Taxes & Sales: Upleveling my Business

Taxes & sales are topics that we DON’T like to discuss. But listen to this podcast episode. You’ll learn how I grew my sales AND spent less time stressed during tax season. If you want to grow your business long-term, you’ll appreciate the story. Because it could help YOU build a stronger strategy around your sales. There are a number of practical tips that I share. But also, don’t miss out on the CEO mindset shifts. Ultimately, that’s what leads to the wins and spending less time dealing with busy work.

 

https://open.spotify.com/episode/21mioJP10GWwihsIi4k4of

How I used to run my business and deal with taxes & sales

I started my business years ago. When it was tax season, you didn’t have cloud software or the online bookkeeping software that exists today. In those days, you had one of three options:

  1. Hire a bookkeeper
  2. Pay for a fancy pants desktop software program like Peachtree or Quickbooks
  3. Do it yourself

I choose the DIY method. I didn’t have a brick-and-mortar store with hundreds of transactions daily. So I thought I could handle it internally. Every year, I would purchase a bookkeeping register to record my expenses and income. I would spend hours reviewing everything and asking my accountant tons of questions.

Now quick backstory about why I choose the DIY method – I had mastered some basics when I was young. Years before I started working, my Mom taught me how to balance a checkbook. Those fundamentals helped me during the early days of my business. My first two accountants always told me that I did a great job whenever I turned in my Excel spreadsheets.

Mind you, it would take weeks to organize the spreadsheet. I would keep track of the invoices in one binder. The receipts were always a mess. I would throw them in file folders by month and deal with them at tax time.

But, I was really proud of myself for developing this system. I wasn’t spending a ton on software. I didn’t think I wasn’t ready to hire a bookkeeper. And my accountants (who were CPAs) told me that I was doing well. So I thought I was good.

Taxes & Sales: How One Idea Helped Me Uplevel My Business

It changed when I started doing this

It wasn’t until a couple of years into my business when I really started asking questions. The big questions like

How do companies who sell similar services bring in ALL of their money?

What are they DOING differently?

How do they THINK about money?

How are they earning money DIFFERENTLY?

For alot of us, we are so comfortable with the DIY method. You try to avoid thinking about taxes & sales until you have to. This way, you have 100% control over how your manage the numbers. That was a big for me. I needed to see the numbers. They helped me make decisions within my company. Things like:

  • Do I have enough money in the account?
  • Am I tracking everything?
  • If I don’t have enough, let’s figure how to earn more
  • Or oHHHH this is going to be a big season. Let’s see what expenses I can take care of right now. 

For years that control was huge. I would sell based upon what I could “see”. For example, my B2B clients would hire my company to manage events or programs. I would literally plan my calendar around the dates of those programs. As long as I could “see” the dates blocked, I knew I had income coming in. When I didn’t have any dates on the calendar, I knew I needed to find new clients.

What I missed when I handled all of the details of taxes & sales


As good as my system was, I was missing something BIG. I was only tracking the numbers in my checkbook. I only sold based on what I could “see”.



I was missing the 10,000 foot view of my numbers.

 

In recent years, I’ve gotten better at seeing that 10,000-foot view. I’ve invested in different methods to analyze my finances. I have two systems behind the scenes and I did finally invest in QuickBooks. Plus I have a couple of internal methods so that I no longer have to spend that full month organizing receipts.

What happened? I got clearer on the need to analyze my numbers. Not just look at what I owe in taxes.

It’s really easy to organize your finances at tax season and realize, “Oh my gosh, I made all this money. But what happened to it?”

But if you start having that conversation regularly, you have the opportunity to make different decisions about how your company could grow. Or how you spend your money now.

I needed the ability to forecast into the future and say, “I want to grow my business by 5%”. What does that look like?

  • I want to grow my business by 20%. How do I do that?
  • I want to grow my business by 50%. How do I do that?

How do you reverse the trend?

One option is to start pulling back the covers and asking the questions:

How am I earning money right now? 

How am I stopping myself from growing?

What do I need to do to shift in order to change things? 

Here is an example of what I did after one of those intense inner question sessions.

I used to spend all of December organizing my receipts and invoices. I thought it was perfectly fine because December was typically a slow month. It was my downtime.

But all of those man-hours were wasted. I was not spending time planning and strategizing what I was going to do for the upcoming year. I was doing all operational work. Which is important. You need to take care of that. But you also have to think about how you’re spending your time. You’ll never make the bigger moves you need to if you only think operationally about taxes & sales.

Are you spending your time on the CEO tasks ?

Or are you spending a lot of time on the operational tasks?

If it is the operations, you’ll only maintain where you currently you’re at . You need to step back and see the bigger picture. 

My first step – Spend $ to make $

I started paying with a business credit card that made it easier to keep track of my receipts. Sure, the card cost more. But I remember the joy that I felt the first time that I downloaded the Excel file. I almost passed out because it categorized all of my expenses in five minutes. You might ask: why would you pay more for a credit card? Focus on the interest rate and paying no annual fees. Nope. That credit card was my in-house mini bookkeeper. It freed me up to be able to think about those bigger questions.



Here is how you can start

How often do you strategize from the 10,000-foot view so that you get out of the day-to-day work and 2x, 3x, and 5x your business? Spend a weekend every quarter or block out a week outside of tax time to review your numbers and consider your options.

Step #2 – Stop talking to your accountant only during tax season

I understand that a lot of accountants are trained to talk to us only about taxes. But if you’re just going to your accountant once a year, how do you navigate the cash flow and growth?

Talk to your accountant during the summertime.  What are some smart moves you need to make in order to save money on taxes? What are some of expenses that you should be thinking about in the summer? What are some of the things you need to be preparing for now? Things that could change your business’ growth 2-3-4 years from now.

Step #3 – Get clear on your money story with your taxes & sales

Before you do this work, get clear about the story that you tell yourself about money. When you start unpacking these questions, people can give you a lot of tips. But if you haven’t started doing the inner work of thinking about how you think about money, you’ll run into problems.

For example, I got clear that I had story about being 100% in control of my money. While it has its value, it also didn’t allow me to step back and think bigger picture.

You are the CEO. You can’t think about strategy and growth at the very same time that you have to be the chief bottle washer. So when you have opportunities, free up your time so that you can think bigger picture. Hire a coach so you can learn how to 1 X, 2 X, 5 X your money in a way that feels comfortable to you. But you’ve got to find ways to free up yourself from some of those day-to-day grunt work tasks first.

I hope that this conversation provides some value for you.