This is going to be a bit embarrassing.
One of my personal challenges with being successful in building any kind of independent contracting type of income streams is the looming question of taxes. I didn’t know anything about how to turn my income into legitimate businesses.
I doubt I am alone. Most of the target market for doing affiliate and network marketing are people who have been working as employees all of their lives. The only tax form they know is the 1040 EZ. Their employer does all of the social security, Medicare, Health Insurance, Unemployment Insurance, and Pension issues for them. Employees just go get their check and either does their own taxes or have it done by a cheap service like H&R Block.
If you want to become truly independent and free from working for someone else it is paramount that you get the taxes and legal issues concerning your entrepreneurship right. This also includes things like benefits such as health insurance and planning for retirement and other insurance issues. Getting this stuff right gives you confidence in yourself and your business.
Life is like bookshelves in a library or shelves in a store. You have to know where everything goes or you will never be able to find anything. You would just throw everything on them as stuff or books come in without any way of finding them again. You would not know what books you had or where the products were on your shelves.
The money you earn and spend works the exact same way. When you go to do your taxes, you have to be able to not only show how much money you earned and spent but also where it came from and where it went. Otherwise they are numbers that you can’t account for and you can’t prove anything in your business.
What I finally did after literally years of walking around in the dark is to find an accountant to do all of my bookkeeping and accounting for me. I simply told her that I don’t have the mental capacity or the time to figure it out on my own AND be the creative force in my business. The worry and stress of doing that in the ugly, unprofessional and quite frankly completely innaccurate way takes all of the energy out of my enthusiasm for building the business. Plus, I was never going to get it right and that causes a lot of problems at tax time.
Now, don’t get me wrong. I do WANT to do it. I would RATHER do it myself. The reality of it is I CAN’T DO IT. I’m not stupid. I’m not lazy. But I am ignorant and unskilled at accounting and bookkeeping and in all matters of tax laws and organization.
This all came to pass as I was taking over the organization and management that my mother so brilliantly did all of her life before she died. My father is old and never did any of this. My mom did all of it and did it with unusual ease and without stress. She was an amazing woman for sure.
I quickly realized that I wasn’t going to be able to do it. So, I went to the accountant that my family had used to do taxes every year since forever and talked to them about what I was going to do to remedy this situation.
Luckily, the accountant has retired, although he is still in the office which is now a part of a large multi-state accounting firm, and a new accountant is doing our taxes now. She is “new school” and suggested we use the online tax accounting software they use or businesses to organize my family’s accounting. All I have to do is get her all of the statements to her and they would connect the bank accounts to it and it would organize the information for us. We simply keep all of the receipts, statements, and tax forms that we get in the mail at home and then when tax time comes, I will organize those receipts as the accounting shows it and everything will be streamlined. It will save us a lot of time and struggle to get the taxes done the right way every year.
Peace of Mind.
Knowing that the bookkeeping and accounting will always be up to date and accurate and that all of the taxes will be done correctly and on time gives you the peace of mind you need to think creatively AND more importantly accurately about your entrepreneurial ambitions. Now you can fully concentrate on what is really important in your businesses and that is how to grow it as big as you want it to become.
Predicting Your Business
How is it possible to possibly set goals if you do not know the numbers and what is going to actually happen to the money in your business?
People say stuff like, “My goal is to make $10,000 dollars a month.”
Well great! But, is that before taxes, insurance, cost of living and cost of doing business is taken out, or before? Is that the gross amount or the net amount.
If you want to “CLEAR” $10,000 a month you will probably need over twice that in revenue to be able to keep it. Now, what does that do to your goal setting and the things you have to accomplish in your business? It changes it a bit doesn’t it?
What do those numbers mean concerning where you live? If you live in one of the major cities or on the West Coast, $10,000 becomes more like what $3,000 dollars are in the midwest. Life is not equal everywhere in the United States. The cost of living varies drastically within the United States. A two bedroom home in San Francisco will cost you the same amount as an “Executive 5 Bedroom” home in the midwest.
In your business, it is quite the same thing. Even though you can work at home and save money from having an office somewhere, does it really make sense to do that? It is a decision you have to make.
For me, I don’t want to work when I am home except for writing! But, it helps me to be able to have all of my business stuff, and my work at an office. I don’t have to use up home space for my work. In
I am going to use my accountant to do all of my bookkeeping and tax reporting. She will show me what is going on and explain it to me. I will be able to look at the numbers and see what is going on and be able to make decisions based on accurate thinking.
Now I can go out and create the best business I know how to make and grow it using solid information and strategies. Now I can also tell others to do the same thing because in business it is all about the numbers and serving your customers and clients.
It literally feels like the anchor has been lifted and I can finally sail away and get my business moving forward.
I believe this area of being a free and independent member of a capitalistic society isn’t possible unless you get this set up first. Otherwise, you are always playing catch up, are in a panic mode an don’t know where you are going or what you are doing.
I guess for some this stuff may all be clear and easy. For
If you want to be your own boss, you have to know all of your numbers and be able to cover those issues as your employer did. It is the only way to be successful AND happy!