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Gain a Holistic View of Your Small Business 2013 Taxable Income

2013 taxable income

Image provided by username 401K under the Creative Commons License

December 31st is just around the corner. It’s time to gain a holistic view of your small business 2013 taxable income so that you can prepare yourself for filing your corporate tax returns.  As a small business, it can be difficult to know where to start. In fact,  you may be tempted to put it off until the only options are to hire a tax preparer or make a dangerous slap-dash attempt at the forms. Incorrectly filing your taxes could lead to  significant problems down the line, including audits, penalties and allegations of fraud—even if the fraud is unintentional.

The only way to avoid the possibility of these problems is to gain a complete picture of the 2013 taxable income for your small business by the end of the year. This will provide you with some time, before tax season actually rolls around, to ensure you have the necessary capital and all the correct paperwork to pay your taxes correctly and efficiently. Allocating a little time today to prepare will make filing on March 15th less stressful for you and those around you.

Your Small Business 2013 Taxable Income

Here are four easy steps that you can take to prepare your small business 2013 taxable income picture:

Step One: Gather your bank statements. Your bank statements should provide a clear and concise picture of every income and expenditure your business has accumulated over the past year. Review your statements for accuracy.  Understanding where your cash comes from, where it goes, and at what intervals can help provide the most complete picture of your total income and expenses for the year. Many business expenses, especially for small businesses, can be translated into tax deductions. It’s a great idea to make a list of these potential tax deductions while you have your bank statements handy.

Step Two: Establish a balance sheet. Your businesses balance sheet is the statement of  financial position. It provides a single snapshot of your assets, liabilities, and ownership equity. Whether you use a program such as Quickbooks or a simple spreadsheet, a balance sheet will help you not only see the entire financial picture, but also help you keep track of them in the future. Organization leads to better business practices and fewer costs in the long run.

Step Three: Create a profit and loss statement. This document, based on the information gleaned from your bank statements and balance sheet, will provide you with one solid number. This is your net income, and is the money that you will be taxed on. The most important part of filing taxes is to provide adequate documentation for all of your money, both as it comes in and leaves your business. These three steps can help you get organized and prepare your business for the 2013 tax season.

Step Four: Get ready for next year. Having just compiled all of the information necessary for this year’s taxes, learn from this experience to become better organized next year. If your money is spread across more than one bank account, consolidate it. If you had trouble remembering what money was spent where, create an organizational system that allows you to document your expenses as they happen. Taking small steps now is the key to making this process less time consuming in the future.

The key to long-lasting success is always knowing where your business stands financially. As your business grows, it’s critical to have the right team in place. I can help you find the right accountant, bookkeeper, or other financial personnel by working with you to identify the necessary skills, knowledge, an attributes of a successful financial role. How can I help you prepare for success this year and beyond? Contact me today and we’ll get started.

Uncovering the Mystery of a Good Marketing Plan

Marketing is more than selling and advertising. A good marketing plan is strategic and  gets your product or service in front of your potential customers. When you first launch your business, your marketing plan may consist of just making sure that you can make payroll. However, eventually it should take its rightful place as a strategic planning action.

Product Life Cycle

Marketing Plan Product Lifecycle

Every product or service has a life cycle, and it’s important to know where you are in the stages so that you can plan accordingly. The stages include:

  • Introduction—The introduction stage is defined by the launch of your product.  In this stage, you incur significant marketing expenses because you’re trying to get the word out. Generally, sales are low, expenses are high, and profits are nowhere to be seen.
  • Growth—During the growth stage, your product begins to take off, your promotion costs decrease, cost of goods decrease, and your profits begin to rise.
  • Maturity—The maturity stage signifies the lowest cost of goods, lower production costs, high sales, and is usually the most profitable stage. In this stage, competitors began to enter the market.
  • Declining stage—The declining stage represents a decrease in sales and leftover inventory. You should be thinking about reinventing or revising your product during this stage.

Knowing which stage of the life cycle your products is in helps you make educated decisions on where to spend your marketing dollars. If you have to reinvent your product, or revise your product, you’ll generally start the new life cycle with an introduction that overlaps the old cycle. Rarely will you have to start at the beginning again.

Marketing Plan Elements

Marketing Plan

The mystery of marketing isn’t really a mystery. Building the strategic marketing plan to let people know how your product or service solves their problems takes time. When you include the necessary elements, you’ll discover that your plan converts prospects into paying customers. Ensure that your marketing plan includes the following five elements:

  • Passion—Your marketing message has to have energy and spark. There needs to be a hero willing to fight the villain of success. If you can’t get excited about your message, then don’t do it. You need passion that often involves sacrifice to make something big happen.
  • Activity—Marketing dreams that come true and increase sales are never random. It often requires a tremendous amount of promotion, advertising, and energy to create a successful outcome. Being timid and passive won’t work in capitalism. You must make a bold proclamation so that others can take notice.
  • Scarcity—Creating the perception that your product is scarce will add tremendous marketing energy to your plan. Do this intentionally, but with integrity. When you can create perception that your product is rare, people will want to have it. It’s natural.
  • Urgency—You should try to convey a sense of urgency because without it, desire loses its value. Establish a pricing structure that limits the number of items at a certain price.
  • Momentum—Scarcity, urgency, activity, and passion are four elements in a successful marketing plan. However, if your outcomes are limited to your best efforts, then your outcomes are too limited. Businesses are often in such a hurry to get to market that marketing strategy is often ignored. It cost a lot of money to make this type of mistake. Be thoughtful about your approach to your customers so that you will be given the opportunity to serve them with your product or service.

How’s your strategy coming along?

*Images courtesy GNU Free Documentation License.