The largest hidden money leak for six figure CEOs can really place a strain on your cash flow and it’s actually hiding in plain sight. Before I identify what it is I would like to express the importance of building a profitable business….
According to the SBA, the true measure of a successful business is one that can continuously increase their bottom line. If you are new to earning six figures or you are a seasoned six figure earner that’s absolutely excellent! But what’s even better is keeping more of your hard earn six figures IN your business.
As a six figure earner you’re now facing advance challenges. One of the challenges is that you often wonder where all of your cash disappeared too and why. Once you discover your hidden money leaks your bottom line will begin to increase.
There are several hidden money leaks six figure earners have, however for today I’m only going to focus on one – the largest money leak:
A High Tax Liability (Bill)
As a six figure CEO, your tax bill can be extremely high, sometimes in the five figures and higher. It becomes a cash flow challenge when you’re trying to pay your tax bill plus your monthly business expenditures and sometimes estimated taxes for the next year. It may seem as if more money is exiting your business instead of entering or money is exiting faster then you’re able to earn it.
I am going to provide you with three options that will help you manage and reduce the tax liability headache.
Option One – Change your business entity. You may have started your business as a LLC –a limited liability company. However due to your earnings level and excessive tax bill it may benefit you if you change to an S-Corporation. Before moving forward with this process please consult with your tax professional.
Option Two – Pay quarterly taxes. If you are earning over $640 per quarter is it recommended by the IRS that you file quarterly estimated taxes. This will help you properly manage cash flow because you can include this amount in your budget and forecast projections and prepare in advance.
Option Three – Save 25% of your total revenue for taxes. If you decide not to file quarterly estimated taxes I recommend saving at least 25% of your total earnings in an interest bearing saving account. By implementing this strategy you will avoid having a cash crunch and possibly avoid IRS penalties and interest because you will have this money set aside for tax payment purposes only.
By implementing one of the options above you are operating as a proactive six figure CEO. Unfortunately there is no way to avoid paying taxes, however you can prepare for them, lessen the burden and reduce financial stress.
If you are a six figure CEO and you currently do not have anyone guiding you financially let’s chat. Click here to schedule your free Profit Health Check today.
Author of the bestselling book, Say YES To PROFITS, Octavia “The Profit Maximizer” Conner is America’s Leader in Profit Maximizing for Small Businesses. She is equipped with over 14 years of finances, accounting and business development experience.
Octavia Conner is a high achieving accountant and financial management consultant who specialize in closing financial gaps, reducing tax liabilities, streamlining business operations and locating hidden money leaks in order to significantly increase small business profit margins. She has a keen eye for helping small businesses improve their financial health and remain in black.
Octavia has been featured in Atlanta Business Chronicle, YES Magazine, Women Creating Wealth Show, 100 Female Entrepreneurs, Smart Hustle Magazine and many more
For more information contact SayYESToProfits.com