Running your own business is no easy task, but it can be especially difficult during tax season. From the moment you meet with your accountant to writing that big check to the Internal Revenue Service (IRS), your shoulders tend to be clenched tighter than a boxer in the middle of a fight. But, the good news is that once you pull off that band-aid, there are ways you can easily recover. The following are just a few ways to bounce back from taxes as a business owner:
How to Bounce Back from Taxes as a Business Owner
Create a Passive Income Stream
Relying on one source of income can be straining, even in the business world. When you only have one revenue stream, your business is reliant on customers buying products or services, both of which can fluctuate in different seasons. By creating a passive income for your business, you’ll stress less about sales and be able to put more into the business. Business blogging, YouTube videos, an app for your business are all great examples of a passive income that you could start utilizing this year.
Re-evaluate Your Expenses
Now is as good a time as any to really dive into your expenses. As a fellow business owner, I completely understand how daunting this is; however, it’s important to regularly check on what you’re spending money on in the business and how necessary those expenses may be. For instance, in my own business, we noticed we had a couple subscriptions that really did not give us much more value than their free versions, nor do we use them all that often. We decided to cancel these and use this money elsewhere like more advertising and growing our savings account (more the come on that later).
Reach Out to Leads
Although it may seem counterintuitive to invest in advertising right now, this is actually a prime time to do so, particularly if you are a business-to-consumer (B2C) establishment. Consumers will receive their income checks soon (if they have not already) and may feel ready to spend. For those who are business-to-business (B2B), your potential clientele may also be ready to buy now that the stress of tax season is primarily out of the way. They, too, will be looking for ways to bounce back from taxes, and you may just be the key.
If you do have a smaller advertising budget, you can still reach leads through networking. This is one of the best ways to get attention to your company. With options available both online and offline, you should be able to sign up new business in no time. (As long as you are being consistent, that is.)
Start a Savings & File Quarterly
If you dread taxes every year (and who doesn’t?), look into filing quarterly, if you do not already. This is highly recommended and suggested by many to avoid paying such a large lump sum at once. My business partner and I decided from the day we opened our virtual doors for business that we were going to keep a percentage of our revenue in savings specifically for taxes so that we were not worrying about where to come up with the money. Keep a minimum of 30% of your net profit in a separate account at all times so that you have a better idea of where you stand. This will reduce the stress of taxes and keep your head in the game so that you can do what you do best — run your business.
What tips would you add on how to bounce back from taxes as a business owner?