I've worked in financial service since I was in college. In fact, my very first job was as a collections agent for a big, evil bank. For four hours a day, five days a week, I'd sit in a call center in suburban Southern California with a fugly headset on, connected to an automatic dialer. I would speak to people who were past due (bank speak for late on making a payment) on their auto loans. The majority of the time the person on the other end of the line just spaced and forgot to make their payment.
The bank had entire department dedicated to closing the gap between revenue that was owed to them (AKA receivables) and cash. The gap is entirely created because of how, when or if a customer will pay their bill or invoice. As a small business owner, you probably experience the drawbacks of this gap like not being able to pay your vendors or yourself or your other bills. But there are things you can do to help minimize the gap. This is called managing your cash inflow.
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If you work for yourself or dream of working for yourself, I'm sure one of the motivating factors is to make a profit. Making a profit can depend on a lot of different factors. Some of those factors are outside of your control like the market and the competition. You can move the needle on other factors like leadership, management, location and the number of locations. But one of the most important factors that have a direct impact on your profit is pricing. Pricing is how much you charge for your service.
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Whether you're in business for yourself or working for the man, the woman or the big faceless corporation, the principles of how to earn money are the same. Understanding these principles and applying them consistently are key. Progress comes from consistency.
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If you owe taxes to the IRS, but you donโt have the money to pay them, it can be an overwhelming feeling. That sucks. But the good news is, you can totally come up with a plan to pay it off. The IRS is good like that. As scary as their certified mail notices can be, they definitely want you to be able to settle up with them.
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I scream, you scream, we all scream for payroll!
If you're an employee who has ever gotten a paycheck, getting paid is a pretty awesome feeling. As an employer, payroll is pretty damn costly. It tends to be the biggest expense for most businesses and not just because of the actual cost of salaries. There are taxes too. Payroll can have complexity and any missteps may cost you. According to an IRS report, roughly 40% of small businesses incur an average of $845 per year in IRS penalties for errors with payroll tax filings and payments.
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Ladies, gentlemen, non-binary friends and humans of all identities, yes you can tidy up your finances. Sรญ se puede, guys. Trust me. And once it's there, it's all about maintenance. Getting there could require some effort and energy, but it's worth it. Gone will be the days of you expending mental bandwidth thinking about an old 401(k) account you know you should rollover but you haven't.
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One of the first concepts I learned while studying economics is a phrase made popular by the economist Milton Friedman: "There is no free lunch". An Econ professor once wrote it on the white board in all caps and it's stuck with me ever since.
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You've probably heard your accountant or that one friend who totally has their shit together talk about how you should be saving for retirement in an IRA. And like a good adult, you probably make all the right noises at the right times to suggest you understand what the hell they're talking about. In case you've been living a lie because you don't really know what the hell an IRA is, I'm here to free you from the shackles of your own confusion.
So let's go balls deep into the non-sensical world of IRAs.
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There are three different ways to get bookkeeping set up for your small business: do it yourself, hire someone or a combination of the two.
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If you're running a small business, you gotta have a solid accountant. Someone you can trust and who you can call on for advice and counsel. So what are the top things you need to look out for?
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