Oh yes… so I recently had a conversation with someone who had made a wee bit of a faux-pas… Ok, not quite a wee bit, perhaps more of a big bit. Their business was doing exceptionally well, clients coming in thick and fast, list growing exponentially, all seemed great, and it was, fantastically so.
Except for this one thing, the one thing they’d sort of overlooked…tax.
It may seem like a really basic thing in business, but you would be amazed the amount of people that don’t actually consider their operating costs properly. Including tax.
Tax has a nasty habit of biting you on the bum and bursting your bubble if you’re not prepared for it, yet the answer is really, really simple. For every single payment that comes into your business, put 20% of it into a different account. When you come to calculate your tax at the end of the year, there should then be more than enough in that account to cover it.
That’s it. Once you’ve squirrelled that money into a separate account, don’t touch it – whatever is left there after your accounts have been filed and tax paid can be put towards other stuff, or it could just be left there to grow as your safety net.