Connie’s Guide to Never Being Late on Your Taxes Again
Fair warning, this post has more than a little bit of “tough love” from me to you, but it’s because I truly care about you and the sustainability of your business!
I think it’s fair to say that we all agree 2020 is not a “typical” year.
It’s certainly not the year any of us had originally planned and, it seems, not a year we can get back on track. Nope. 2020 is a whole new experience, requiring innovation, patience, and growth. On a certain level I am, of course, referring to ourselves and our businesses, but let’s also call a spade a spade: 2020 is really calling on us to apply its lessons to every damn institutional, educational, and societal norm that passed as “acceptable” not just way back when but as little as 6 months ago.
This is why the July 15th tax deadline here in the US may have felt like a suckerpunch to your business that you may not be able to get back up from.
Mentor Moment:
If you no longer want taxes (or lack of cashflow in general) to take the wind out of your bank account’s proverbial sails and you are willing to do something about it, keep reading and we’ll explore both what’s keeping you on the hamster wheel and how to take the flying leap off it.
If you’re good with the cycle you’re on, just do yourself a favor and get back to the grind of your hustle. This article is not what you are looking for. (YES the Force is strong within me today!)
It’s been a month since the tax deadline and that money wound may have scabbed over a bit and perhaps the emotional pain has subsided. If that’s the case for you, please rip it back open and sit with all the feels while you read the rest of this article.
Here’s why:
Ignoring the fact, year after year, that your business will owe tax, is the literal definition of insanity (and one of my favorite Einstein quotes):
Granted, when we first started out, we tended to be more concerned with being found and getting sales, so yes, that first year missing that simple truth is a normal experience for many start-ups. (Notwithstanding the oft-repeated phrase that the only guarantees in life are death and taxes. 🙄)
If you’ve been on the tax payment hamster wheel ever since year one though, the original pain of that first “unexpected” tax bill probably wasn’t enough to kick your butt into shifting your behavior. In fact, the next year you may even have chosen to accept it as your new reality. And then the shame and guilt slid their way in, kicking up fear, and causing you to freeze on making any shifts.
My friend, the continual hustle required to stay in that cycle is exhausting. But it doesn’t have to be “the way things are”!
That said, finding a way out can seem difficult, maybe even impossible. Which is why, in my experience, businesses that find themselves in this pattern will hear the impending death rattle that will slowly and painfully cause it to fail and close its doors for good.
So I’ll be fully transparent: making the change will be difficult, but it is notimpossible.
If you’ve been holding on to the hope that when you finally reach that magical 6- or 7-figure revenue goal the hamster wheel will finally stop spinning, it won’t. In fact, it will actually make it worse.
Why?
The change you are looking for doesn’t reside in your top-line revenue.
It lives in how you handle money - when you receive it, how you spend it, and why it doesn’t seem to stick around long enough to cover those taxes.
Here is the stark, naked truth:
A sustainable business will owe tax. Period.
While there are ways to save money on taxes, to take full advantage of them requires that you keep your numbers updated and work with a tax pro to PLAN ahead. Embrace the power of your numbers! They have no choice but to be honest with you.
At any stage in your business, the key to getting off the hustle roller coaster is to change how you manage your cash. Whether you’re debt heavy, still owing past tax liabilities, or even still in start-up mode, all businesses can make these changes. Some will just do it more slowly than others… and that’s okay, so long as they’re doing it.
A cash handling system will look different for every business, so be willing to craft one that makes sense for your money personality, your industry, how long the business has been open, and your Big Kahuna dreams.
Now that you are aware that avoiding the conversation around taxes will not create a sustainable business, you have a CHOICE! Are you willing to try something new, break out of your comfort zone of the continued hustle and create some financial space and cushion with your flow? Or not?
If you’re still reading, chances are you’re willing to make the change so, now that you are aware that tax is a normal part of business ownership, and you are unhappy with the level of stress ignoring it is causing, you are ready to take action.
Shine a Light on Your Fears
Fear is defined as: An unpleasant emotion caused by the belief that someone or something is dangerous, likely to cause pain, or a threat. Similar words: anxiety, worry, panic, unease, apprehension, nervousness, dread.
I’ve also heard it said that fear is often caused by a lack of information.
Fear of not doing things right or not having all the answers stops us from taking action. When it comes to taxes, especially if you’ve been shamed by a prior tax pro or told that numbers were just not your thing, fear stops you from taking action to resolve the situation you are currently in.
So how do you get around it?
You shine a light on it so all that dark unknown scary bits run off into the corners!
For your business, that means looking at numbers in real time to make well-informed, in-the-moment decisions. It means using those numbers for planning. It means paying attention to the flow of money and putting some intentional use behind it.
