One Thing: Day 88: Minimizing Your Number 1 Expense
Day 88: Minimizing Your Number 1 Expense
Yesterday I was talking about beating Roger Federer’s arse at tennis. All I had to do was ‘get my mind right’ apparently.
Lotsa Jedi Mind tricks.
The Umpire called the match off for too much wind… not realizing the wind was caused by me swinging and missing the ball cause I forgot to practice the game and learn the rules of tennis.
But holy smokes was ‘my mind right’ pre-match.
My Mother in Law read the post yesterday and thought I actually beat him… sent me this text:
She uses caps on names.
Fundamentals and skills
What I was really talking about was getting the fundamentals and skills in place. Like you know… actually help someone.
Here’s an example… warning I’m going back to accounting/small business finance.
It’s like that bad girlfriend I can’t get enough of.
Disclaimer: I’m not an accountant, I don’t want to be an accountant and I’m not pretending to be an accountant.
Speak to your accountant before applying any of what I say or detail below and the guy you’re listening to (me) failed grade 8 math and almost got put on the short bus.
Glad that’s out of the way and surely that disclaimer will hold up in court.
I’m in the process of co-writing a book on accounting and small business finance 101 for business coaches.
Say “easily and automatically find your high-end coaching fees prior to starting the coaching relationship” for me.
Taxes are your number one expense. Your coaching client’s number one expense.
By a lot.
Your ONE THING today is to learn about taxes.
Alarmingly, if you’re like 94% of the population you’ve never taken 5 minutes to study taxes and how to ethically and legally minimize your tax position (your number one expense).
You likely have a home office.
Let’s assume I’m a business coach and I’m looking to take you on as a client.
Here’s a little homework I’d do (yesterday I tasked you with helping a restaurant – a similar process I’ll do for you here) on minimizing your tax position and to ensure I had many answers before starting to help you with some very simple tax direction (say MONEY).
And with about 90% certainty your existing accountant isn’t doing anything like this (you probably aren’t giving them the opportunity to because you see them once a year, 3 months after the financial year is already ended) and it’s costing you money.
- Get a floor plan of your house
- Mark the areas that are taken up by your office
- Your office needs a bathroom
- Your office needs a kitchen
- Your office needs an entrance
- Space for garbage
- Storage area
- If you do meetings, you’d need the living room
- Company car space in your garage
- Maintenance on the gardens that surround your office
- Cleaning of your office and areas you need
- You are staff and you need amenities like tea, coffee, biscuits, milk, food, toilet paper (you poop a LOT) etc… Note: This is why you can buy all of this stuff at Staples or stationery stores. Buy it there separately from other household expenses.
- Assume the above is 50% of your house. Then 50% of the interest on your mortgage should be able (*subject to local tax laws so ask your accountant) to be dedicated.
- Expenses like electricity, water, city are now partly business expenses.
- *Depreciation (depreciation is a non-cash expense and therefore PURE GOLD for minimizing your tax position – reduce your profits without spending your hard-earned cash) on office equipment, computers, laptops, furniture used for business purposes, cars and any other assets that are used to increase income.
I probably already covered my annual coaching fees and we didn’t make an extra sale or drive any new revenue. I could well and truly keep going and we didn’t even touch (dramatically reduce) your expenses.
Rather than folks starting an MLM and making an extra (taxable) $10,000 selling lingerie with kitchen parties… study taxes and sit down with an accountant with the above list and end up well ahead of the time spent selling lingerie.
Do this for yourself and then do the same with your new coaching client that has a home office.
Nothing intimidating about it.
A major reason to become an entrepreneur is the tax benefits. Kinda silly not to take advantage of them don’t ya think.
See the ‘short bus’ disclaimer above – speak to an accountant before doing anything I say or write about taxes.
You heard it here first.
Obsessed with your business coaching success,
Karl Bryan aka King Karl
PS. An employee makes money, pays taxes and then spends what left.
An entrepreneur makes money, spends money and then pays taxes on what’s left.
PPS. I’m moving up the charts with my Podcast, Business Coaching Secrets.
I’m told it’s entertaining and informative… send it to someone you think would make a great business coach.
Tom O’Connor won the trip to Cancun for Business Coaching Mastery 6 (BCM6).
Congrats to Tom.
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Karl Bryan gets clients for Business Coaches...period. He is the Founder and Editor-in-Chief of The Six-Figure Coach Magazine and Chairman of Leader Publishing Worldwide, home of the largest private community of Business Coaches (24 countries and counting) in the world.
His goal is straight forward… to help serious coaches/consultants get more clients.