. She also wishes to have ample time to attend dance classes, events, and begin performing live. By building up her business so that it runs profitably, efficiently, and provides her with a steady paycheck through the implementation of the Profit First system, she can have more time to put towards her dancing.

Even though Sandra is not choosing to monetize the very thing her personal goals attain to – dancing – she is making more room for it in her life by expanding her business and its capacity to efficiently support her. In this way, her business profits directly support her achievement of her life goals. Some other examples might include building a business that includes a lot of travel if you dream of globetrotting, or creating a business which is founded on ethical principles you’d like to see manifest in the world.

Often, I think we look at business as being a rather sterile aspect of our culture and lives – it’s just the way we make money. In fact, it can be the very opposite. It can be the vehicle for achieving your dreams and visions, whether directly through your business, or via expanding the profits and efficiency of your operations. Starting and running a business is inherently creative – what are you going to create?

If you find you need some guidance in working through the questions I bring up here, I encourage you to reach out. I’m always happy to talk with solopreneurs about how they can achieve their goals through their business. Click right here or on the Services tab up top to learn more about what I offer and how you can schedule a call!

For more reading and resources on this topic, I recommend my article, “What’s Your Money Why?” which touches on some similar subjects and may help you consider these questions more deeply.

Angela

Image Sources: Florian Klauer  Amy Shamblen