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

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CFO Services | Why Get A Financial Plan Done

Since entrepreneurs are facing such difficult odds with their business says CFO services. Everything that they can do that can help them achieve success is very important.

And this is why they should find an accountant to work on their financial and tax plans for them. Because this is going to be what helps and entrepreneurs succeed in business. And with the failure rate of 50%. Business owners need all the help that they can get.

In fact, according to industry Canada. 50% of all businesses fail in five years of opening the doors to their small business. And 29% of these failed businesses say that running out of money is the reason why they failed.

Therefore, an effective tax and financial planning strategy. Can help minimize the amount of taxes that they end up paying. So that they can use the money that they would have spent in taxes on their business instead.

However, one of the biggest problems says CFO services. Is that entrepreneur tend to think that financial and tax planning. Is something that only large corporations need to worry about.

And as the small business owner, or solo-preneur. They do not need to worry about it yet until they make more money in their business. However this is not true at all.

In fact, business owners only need to be making fifty thousand dollars a year in their business in order to benefit from a financial and tax plan.

And if they are making at least fifty thousand dollars in the year or more. They are paying more in taxes. Then they would be paying for an accountant to create a financial and tax strategy for them.

However, CFO services says business owners should also keep in mind. That the best accountants are not going to charge extra for this service. Because of how necessary it is to the success of the business.

The best accountants are going to include financial and tax planning as a part of their services. So that business owners can be more likely to succeed. In fact, many accountants that do not charge for their financial or tax plans.

And many will not simply do just the year-end financials for business. They must do the entire thing as a whole. Because of how important it is to the success of the business.

If an entrepreneur wants to find out if the accountant that they are thinking of using will take all the right things into consideration. When creating their financial and tax plan.

They just need to ask if they are going to have a sit down chat about their business and personal circumstances every year.

Not only is this something that needs to be done every single year. Especially as people’s personal circumstances change. And as the circumstances of the business will change year to year.

But also because a business owner must have their personal circumstances taken into consideration by their accountant. In order for the business and financial plan to be rooted in reality.

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Business owners might think that they can operate their business just fine without a financial or tax plan says CFO services. And while this is a popular assumption it is not necessarily true.

Many business owners have put a lot of time and expense towards creating a business plan. That does not necessarily have a financial or tax plan attached. And business owners think that this is going to help them succeed in business.

And while it is extremely true that a business plan is going to help an entrepreneur succeed. The best business plans will include a financial and tax plan. All of these plans working together. Will be what will help an entrepreneur succeed.

In fact, a financial and tax plan. Is going to be what helps an entrepreneur pay less in taxes. And since 29% of failed entrepreneurs in Canada. Say that running out of money is the reason why they failed.

When business owners can create or have CFO services create financial and tax plan for them. They can use that money that they save on taxes. To fund their business.

In fact, business owners need to take into consideration that without a financial or a tax plan. They could be paying far more in taxes then they might even pay with the financial plan.

A crude tests that business owners can use. To understand if their accountant has created an effective tax plan for them.

Is they should take into consideration how they are taking money out of their corporation. If their accountant has them taking all of the money that they get paid by salary. Or if they are taking all of the money that they get paid by dividends.

That is most likely an inefficient tax strategy. As the best tax strategy. Typically has an entrepreneur taking a mix of both. But what that makes is. Will be based on the entrepreneurs personal circumstances.

And the circumstances of their business. which will be bested determined by their professional accountant. Who understands their personal circumstances. And the circumstances of the business.

So if an entrepreneur is taking 100% salary or hundred percent dividends. They may want to shop around for a new accountant or CFO services. When that will actually do some financial and tax planning on their behalf.

In this is an exercise that a business owner should get into the habit of doing with their accountant every single year. The reason why, is because as circumstances change. So must the financial and tax plan.

Circumstances that can change year-to-year include the business owners personal circumstances. Such as their spouse getting laid off. Or having one of their dependents leave.

Or it can be the circumstances of the business says CFO services. Such as the business making considerably more or considerably less than they are used to.

And finally, tax rules change from year to year. Especially if the government itself has changed. Therefore, sitting down with their accountant to do this tax planning strategy. Is important to ensure that they are continuing to have the best strategy to minimize their tax payments.