Whether you joined your company for the additional income, the fun and products, or the tax benefits, taking the following steps will enable you to get control of your business finances for higher profits and greater peace of mind.
· Control your spending. Write down in advance what you will need for your business in the coming month. First, focus on business essentials such as catalogs and show supplies. Then be conservative for additional expenditures like buying equipment for your office or supplies for organizing.
· Be creative. Necessity is the mother of invention. Find ways to reduce unnecessary expenses by thinking creatively. Invite a prospect to your home for dessert and coffee rather than taking her to lunch at a restaurant. Make long distance calls to customers and hostesses on your cell phone if your plan includes free long distance minutes. Find new ways to save!
· Get Organized. Disorganization not only costs you time; it costs you money as well! Avoid wasting money on too many copies or duplicating forms by organizing your files. In addition, have a place in your wallet and a file in your desk where you place receipts for business expenses. Imagine the thousands of dollars in tax-deductions you may have missed simply because you did not keep a receipt.
· Track every business expense for the month. At the end of each month, total what you have spent on your business. Consultants who are maximizing tax benefits keep two totals: “Essential Expenses” and “Maximized Write-Offs” so they can see the additional benefits they are enjoying from their legitimate home-based business expenses. Write the highest total on the outside of a 9X12 envelope for each month.
· Track your income. List all your income for the month on the outside of the envelope as well. These will include Retained Profits (the 30-36% you keep from each show), Overrides (the amount earned on your team’s sales volume), and Bonuses (kit and volume bonuses).
· Compare income to expenses. Subtract your expenses from your income and evaluate the results. Keep in mind that if you are maximizing your tax benefits by writing off every legitimate expenses you would incur whether you had a business or not, you may show a loss that does not truly reflect the profitability of your business. This saves you tax dollars!
· Make necessary adjustments. How can you reduce expenses next month? Are there expenses, such as mileage that you are not taking advantage of? How can you increase your income next month? These questions will help you get greater control of your business finances and give you a feeling of confidence and success!