36 THINGS I LEARNT ABOUT BUSINESS IN 36 MONTHS – NUMBER EIGHT: PAY YOUR TAX
From the very first day you open in business you are accumulating tax for the government. Managing your tax and having a plan in place to not get in debt is a must. You should have a separate bank account and move money into it regularly. In Australia it should be between 10-30% of your gross income. Your accountant will let you know how much to put away.
So what to do if you end up with a tax debt? Eat the frog! It is not going away. My suggestion would be to phone the tax office and get a plan in place. Don’t over commit. You are much better off committing to a lower amount, and to keep on top of the next tax bill in full, than to have high expectations and end up defaulting on the arrangement.
Educate yourself. There are many many books on tax, and how to best minimise it. Putting your head in the sand and leaving your businesses finances in the hands of your accountant is not wise. It is YOUR business. You should try to understand the tax side of it. A great book to read is Bare Foot Investor. I believe that every Australian in business needs to read this book prior to opening their doors. Preparing for a big tax bill, and having more than enough saved is a good problem to have!
Utilise your accountant. Regular meetings and checking in with them to discuss your tax plan is so important. What is good for your business now, may not necessarily be the best thing in 2 years time. It’s important to have an accountant that understands your business and where you intend to go. This may mean changing accountants. Secret Salon Society has partnered with an awesome and very knowledgeable accountant, Dianne Kennedy from Small Business Know How. If you would like more information on her accounting services, check out Diannes WEBSITE
If there is one thing that is a guaranteed, it’s that for the rest of your life, you will pay tax. It is not going away. Not in our life time anyway!
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DARE – DREAM – DO
September 19-21, 2018