How familiar are you with your current financial strategies? In this Expert Insight interview hosted by John Golden, Derrick Van Ness discusses financial and tax strategies to help small businesses. Derick Van Ness is a tax and financial strategist passionate for work with small business owners to help them maximize their profits.
This interview discusses:
- Cash Flow and Liquidity
- Common Mistakes
People usually choose their tax specialist online or by a recommendation. The tax code is very comprehensive, and nobody has the full knowledge of it, therefore, it is recommended to have your taxes reviewed by a new set of eyes every three years. Per $100,000 in taxable income, small businesses overpay on average around $11,000 yearly. This is a significant amount of money for a small business. A thing that separates okay from a great tax specialist is how proactive he or she is. The proactive tax specialist will meet with you at least once or twice before December 31st to see how things are going with your business and where you will probably be at the end of the year. Based on how much effort they put in their work, tax specialists can be separated into two groups, tax recorders and tax advisers. Tax adviser is someone who will really look at the numbers with you and help you to make a decision, while a tax recorder will basically just record your transactions.
Cash Flow and Liquidity
Another financial strategy for small businesses is the Money Maximization model, which helps to grow money somewhere easily accessible. With this model, the returns you get are similar to the stock market, but also if the emergency or opportunity comes up, this model offers liquidity. Thus, this method offers less risk and easy access to cash. Cash flow and liquidity are very important for small businesses. People have to be aware of their cash flow and to be honest with how long it takes from executing the sale to invoicing to collecting the payment. It is good to have one or two months of expenses in savings just in case optimistic projections about when the payment will arrive do not happen. A systematic savings plan where each month a set amount of money goes into a savings account will help you to get richer every month and to make more confident decisions for your business.
The most common mistake business owners make is not keeping the track of their cash flows. They make a lot of money, but they do not know where it goes. You should have at least a general awareness of your cash flow by going through it at least once a week. Another mistake is that people invest in things they do not really know. If you decide to invest, it should be something that you know about it, something you care about and something you control.
John is the Amazon bestselling author of Winning the Battle for Sales: Lessons on Closing Every Deal from the World’s Greatest Military Victories and Social Upheaval: How to Win at Social Selling. A globally acknowledged Sales & Marketing thought leader, speaker, and strategist. He is CSMO at Pipeliner CRM. In his spare time, John is an avid Martial Artist.