Here's what I've learned about pricing over the years of running my own business and being the kind of person who thinks an awful lot about money.
What makes tax season so stressful for most small business owners and freelancers? I think it can be chalked up to a few things. First, if you haven’t kept up with your bookkeeping, then you’re facing a year’s worth of accounting homework with a fast-approaching due date. If you don’t know how much you’ve made, you can’t know how much you’ll owe in taxes - you’re flying blind and that’s scary. And it gets compounded by a common fear among my creative friends and clients - the fear that someone from the IRS is going to knock on your door, tell you you’ve been doing everything wrong, and that you’re in major trouble.
Read MoreA reasonable salary for an S Corporation's shareholder-employee is the part of their compensation that must be treated as employee wages. The IRS requires you to be paid an appropriate wage for the services you provide your corporation because when you get paid via payroll, both the employer and employee pay payroll taxes. These payroll taxes provide needed funding for Social Security and Medicare. It’s best to work with an experienced tax professional to set your optimal reasonable salary, but this article will be a great primer to get acquainted with what a reasonable salary is.
Read MoreA cash flow projection, or cash flow forecast, is a way to illustrate how much cash you expect to receive and spend in your business. It's like a budget, but it does more than project expenses. It estimates how money flows in and out of your business. While cash flow forecasting has long been a business tool, it’s also something you can do in your personal finances (the more you know).
Read MoreWhat is lumpy cash flow? Lumpy cash flow is a way to describe how income and expenses can fluctuate each month. All companies will have some fluctuations, but in general, project-based or seasonal businesses tend to have the lumpiest cash flow.
There are a variety of different things you can do to smooth out lumpy cash flow. In this article, I'll walk you through some of them.
Let's go.
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