The Blog Of TL Wall Accounting

How To Gauge Products And Services You Should Be Paying For

Self employment is a wonderful thing if you can pull it off. What’s less than optimal is trying to run your business while still trying to do everything else you normally do that takes you away from running your business. All of us have tried it at one time or another, and eventually you either burn out or find yourself tiring to the extent that you’re slacking off on both your business and your projects.

There’s a process one should go through when making a determination as to whether or not you should keep doing what you do that’s not part of your career. Below are categories and things to think about that might help relieve you of some of your workload… even if it might cost you a bit of money.

Skill level

One of the reasons our accounting firm exists is that many of our small business clients discover that doing their business taxes, as opposed to doing their personal taxes, is a totally different thing. It gets harder to keep up with if you get lucky and make a lot of money. What you sometimes see is that you pay less taxes than you should and when that large IRS bill shows up you’re in shock.

Unless you’re running a business in finance, you might not know enough about tax law to take care of it on your own, especially if your business is incorporated. This isn’t a slight on anyone’s knowledge or talents; it’s something we’ve seen time and time again, and it’s less expensive and more timely having an accountant or accounting firm handling it for you so you don’t have to worry about it.

Time vs Earning Time

If you have a nice sized plot of land, it could take you upwards of a couple of hours a week to keep it mowed. If you’re doing it for exercise, that’s a pretty good workout. If you’re busy with your business, it might be better hiring someone else to cut it for you. They’ll probably have better equipment to do it faster, and most of them will trim your lawn and bushes so that everything looks great.

In our area of the country, most years we get a lot of snowfall. Even having your own portable plow isn’t a chore you want to do when you have an early morning meeting but you have to plow your driveway before you leave the house. Hiring a service might not be that inexpensive, but it saves you stress in the long run, and if you’re in the middle of a heavy snowfall it’ll save you a lot of time during the day instead of having to go out every few hours to clean it off again. These are only examples; are there other services you could pay someone to do that allows you to concentrate on your business?

Making money vs losing it

The premise behind these types of thoughts is determining whether you’re making or losing money in the long run. For instance, if you’re paying someone $25 a week to mow your lawn and it takes them an hour but you’re making $100 an hour, wouldn’t you consider that being cost efficient, especially since you can write off the expense?

Another way of looking at something like this is whether you’re making enough money to justify spending it elsewhere. For instance, you could hire a virtual assistant to send out marketing letters for you because it’s something that takes a long time to do (printing, folding, putting in envelopes, stamps, etc). However, if you’ve been doing it on your own for a few months and haven’t gotten a single call or email, let alone a client, it might not be the smartest move to spend your money on at the present time. If you can afford the loss for a while, that’s one thing; if not, it’s better spending your money more wisely.

Gauge how much to spend when you have to spend

If you’re in business for yourself or running a business, you’re going to have to spend money. Deciding how you’re going to spend it and on what might determine how long you’ll be in business.

For instance, a lot of people believe they need to have an offsite office, which could run anywhere between $400 and $2,000 a month depending on your location and the location of the office. Both of those figures might be too much to spend unless you need to have a space away from home to meet potential clients. Even in that event, it’s easier to set up a breakfast or lunch meeting where you not only pick up the tab, but you can set a time limit so that it assures that you’ll get down to business quicker.

Your choices should always depend on what your needs are now and what they might be in the near future. Do you spend $400 on a desktop computer because you need a computer, or do you spend $750 on a good computer because you need more reliability? You might not always be able to afford the best, but “pretty good” doesn’t have to drain your checking account.

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