I did not begin to explore strategic planning until I became self-employed. Then I had to become a business owner. Now that I am the proud owner of my own small business, I realize how much planning is necessary. And yes, I did start my small business planning online. This allowed me to take a closer look at what I was doing before I got involved with the big game. It is very important to do some planning, if you are going to get ahead in life.
As an entrepreneur, you will be required to file your income tax return with the IRS on April 15th each year. You will also be responsible for filing a Schedule C to report your income on an annual basis. But did you know that there are some tax deductions you can take when you file your tax return? Learn about these now so you can take full advantage of them when it comes time to submit your tax return. Here are a few to consider:
Home-based business expenses. If you have your own business at home, you can claim a deduction for the expenses incurred in operating your business from your home. If your home is your primary place of residence, you can also deduct the expenses incurred for travel related to your business. Both of these are very valuable deductions.
Expenses incurred on behalf of members or affiliates (if any). You can deduct expenses incurred by your business associates in meeting their professional obligations if you can show that these obligations were not incurred in the course of your business. Meeting obligations includes mileage, lodging and other expenses associated with membership or affiliate activities. If you can meet this requirement, this will boost your tax return. There are exceptions to these rules, however. See my Tax Tips article for more information.
Business planning. If you plan to operate your business on a for-profit basis, you will need to obtain tax advice from a certified public accountant or CPA. You will then develop an effective business plan showing how you will conduct your business on a for-profit basis and how you expect to make profits. Your tax return will include a profit and loss statement showing your profits and losses as well as a tax planning objective statement detailing how you intend to achieve your profit goal.
Business Strategy. A good strategy should be based on realistic assumptions about the market, competition and available opportunities. Based on your assumptions, develop a business plan to outline your anticipated future cash inflows and outflows. It will also describe your revenue management process including cash payments to vendors, discounts and trade-ins with customers. It will explain why certain transactions are necessary and why others are not. Once you take my strategic business planning and taxes quiz for me, I’ll show you how to use real figures and real data to analyze the true costs of starting and operating your business.
Tax Advantages. You may be surprised to learn that the benefits of incorporating may outweigh the potential costs. If you incorporate as a sole proprietorship, you can avoid personal taxes by showing receipts for all income and expenses. If you incorporate as a corporation, your company can offset corporate taxes by receiving tax advantages.