Well if you reinvest profit, your business is growing on its own merit. There are tax advantages to reinvesting profit in your business. You reinvest by getting parts, new equipment, and that dinner where you entertained a client, that’s business expenses. I personally want to leave the LEAST amount of money on the table to be taxed. They get enough from my regular 9-5. When you take money out of your business, that’s taxable income.
I’m speaking as a newbie slightly ahead of you.
You should be able to fund your overhead WITHOUT business coming in. Makes you less dependent on crappy customers and reinvest all profit into the business.
Your CPA must be willing to explain what they are doing. Most CPA’s will just take your paperwork and spit you back a number. No joke I hired a “good CPA”, he was impatient as hell despite me paying by the hour. I left him for the retired banker/accredited agent at H&R Block and he sat and explained EVERYTHING for significantly cheaper. We just got lucky that we knew his history. Also, he got us $1000 more off our tax bill. A good tax guy is an asset!
I’m in my second year. The least profitable customers are a fuckin headache it’s so true!!! Taking on clients out of desperation is bad for your mental health. Raise your prices to be out of their reach.
I need better marketing and social media. Everyone knows Starbucks coffee is terrible but they are profitable due to marketing.
Oh hell!!! I meant to say this. In TX there’s this thing called a franchise tax. It really applies to those bringing in big money, like in the millions BUT you still have to submit that paperwork and filing fee every year. If you don’t, the state can dissolve your LLC. I let that get past me because hell I’m just starting and I’m not aware. Well it got past me and I got the warning letter. I was able to fix it but it was a wake up call. Some of the documentation is just a way to squeeze a few admin fees out of small businesses.
Make sure you don’t have any of those obscure filing requirements out there in your state. That can really mess things up for you!