Month: January 2022

Do you struggle with picking good price points in your business? You know what I mean – coming up with a price for your services or products that you know will *actually* be profitable?? 😬 If that sounds like you, then it’s time to get to know the fixed and variable expenses in your business – and then use a super simple breakeven formula 🤓 🤔 𝗦𝗼 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 “𝗳𝗶𝘅𝗲𝗱 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀”? These are your “overhead costs”, and they don’t change much from month to month. You pay roughly the same amount, no matter how much (or little!) business you do. Some examples of fixed expenses are: 🏢 Rent or lease of office space 👩🏻‍💻 Website hosting fees 👔 Employee salaries 🤔 𝗔𝗻𝗱 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 “𝘃𝗮𝗿𝗶𝗮𝗯𝗹𝗲 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀”? These are expenses that are directly tied to your volume of production and/or sales. Therefore, the total amount of these expenses changes depending on your volume.

Are you thinking about applying for a loan for your business? 💰 If you are, there are a few things you’ll have to do before calling up your bank, such as: 📄 Gathering up your financial + legal documents 💳 Checking (and maybe improving) your credit score 🗺️ And even writing up a detailed business plan. Know what else you got to do? Get your business bookkeeping up to date and in order 😬 Here’s why: 📊 LOAN AMOUNT: Without up-to-date finances, you can’t know exactly how much you need (or what monthly payments you can afford!) 📊 REPAYMENT AMOUNT: Not only that, but you’ll also have to prove to the bank that you can actually AFFORD that monthly repayment amount

“So do I need to worry about collecting & filing sales tax for my business? 🤔 And if so – what percentage or amount do I need to charge?” Hoo boy – this is actually a surprisingly complicated question 😬 Here’s why: 𝗘𝗮𝗰𝗵 𝘀𝘁𝗮𝘁𝗲 𝗶𝘀 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁 There is no universal federal sales tax rate – sales tax is determined by each individual state, therefore the rules and rates and filing frequencies differ from state to state. And it’s not just state taxes – there are also local taxes (like county and city) to factor in as well. 🗺️ 𝗔𝗹𝗹 𝗽𝗵𝘆𝘀𝗶𝗰𝗮𝗹 𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗮𝗿𝗲 𝗮 𝗳𝗮𝗰𝘁𝗼𝗿. What if your business is located in Ohio, but you have a warehouse located in Pennsylvania? Or a salesman located in Illinois? Did you travel to Kentucky to sell your goods at a weekend convention? That all has an effect, too. (And don’t get me started on the confusions and complications of drop-shipping and Amazon Fulfilment)

Everyone knows about the big bad tax date, April 15th, right? … But what about all the other “little” tax deadlines in between, like the estimated tax payments due every quarter? In case you aren’t sure about this whole quarterly tax thing, here’s a quick rundown (and a good article below with more info!) 𝗪𝗵𝗮𝘁 𝗲𝘅𝗮𝗰𝘁𝗹𝘆 𝗮𝗿𝗲 “𝗘𝘀𝘁𝗶𝗺𝗮𝘁𝗲𝗱 𝗤𝘂𝗮𝗿𝘁𝗲𝗿𝗹𝘆 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀”? Every quarter, you need to make a tax payment based on your estimated income for the year. This includes taxes like income tax, Social Security tax, Medicare tax, and more (if applicable) If you were a W2 employee working for a company, these taxes would automatically be taken out of each paycheck. However, since you and I are self-employed business owners and freelancers, we have a different process for paying these taxes. 𝗗𝗼 𝘁𝗵𝗲𝘆 𝗮𝗽𝗽𝗹𝘆 𝘁𝗼 𝗺𝗲 𝗮𝗻𝗱 𝗺𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀? Probably – although it doesn’t have the exact same effect on every business. However, if you made more than $400 this year through your business, you’ll need to file and pay something. (Keep in mind – there are penalties for late filings!)