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E-Myth – “Why most small businesses don’t work & what to do about it”

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CFO services | Are Financial Plans Important To Businesses

While many business owners have heard how vital business plans are says CFO services. They may think that their business plan already has a financial plan or tax strategy within it.

Or, even though many business owners understand how important business plans are. They still do not have one. And therefore, are incredibly less likely to have financial plans and tax strategies in their business.

However, not only are these plans extremely beneficial to entrepreneurs. Business owners that do not have these plans. Can be impacting their business in a negative way.

If business owners think that they might have a tax strategy in their business. Because they already have a business plan. They can apply this test. In order to see if they are likely to have a plan or not.

If they look at how they take money out of their corporation. Whether it is hundred percent salary or hundred percent dividends or mixture of the two. CFO services says if it is hundred percent one or the other.

This is typically going to be an ineffective tax strategy. Because the best tax strategies typically requires a mixture of the two. And what that combination is.

Depends on the circumstances of the business. As well as the personal circumstances of the entrepreneurs. And will be determined by the entrepreneurs accountant.

If business owners do not have financial plans or tax strategies. They can contact their accountant and ensure that this is included in the CFO services that they are getting.

However, some business owners may not think that there business as large enough. To benefit from getting a financial plan and tax strategy created.

And in fact, this is likely not true. Especially since businesses do not need to be making a lot of money in order to benefit from these plans.

When the fact of the matter is entrepreneurs that are making fifty thousand dollars a year in gross income. Are going to benefit from having a financial plan or tax plan.

And it is even going to be more cost-effective. For entrepreneurs to pay for a financial plan in their business. Then it would be to pay the taxes on fifty thousand dollars a year.

Therefore, there is no reason why entrepreneurs should not create these important documents in their business. Not only because it is going to help them succeed. But it will also help them pay fewer taxes.

However, many business owners are concerned about the upfront cost. Which is where finding an accounting firm such as a Spurrell and Associates come in beneficial.

Not only do they not charge any additional amounts for financial plans and tax strategies. But they also include these plans in their regular services as well.

They do this, because they know how beneficial these plans are to the success of the business owner. And they want to see their clients succeed. So they have been able to implement this as a part of their regular strategy with their customers.

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Financial plans are crucial to help entrepreneurs succeed says CFO services. Because they help business owners pay less taxes to the government.

And whether they use the money that they save to help pay bills, make payroll or purchase assets. Or even if they use that money in order to put towards more marketing.

That means an entrepreneur will have more money in their business, to help them run their business. And make them more likely to be able to avoid running out of money in their business as well.

The reason why this is so important. Is because it happens to be the second most common reason why entrepreneurs fail in their business.

In fact, the failure rate for entrepreneurs in Canada is extremely high. With 15% of all entrepreneurs feeling in the first year of opening the doors to their business.

And 30% of Canadian small business owners fail within their second year of business ownership. And ultimately, half of all Canadian businesses will fail. And that will happen within five years.

And while the second most common reason for failure is that business owners will run out of money. The single most common reason why businesses fail. Is because they cannot find enough customers.

Therefore, if business owners are able to use the money that they save by paying fewer taxes. And put that towards marketing their business.

Not only will they be more likely to be able to avoid running out of money in their business. They will also be more likely to avoid the single most common reason. Why entrepreneurs fail in business in Canada.

Which is not being able to find enough customers. Because they are using their saved money on increasing their marketing in their business. To be able to find more customers.

When they are sitting down with their CFO services in order to get a financial plan and tax strategy created. They should be prepared to talk about their personal finances as well.

Because it will be impossible to have a complete tax strategy. Without considering the personal circumstances of the entrepreneur.

For example, it is not beneficial if an accountant can minimize the corporate taxes. But the entrepreneur is still paying the highest personal taxes. Especially since the personal tax rate is much higher than the corporate tax rate.

Therefore, business owners need to take into consideration. That they will be discussing their personal finances. Because their accountant will be minimizing both their corporate and their personal taxes.

So that they can pay minimal amounts of taxes over all. And not only that, but there tax strategy may change from year to year. As their business circumstances change. But also as their personal circumstances change as well.

Therefore, they can look forward to sitting down with CFO services every single year to discuss their business and personal circumstances.

So that they can end up with an effective tax strategy every single year that will help them succeed. By paying less taxes, and using that saved money in a variety of different ways.