Business Best Practices
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You’ve done the math, conferred with Uncle Sam and it turns out you get a tax refund this year! I’m sure you’ve heard enough car dealer and furniture sales commercials to know there are a ton of people who want your refund. So what should you do with it? Here are 5 ideas of where you can spend your tax refund to help move your business forward.
Debt is a risk, both for you personally and for your business. When you have debt your income is already promised to someone else, you can’t do what you want with it. And if your income drops then you’re in a real pickle. Consider using your tax return to reduce your risk by paying down some of your debt. Need some help knowing where to start? Check out Dave Ramsey’s 7 baby steps to get started.
There is no better investment than to invest in your mind. Now is the time to take inventory of your business knowledge gaps and figure out what you need to learn this year to move your business forward. Do you need to learn about sales or Facebook, or is it time to get a coach or join a group coaching program? Decide now what you’re going to invest in and save your money for the next launch of that course or program. Deciding now what you need and who you want to get it from will help you from getting swept up in the excitement and FOMO of a launch.
Another option for your tax refund is to take stock of the areas of your business that you dread dealing with and figure out how you can use this cash to delegate. Maybe it’s time to get a part-time virtual assistant to help with your back end admin tasks. Or perhaps its time to invest in a copywriter to spruce up your sales page or give you a jump start into blogging. You could decide to finally take the dreaded task of bookkeeping off your plate by investing in a bookkeeper. Use this cash to make business easier.
(NOTE: Not sure what your bookkeeping tasks should include? Download the Ultimate Checklist to Keep Your Bookkeeping Simple now)
As an online business, it’s likely that you don’t have a lot of equipment. At a bare minimum, you have a phone and a laptop. Consider putting your tax refund towards upgrading or replacing your equipment if needed. Other options to consider could be a high-quality microphone for podcasts, or lighting equipment and cameras to make videos. Where can you invest in equipment to help grow your business?
Of course, you shouldn’t buy stuff that you don’t need just to spend the money. Consider setting the money aside as an emergency fund or a replacement fund. If you know you’ll need a new laptop in the next year or two set your tax refund aside. Then when the time comes you don’t have to stress out about finding the cash to cover the expense. You’ve already got it taken care of! Nothing takes down a business faster than running out of cash, set some money aside so a slight downturn in business doesn’t wipe you out.
Last but definitely not least, getting a tax refund means one thing…you gave the government an interest-free loan. While it’s nice to get an extra cash boost every April, it’s better to keep your money and decide how you want to spend it as you go. Consider adjusting how much you’re paying in each quarter. You want to pay in enough so that you aren’t hit with a big bill, but not so much that you’re getting a huge refund. Chat with a tax professional to help you calculate this.
Enjoy your tax return, make it a wise investment and don’t loan the government money next year!
You know bookkeeping is vital to the success of your business. Stop procrastinating and start getting it done with this simple checklist. You’ll get:
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