business

How Much Does It Cost Your Business to Earn Each Dollar? by Paco de Leon

Do you know how much it costs your business to earn each dollar it makes? Unlike traditional employees, when you're a self-employed service provider, every dollar you earn has a cost beyond your time and energy. How much do you need to pay for employee payroll, taxes, operating costs like marketing and insurance, profit, and personal pay?

Even if you’re a one-person freelance practice, understanding how much it costs you to earn each dollar in your company is a valuable shift in perspective that can help you build a sustainable, efficient business.

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Here's What Tax Season Looks Like with Hell Yeah, Bookkeeping by Paco de Leon

What makes tax season so stressful for most small business owners and freelancers? I think it can be chalked up to a few things. First, if you haven’t kept up with your bookkeeping, then you’re facing a year’s worth of accounting homework with a fast-approaching due date. If you don’t know how much you’ve made, you can’t know how much you’ll owe in taxes - you’re flying blind and that’s scary.

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Everything You Need to Know About Small Business Taxes by Paco de Leon

Disclaimer: The following is not tax advice. It's a guide to help business owners and the self-employed understand their tax obligations.

Small businesses and their owners have a plethora of ways they can and may be required to pay taxes. From Federal to local taxes, once you start to wrap your head around the American tax system, you'll realize it's kind of a hodgepodge of laws and rules put together over time. Think of it as an ugly collage of regulations, but it's much worse because percentage math is involved. Another frustrating aspect is that the laws may change. We saw this most recently in 2019 with the Tax Cuts and Jobs Act. Although a good accountant will help you navigate through the ever-changing tax code, as a business owner or freelancer, it's your responsibility to get a foundational understanding of the world of business taxes.

This guide is to help business owners and the self-employed understand their tax obligations. Once you can wrap your head around how small business taxes work, you'll be able to use this knowledge to make better decisions and to ask your tax advisor (your accountant) better questions.

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Here Are The Seven Most Common DIY Bookkeeping Mistakes by Paco de Leon

If you're a small business owner that does your business bookkeeping, I have a lot of respect for you. You're probably one of those curious people who enjoy learning how things work. Or maybe you find it valuable to understand the process.

Anyone who has ventured outside of their lane of expertise has probably felt a tinge of fear that unbeknownst to them, they're doing something wrong. And if their error were to reveal itself, would it be a quick-and-easy fix, or will course correction come at a colossal cost?

Accounting errors can end up being costly if you don't catch them right away. And if you gloss over them, you run the risk of filing incorrect tax returns, which, if uncovered in an audit can cost you a lot in time and money.

Here are the seven most common bookkeeping mistakes I see clients make.

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Twelve Small Truths About Running a Business by Paco de Leon

It’s been over 4 years since I’ve gone off my own and I’ve learned more about the world and myself in this short amount of time than I think I’ve learned in my whole life - at least it feels that way. Now that my business is no longer a sketchy house of cards that could fall down at any moment, it’s a lot of fun making things exist in the world to help people.

Here are twelve small truths that I’ve learned while forging my own path. 

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How To Make Money: Get Over Your Hate of Selling by Paco de Leon

When you’re at a bar at 1am; you’re not drunk, but not not sober, surrounded by a bunch of friends, the last thing you want to do is load several heavy, oddly shaped items into a car only to have to unload them shortly after. This is the worst part about playing in a local band; you have to do everything yourself… but it’s just part of it. It comes with the territory. 

To my freelancer friends and small business buddies who hate selling or pitching or talking about the money part of things. I get it, it sucks, but too bad. It’s the trade off for being able to spend your working life building something you believe in. It’s the cost of mostly being in charge of your life. Talking about money doesn’t have to suck. You can stop hating it, but you have to do some work to change your own perspective on it.

Here are some ways I think about selling. I hope some of it will light up your brain and help you power past some of your limiting beliefs around selling and talking to customers about money.

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How to Make Money: Use Skills to Solve Problems for Specific People by Paco de Leon

Picture this. You’re back in 5th grade. You’re standing in a line with your fellow classmates, facing an open field. And you’re all about to be humiliated because you’ll now be ranked by your kickball skills. 

There are two team captains and they’re staring you all down and sizing you up. The first picks start and of course, the kids with the most kickball skills are picked first. Then the kids with the moderate skills are picked. They don’t even need hard kickball skills, they can have skills like morale building, being a team player or not getting in the way of the star players. And then the last picks are the kids who might not only lack skills; they might be a liability. On the dusty field, it’s not about feelings or friendships, it’s all about skills. After all, it’s not called friendship ball.

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Small Business Year-End Tax Strategies by Paco de Leon

It’s a common misconception that the tax code is rigged so the rich benefit and the poor are penalized. While the uber wealthy can definitely afford shrewd accountants and savvy tax attorneys to help, there’s another perspective to consider. The tax code favors employers versus employees. As a small business owner, you’re an employer. Employers have considerable more strategies available that can help you save money.

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How to Stay on Top of Your Business Finances: The Weekly Checklist by Paco de Leon

My favorite dad-joke about being a freelancer or small business owner is how we end up getting jobs that we never applied for.

No matter what you do, when you first start out, you do it all. You’re the head of marketing, the VP of sales and the director of finance.

If you’re in business, and you’re a little lost on what you need to be doing to stay on top of your finances, here are the things you should be looking at every week to make sure your business will be sustainable in the long run.

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Focus On Earning Money by Paco de Leon

Saving money is important. So is not spending more than you earn. And so is understanding the implications of big financial decisions like taking on student loans or a mortgage. All of these are crucial for long-term financial sustainability. 

But one huge piece of the equation that not a lot of people focus on is the earning money part. As you can imagine, I spend a lot of time thinking about this concept.

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