Have you ever gotten too connected to an idea? For me, personally, we bought a home to fix up and it has taken a tremendous amount of self-discipline to decide to fix some things and not every thing. If everything is fixed, our basis in the home becomes too high and we lose money on the investment.
This happens often with the self-employed. Especially when it’s your first business, you want to give it your all. All the assets, the best advertising, the highest paid employees. You are free to make all your decisions since you are self-employed. But that freedom is a double edged sword. Businesses go under sometimes from advertising, from investments they shouldn’t have made that added up. Just like you have to keep your basis down in an investment, you need to do that in a business too. It’s tough to not buy the brand new business truck you “need”. It’s tough to decide if that extra advertising is worth it or not.
I can’t oversell an accounting system enough. You can’t make those tough decisions without numbers. If you are using Excel, it may work for you for a while but it will be much more labor intensive to cross analyze profit than a software would be.
In my example, I looked at houses near me with the same features that were selling recently. I found out what they sold for per square foot, looked at the basis we already had been tracking and developed a reasonable budget for making sure we don’t overspend.
It’s hard to say no. But saying no to some things is saying yes to something else. You need a budget to do this, you need a system to do this and an accountant will set those things up for you.
Planning can be fun. Even if your plans change as you go, you will accomplish more than if you didn’t have them. And someone to help strategize with you on how to build your wealth and make profitable long-term decisions is invaluable.
Give me a try. Initial consultation is free.
Call Fleig Financials at 361 443-3787 for your free initial consultation.
Written by Laura Fleig
September 10, 2020
www.fleigfinancialsllc.com
