5 Ways To Make Your Business Work Harder for You and Your Family

Many business owners are working so hard at their business that they fail to enjoy the rewards of being the business owner. If you are letting the life of your business overrule the business of living your life, then it is time to begin turning the tides.

Finding ways to make your business work harder for you and your family is the reason we all started our businesses in the first place. If your business is obstructing your efforts to enjoy life with friends and family, this is a problem. We all know a lot of work goes into building a successful business, but if it is consuming all your time, effort and energy… is it worth it?

Why this coordination is important:

Every time you find new ways to help your family benefit from the efforts of your business, your life balance and family life improves.

If your business consumes your entire life and your family life suffers because of it, your spouse and children may actually resent the time that you spend there. Even if it provides a great deal of income, the value of family and social life may be sacrificed.

Make your business help you, your family and your social life. You will be happier, healthier and live a longer more rewarding life.

5 Ways To Consider:

Consider paying children’s education expenses as wages for work

Many small business owners make a good living and have higher than average incomes. This can cause their family to qualify for little to no college financial aid when their children are ready to attend college.

If you are going to have to pay for it anyway, why not pay your children to help out at your small business. Pay them as an employee, contractor or consultant to do work for you and your business.

If you pay them enough to cover their college costs, you will receive a tax deduction for the cost of their college education by deducting their income from your business. They will be responsible for helping out with your business and they may surprise you with how much value they add to the business. New ideas, new technology, a new and different viewpoint might be just what your business needs.

Schedule family vacations around business travel

When a family vacation is something you’re considering, think about coordinating it around a work trip. Do you need to go to conventions, trade shows, seminars or other training for work? If you drive to go to those business activities, your gas mileage is tax-deductible regardless of how many individuals you have in the car with you. Does this conference or training trip require you to stay in a hotel? Your hotel expenses for that night can also be deductible regardless of whether you have your family with you in the room.

Scheduling family vacations around business travel can help make it more manageable. This allows you to enjoy time with your family or friends while also working on your business. Consult with your spouse or family to coordinate the two.

Manage taxable income and year-end purchases to lower tax bracket

Operating and owning a business requires seeing the big picture and planning for the future. Your business will likely need new or updated equipment, computers, other technologies etc. to operate smoothly and efficiently. Be able to forecast these needs.

Here is where you coordinate your tax situation with these needs. If you know you are in need of new equipment, computers, etc. in the near future, look at your taxes. If you are looking at a higher tax bracket for the year you may want to make these necessary equipment purchases sooner than expected. Or you may want to wait until next year. This requires consulting with your business advisor to determine the best option.

Use Retirement Plans

Consider reducing your current income by using a Retirement Plan. Not only will this help you once again for tax purposes, but it’s also helping you and your families future. So many small business owners neglect to put retirement needs on their priority list. Often we hear “my business is my retirement plan.” Putting all of your eggs into one basket can be extremely risky and even dangerous for your future.

You may want to consider adjusting your salary in order to account for contributing to a retirement plan. There are many ways to rearrange things to make it possible to contribute. The tax savings alone can help justify the redirecting of your income into a retirement plan. Be sure to look at all of the different options and scenarios as this will provide further clarity.

Also if you choose to offer your employees a retirement plan, this will help attract quality employees, retain them and allow for an additional tax savings for any company match. You may even be able to take a few days off without worrying about the business functioning without you! Think of how that would allow you more family time. Consult with your financial advisor to clarify your options and the benefits to you, your business and your family.

Consider adding or using a home office arrangement

There are many benefits of utilizing a home office arrangement for you, your business and especially your family. If you’re currently renting or paying for office space it may be feasible to create or use an office space at home. With technology today, working out of the house has become much more functional.

If you’re solely stationed out of your home, this provides for another tax benefit. You are able to write off the portion of your mortgage that accounts for the square footage of your home office. Also any improvement expenses, internet expenses, utility expenses or taxes that are directly related to your home office may also be deductions. Finding ways to cut taxes is crucial for a small business owner.

