End of year financial review.
Disclaimer: The information provided is for informational purposes only. It should not be considered legal or financial advice.
- You should hire someone as a financial planner. This is my experience and what I think is useful to know. Your mileage will vary and could be entirely different.
- This is complicated stuff but really useful with that said.
- How much do you pay yourself? 30% is your labor budget as a general rule. Broken out: 30% of $100,000 is $30,000.
- Hope you developed that thick skin and a sense of optimism because the outcomes aren't always what you think they are going to be.
- Get quickbooks. There’s a fairly good breakout you can use in your PNL to line up with your taxes.There are some adjustments you’ll have to make and I break it out.
- Be aware of what’s going on without an accountant but have someone who knows bookkeeping. Most accountants dont care. Basically understand your cogs.
- COGS - Cost Of Goods Sold
- Let’s break everything for Cost of Goods out - I’m breaking everything out. Everything. Just not here.
- Revenue doesn’t equal money you “make”. So prepare for what you make to also be less because of taxes.
- Banks care about all of this. They have formulas for measuring the health of your company.
- What’s the biggest thing you can knock down? How in line was your green coffee buying from what you projected the costs to be? How far can you stretch out that dollar you spent on what you bought?
- What do you do when you get to the year and you make so little that you qualify for food stamps? Lol? Cry into a pillow?
- Be aware of your books. Your finances. Be smart and adjust in near real time.