Watch Your Business Expenses (Self-Employed)
Watch Your Business Expenses (Self-Employed)
Tools and equipment is not the only place where earnings evaporate:
* Real Estate - It also happens that some business owners have such dreams of growing into a big enterprise that spend too much on looking big. I once worked with a startup of 5 people who rented a building with space for 30. We where all working out of a conference room and the rest of the building remained empty forever (big waste).
* Utilities – Take the Internet for example. You can have “business grade” Internet, or “personal grade” Internet. If you are serving data from your business location, you may need business grade. But you may not be doing so. I host my business data in a data center, not at my business location. For my business location I use personal grade Internet.
* Business Meals – Uncle Sam is smart. They know that people have to eat to survive, so they count half of a business meal expense as deductible, and the other half as a living expense. Still, people are very tempted to overdo business meals. Not all business need them. Not all situations need it either, or not the expense.
* Travel – Travel is a place where you can really cut down on price. Using discounters (Southwest, JetBlue, etc.) and buying in advance helps. Also, you don’t need luxury hotels all the time. Remember, you are not on big company’s dime anymore. (That is, unless big company is paying, and will pay very soon).
It is important to watch business expenses carefully. Do not spend a $1 that you can’t justify will bring more than $1 back – more so that what you could have gotten with your current equipment, location, or services.
Remember: enjoying your business is a big portion of starting a business. But good financial practices will keep it afloat so that you can enjoy it longer. The competition may be watching their wallet: and you want to outlast them.
Watch Your Business Expenses SelfEmployed - To learn more about this author, visit Jose Anes's Website.
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Uncle Sam is lenient on business: you can deduct business expenses from earnings. This is a big difference from personal taxation: you are not allowed to deduct most living expenses out of a salary. However, there is a point where both things may get fuzzy: small business. Many small business owners enjoy what they do so much that they may get more excited about working and using their tools (business expenses) than about a good revenue. For example, a restaurant owner may get carried over on buying too much equipment (kitchen toys/tools). And I, a computer professional and day trader, have the risk of buying more equipment than I need: in part because I like working with the latest equipment a lot more than working with less up to date equipment.
Tools and equipment is not the only place where earnings evaporate:
* Real Estate - It also happens that some business owners have such dreams of growing into a big enterprise that spend too much on looking big. I once worked with a startup of 5 people who rented a building with space for 30. We where all working out of a conference room and the rest of the building remained empty forever (big waste).
* Utilities – Take the Internet for example. You can have “business grade” Internet, or “personal grade” Internet. If you are serving data from your business location, you may need business grade. But you may not be doing so. I host my business data in a data center, not at my business location. For my business location I use personal grade Internet.
* Business Meals – Uncle Sam is smart. They know that people have to eat to survive, so they count half of a business meal expense as deductible, and the other half as a living expense. Still, people are very tempted to overdo business meals. Not all business need them. Not all situations need it either, or not the expense.
* Travel – Travel is a place where you can really cut down on price. Using discounters (Southwest, JetBlue, etc.) and buying in advance helps. Also, you don’t need luxury hotels all the time. Remember, you are not on big company’s dime anymore. (That is, unless big company is paying, and will pay very soon).
It is important to watch business expenses carefully. Do not spend a $1 that you can’t justify will bring more than $1 back – more so that what you could have gotten with your current equipment, location, or services.
Remember: enjoying your business is a big portion of starting a business. But good financial practices will keep it afloat so that you can enjoy it longer. The competition may be watching their wallet: and you want to outlast them.
Watch Your Business Expenses SelfEmployed - To learn more about this author, visit Jose Anes's Website.
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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