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Your whole business plan can flow from that one number. You can use your break even point as a powerful business tool to make decisions about marketing, strategy, plans for expansion, hiring a new employee, etc.
6. How to make friends and influence check cutters.
Once upon a time, I worked for a corporation-yes, me,
quintessential entrepreneur. One of my jobs was working in Accounts Payable. All day long I got calls from vendors. Not friendly social calls, mind you. Angry calls. Irritable calls. Annoying calls. Vicious calls.
And then there were
friendly vendors. The ones who took a moment to treat me like a human being. Guess who I knocked myself out for? Guess whose checks made it through
labyrinth of bureaucracy and out
door? Uh huh. The vendors who treated me with respect. Is that fair? Not at all. But, it is human nature.
Take
time to get to know
folks that cut
checks. Don't be afraid to build bridges and establish relationships. You meet lots of interesting people and your cash flow will improve. One of my friendly vendors hired me away from
Cubicle City. I spent
next three years improving his cash flow from
other side. You just never know.
7. Why paying taxes is a cause for rejoicing.
The strategic approach of many small business owners is to have as little profit as possible at
end of
year. Otherwise, you'll have to pay taxes. So year after year, small business owners make decisions in their businesses based on intentional lack of profitability.
Now, for
majority of small business owners, what
IRS considers to be profit is in actuality your paycheck. Are you working to lower your paycheck? Would you put up with that from an employer? By putting up with it from your own business, you condemn yourself to a life of poverty just to avoid having to pay taxes.
I won't tell you that writing checks to
IRS is my favorite thing to do and I make sure I take every legal deduction I can, but if I'm paying taxes, it means I'm making money. I like making money. The bottom line is this: If you're paying taxes, it means your business is making money. Go out and make more! Don't let
thought of taxes hold you back. Think about it this way, even if you're paying fifty cents of every dollar to
government, that's fifty cents more in your own pocket. That's a good thing!
A word of caution: don't boost your earnings and spend it all. Make sure you plan ahead for
tax bill!

Caroline Jordan, MBA is a small business consultant and author of Mastering Cash Flow: A How-To Guide for Solving Small Business Cash Flow Problems. For more information visit www.TheJordanResult.com/mastering.html .To get in touch, call Caroline at(207) 583-2630 or send an email to TheJordanResult@adelphia.net.