Being an entrepreneur can feel like a dream when you’re finding success, but keeping it running can feel like a pinch back to reality. From taxes and finances to payroll and staffing, the never-ending paperwork filing can leave you feeling anxious and alone. But with the right hand to guide you, there are many tips and tricks along the steps of scaling your company to simplify your finances.
In today’s episode, we are joined by an exceptional CPA, Fractional CFO, and host of The CEO Wingwoman, Christy Bowie. After leaving a steady career at a big 4 accounting firm, Christy felt a deep passion for helping business owners take the stress out of finances and create strategic plans to scale their businesses by starting her own practice.
Listen in as we speak about:
- The biggest tax tips for your small or scaling business
- The lowest hanging fruit that can actually help you save money with taxes
- Avoiding the temptation of your business bank account for your own personal spending
- How to utilize an exceptional budget with the process Christy has created
And much, much more!
The biggest tax tips for your small or scaling business
Not sure where to start when forming an LLC? Do you think an LLC is a tax status?
Christy emphasizes the importance of planning for taxes year-round and suggests considering forming an LLC for legal protection. An LLC is not a tax status and shares that one can still be eligible for tax deductions without forming an LLC. Christy also explains that from an LLC, one can choose to be a sole proprietor, partnership, or an S corporation. S corporations can save money on self-employment tax but have additional responsibilities and costs. When considering an S corporation, run the numbers to determine the additional compliance costs.
The lowest hanging fruit that can actually help you save money with taxes
The big lie that too many businesses are told is that they have to spend more money to save on their taxes. If you’re already spending money on business related activities, locations, or supplies, why not fully utilize those benefits instead?
Christy suggests taking advantage of mileage deductions for business-related travel and meals, as well as the home office deduction. Don’t spend more money to save on taxes, but instead turn expenses that are already being paid for into tax deductions. However, Christy and Emma emphasize that the purpose of the trip must be for business and not personal.
Avoiding the temptation of your business bank account for your own personal spending
Your business is not your piggy bank.
We get it, it’s incredibly tempting! Your credit card bill was higher this month than you planned, you’ve worked so hard and you deserve that new car, and you had a great month in business, so why not pull money out of that business account?
Emma and Christy discuss how business owners often pull money out of their business before it’s ready, negatively impacting cash flow even if the business is profitable. Christy doubles down on tracking cash flow and being intentional about the flow of money, including setting up payroll and separating personal and business expenses. They recommend making forecasts for the next year and having stable, predictable income for both the business and the owner.
Steps to prepare for a public speaking event or content creation by engaging emotionally with your audience
Some aspects of your budget come easy, some come to be more difficult, but the constant needs to be having a structure and a direction for your company.
Teaching and creating these structures is why Christy’s practice is so in demand.
When Christy is with your company, she starts by looking at what is currently working and what has happened in the past year to determine implications for profitability and cash flow. She considers seasonalities and looks at year-to-date and rolling 13-month reports.
What she won’t do? She will never tell you to fire your entire marketing department to save money. Having a talented staff can be used to raise your bottom line, and launch your company to its next round of funding.
And at the end of the day when you’re in growth mode, some metrics may not line up, so Christy also considers future plans for expansion when creating a budget.
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