If your line of work makes it unable to be based completely out of your house, even just working a day or two from home will allow you to spend more time around your family and add some flexibility to your work schedule.

Your Challenge:

Here are 5 ways to help your business work hard for you and your family. Share your ideas with your spouse, children and business advisers. In every case that we have executed these strategies properly, the rewards were three-fold. Family life improved, your work-life balance improved, and the business also benefited.

You’ve worked too hard to get your business to where it’s at… It’s time your business returned the favor!

If you are a small business owner in the Buffalo,WNY area

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Grandad, What’s a Business?

Grandad, what’s a business? This is a simple question but like many simple questions the answer is a bit more complicated than you might expect. Complicated but easy to understand if you let Grandad explain.

Quite simply, a business is a group of people who are joined together to sell something to bring in money, referred to as “income”.

A business can be very small, even just one person. This small business can have a legal form or the person can just consider himself (or herself) to be “self-employed”. Even a one-man business must bring in enough money to pay for his living costs. Otherwise he will need to get a job in another business or live on social security paid out by the government and that is no fun at all.

The size of business that we meet most often is as small as 2 or 3 up to as many as several hundred. These companies are often referred to as small and medium-sized enterprises (SMEs). They normally have a legal status such as “partnership” or “limited company”.

The big beasts in the business jungle can be very large indeed, often with thousands of employees and many millions of pounds income and are usually “Public Limited Companies” (PLCs). All these businesses are important and Grandad will tell you more about all these businesses in the next few days.

Let me tell you now about the money earned by a business, called “income”. This money must be enough to cover what are called costs or “expenditure”. Costs are all the expenses that the business incurs: the materials the business might have bought, rents, wages and money paid to other people. Costs can include a whole lot of other things such as computer cost, telephone bills, insurance, heating, transport etc.

The idea of a business is that income should be more than expenditure, If income is greater than expenditure, the difference is called a “profit”. If income is less than expenditure then the business is said to make a “loss”.

Making a loss is a BAD THING. If losses continue then the business cannot carry on and is said to be bankrupt. The business has no money to pay its bills.

Profit therefore must be a GOOD THING. Not everyone agrees but Grandad will explain as we go on why profit is a VERY GOOD THING.

There is an in-between result which is called “break-even”, which is not a loss and not a profit. Normally a business can survive in a break-even state but it brings problems that we can talk about later.

Grandad has not yet mentioned the greatest contribution that businesses make to all our lives – TAXATION. Businesses are a rich source of TAX, which our government needs to pay for schools, the National Health Service, roads, police, firemen, the Army, Navy and Air Force, old age pensions etc. Our politicians have great ideas on how to spend money but they have no money to spend unless businesses create TAX.

There is a tax called CORPORATION TAX which is charged as a percentage of the profit the business makes. However businesses create tax for the government in many other ways. Everyone who gets wages or a salary from a business pays INCOME TAX and the business pay NATIONAL INSURANCE for each person working for the business. No business, no wages, no income tax, no national insurance. Businesses charge VAT (Value added tax) on most things they sell They pay what they collect (less what VAT they have paid to other businesses) to the government. Owners of a business can take money out of the business in the form of what are called “dividends”: INCOME TAX is paid as a percentage of these dividends. Finally owners can sell a business to somebody else and if they do, they pay CAPITAL GAINS TAX on the sale. If a business buys insurance, it pays INSURANCE TAX. If it buys goods from abroad, it often has to pay TARIFFS to the government.

Corporation Tax, Income Tax, National Insurance, Value Added Tax, Tax on Dividends, Tariffs, Capital Gains Tax all help in paying for things we value such as schools, police, defence and the National Health Service. Without these taxes the government would not have enough money to pay for these things. By the way, businesses also pay COUNCIL TAX which pays for local services such as street cleaning, parks, playgrounds and many other things we take for granted.

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