It means getting off auto-pilot and paying attention to the details.
During start-up and when we are stuck in hustle, auto-pilot is our friend. Money comes in and goes out just as fast, or faster which is why we create debt.
To change that cycle, you need to be brave. It will require that you get some support and, most importantly, be willing to do it differently.
Let’s face it, how you have been handling money and finances hasn’t been working or that tax liability wouldn’t exist!
Change Your Lens
When you were a kid did you ever get a running head start so you could jump into your bed, fearing that a monster might reach out and grab you if you got too close? Then when you were really brave, you took your flashlight and leaned over to look under your bed to find nothing but open space. Did the fear totally go away? No, but the flashlight made you feel braver and stronger. (That wasn’t your story at all? Well now I feel a little silly, but that is exactly what I did as a kid!😅 )
Can you shine a light on why you have fear around looking at your numbers? Can you find where it originated?
Perhaps you were raised being told that money is evil...
Or that you don’t have a head for numbers, or that...
Math wasn’t your thing.
In your family of origin, men made all decisions related to money.
You’re uncomfortable with technology.
“It’s not about the money, it’s about being of service.”
These are examples of subconscious beliefs that are clouding your lens looking at and having a relationship with money. If a tax liability and fear both exist in your business, we know that these beliefs are not working for you. So again, you have the power of CHOICE here!
I’ll be frank; changing these beliefs will be uncomfortable. There will be times you will want to sneak back to your comfort couch and hide out under the blanket of those old beliefs.
Of course, if you wanted the easy way out you wouldn’t have started your own business to begin with. Right?😉 When you are ready to change your tax liability experience, you are ready to shine that flashlight on all the fears that are keeping you stuck. That starts with your mindset and beliefs that YES you can shift this and YES you can create a new reality with numbers and money!
Become “Empowered With” Money, not “Overpowered By” It
Creating that new reality requires that you are willing to craft a new relationship with money. To step into using and leaning into your numbers so they can empower you to use money more intentionally to support your life and business.
You need to be able to see your finances and start paying attention to the flow.
First step - how can you see your finances in real time? That could mean using an accounting tool or spreadsheet. Finding options to automate some of the busy work. Or it may even mean hiring someone to do it for you. Many options to get to the same place, which one works best for you?
HINT - just because your tax pro or bookkeeper suggested a tool, that they LIKE, does not mean that is the right tool for you! It’s your money, your accounting tool, so you get to use the one that suits YOU best. Your bookkeeper and tax accountant are professionals. Sure, they have their preferences, but they can figure out whatever tool you’re using. And if they can’t or they refuse, find a new service provider.
Now that you can clearly see your numbers, you can use them. My recommendation is to craft a habit each week that gives you space to reflect back on what has happened and look forward to making sure you are on track to reach your goals. You’ll hear me call this the Money Monday habit. It doesn’t have to be on a Monday, it just has to be a consistent time each week to pause, review, and look ahead.
(If you love alliteration as much as I do, you could call it Tracking Tuesday, Wealthy Wednesday, Thankful Thursday - money loves to be thanked!, Finance Friday, Spreadsheet Saturday… the sky’s the limit!)
The other key pieces: create a financial plan and implement a cash handling system. These are the processes and tools that will create the cash reserves to help you get off that tax liability hamster wheel.
Time for Action
If you are here, congratulations on taking forward movement on finding a way off that insanity cycle. Here’s what to do next.
My recommendation is to get support. That support can be from your tax pro, a business colleague, a coach, or even a conversation with me. Having a third-party who isn’t emotionally tied to your business has the ability to look at the problem in a different fashion, with a clearer lens.
The term “support” can feel a bit nebulous when you’ve never had it or sought it out before, so here are some suggestions to help you out:
Start with support on how to look at and access the financial information about your business. That could mean finding a new tool to help with automation or hiring a bookkeeper to help with the recordkeeping (bookkeeping) part of the process. Or simply a little hand-holding for some personalized training.
Lean into creating a financial plan for your business so you can shine a light on how you are using money and know whether or not your revenue goal is realistic or if it is simply that your pricing model is incorrect. Want more information on the steps on how to do this, here is a postthat I did so you can educate yourself a bit more.
Then seriously consider a cash handling system that is designed for your specific business, your money personality, and pays attention to your natural tendencies. Create a new relationship with how you interact and use money. Here’s a post I did to learn more about the cash handling system that I teach.
If you’d like to have a complimentary conversation about how to get started in any of these areas of support that I’ve mentioned here, click on the button below to be taken to my calendar. I’m here for you!