Planning For Retirement Prepare A Schedule Of Monthly Business Expenses.
Going back to fundamentals, you need to generate positive cash flow, which is not the same as generating revenue. Positive cash flow occurs when your revenue exceeds your expenses. Your net cash flow must cover your personal expenses. If these numbers don’t work, you’re going to put stress on yourself and nothing positive comes from stress. That’s why I strongly suggest having the 1-year expense cushion.
These numbers are only estimates, your actual expenses will be different. I highly recommend overestimating these. Inevitably you will get hit with unexpected expenses, both business and personal.
MONTHLY BUSINESS EXPENSES
So, you crunched the numbers and are determined to move forward. Many times, I have found that entrepreneurs move forward despite what the numbers look like. I’ve done it and learned very expensive lessons. Some of those lessons turned out to be invaluable lessons, on what not to do, while some worked out proving my intuition was right all along. If you are one of those that choose to move forward, despite what the numbers look like, I highly suggest you read my book “From Myths To Money” available on Amazon. Have faith and tenacity, you’re going to need it!
These are your options when it comes to your legal structure as a business. If you don’t formally choose one of these, you are a Sole Proprietor by default. If you create a Not-For-Profit and don’t set it correctly, you can face some serious legal repercussions. Before you do anything, seek the advice of a good accountant and/or tax attorney. I say accountant and/or tax attorney. Because most attorneys are not versed in tax strategies. Choosing the wrong structure can cost you a significant amount of money.
- Sole Proprietor
- “S” Corp
- Not for Profit
Most starting business checklist and small businesses should be structured as an “S Corp” for legal and tax planning purposes. I’ve seen many new business owners and business ideas, choose to be structured as an LLC without knowing the tax implications. I have included an article on being taxes as an LLC and self employed vs being taxed as an “S Corp”. For more information download my FREE copy of Business Structures