If you’re a Profit First business, you get to take profit distributions four times a year. It’s exciting to see the fruits of your efforts and be able to boost your income as the business owner.
It’s honestly the best thing about Profit First, that you’re not limited by your owner’s pay (though it is important to pay yourself a living wage!). You get quarterly “bonuses” that you can spend as you wish.
You might ask, why not pay yourself more each week or month and enjoy the extra income in the moment…so you don’t have to wait until the end of the quarter? Because your profit distribution is not part of your salary. Even though it might look that way on your taxes.
You know tax time will come every year, but for some it comes four times a year. That’s right…quarterly taxes are due four times a year for those who expect to owe $1,000 or more at tax time.
The trick is determining your tax liability, which can be tricky when done right.
If you’ve experienced debt in your personal life or your business, you know that it can feel suffocating. Your financial walls are closing in on you, and you’re ready to get rid of it once and for all.
We’ve talked before about good uses of debt vs. bad uses of debt, and there’s an important distinction. But aside from that, we think it’s important to let go of consumer debt and other debt sooner rather than later.
But how exactly? We can and will help you with this. But before we get into our recommendations for conquering debt, we need to lay some ground rules.
As the days grow warmer and people start taking vacations, wellness businesses often take a hit. Therapy slows down and people opt for outdoor workouts instead of the gym.
Hopefully you’re prepared for the financial slowdown that comes with seeing fewer clients. That means having a subscription-based revenue model and having an advanced account that holds your summer expenses for you.
But with the summer slow-down, your time opens up for so many opportunities behind the scenes while still allowing you to keep a steady paycheck. Let’s explore each one of these!
At some point or another, most of us have had a relationship with debt. That first credit card we got in college or the mortgage to buy our current home. Sometimes the debt is used for good; other times the debt wasn’t in our best interest. (Maybe some of those early credit card purchases weren’t the best idea.)
I don’t want to sound polarizing, but there’s a good time and a bad time to use debt. That’s true in your personal finances and in your business.
So how do you know when using debt is a good thing and when you should plan to use cash?
Our favorite time of year happens four times: at the end of each quarter. If you’re following Profit First, this is when you, as the business owner, get to take half of what’s built up in your profit account as a distribution (a bonus, if you will) to yourself.
That’s right, every 90 days you get to share in the profits of your business.
The big benefit of using the Profit First system is that you pay yourself first. You never have to forego paying yourself because that, and your profit, comes first.
At the same time, there are sometimes other parts of the business that demand your attention. Things like new equipment, large one-time or yearly fees, future investments that you may not even know you need yet.
No two businesses are alike, and each will have its own complexity. So while having the basic five accounts (Income, Profit, Owner’s Compensation, Taxes, and Operating Expenses) is important, sometimes we have other needs too. Thankfully, it’s easy to customize the system to meet the needs of your unique business, by opening additional, “advanced” or “drip” accounts.
We’re in business to have a business, which means making sure it’s profitable year over year. And even better is when your business grows over time–either slow and steady or more quickly.
Like anything in life, you get back what you put into business. If you nurture it with the right actions and tools, it will flourish. If you ignore parts of it, you’ll struggle.
If you’re like many business owners, you’ve just closed up your books from last year, sent 1099s, gathered all your tax information, and now you’re staring down the calendar wondering when you’re going to have time to do your taxes.
Sound familiar? No one said taxes was fun but I, for one, am anxious to get mine done as soon as possible. Why’s that? Because I use the Profit First system and I have all the cash I need (and more!) saved to pay my taxes.
The 2021 calendar year is officially over, which means that tax season is upon us. (Happy New Year, right?) It’s time to start getting organized so you don’t have to ask for an extension on your taxes.
If you’ve been following along recently, you’ll know that there’s a lot you can do to prepare. We’ve told you how to reduce your taxes without reducing your net profits, we’ve shared how to work ahead so you can minimize your tax season stress, and we’ve given you tips to prepare for taxes well in advance.