Operating a business is more than making money. It's maintaining integrity while your clients aren't home. After all, you're working for their money!
Every action you're about to do has two routes. Ethical and Unethical. Which one do you follow? Every industry has plenty of unethical businesses that do some not so right things either in front or behind the scenes.
For this article, I'm going to revert to my primary business, landscaping. You'll see them out everywhere nearly year round. It's quite the cut throat industry. I created my entire business model based on the polar opposite of what other businesses did. If you fall into the "normal" category of landscapers, chances are, there's so much room for improvement and I'll help you along the way!
What if I told you the "normal" way of landscape businesses are to cut corners whenever possible to save time and/or money? Would you hire that company knowing they do that? Absolutely not! I had an 100% success rate with raising my prices a very small percentage so that I no longer had to cut corners. I marketed that I was improving the quality of my business and to do so, I had to charge just a little more. If they didn't see the improvement, we would go back to the original pricing. Most of you right now are thinking "This guy is crazy!" I am. "Your clients would just say they didn't see the improvement." Wrong. They WANT to see an improvement. All clients at the time said they saw an improvement worth the few extra dollars a month.
Your quality of work is how you're rated in the community. Word of mouth advertising is the number one way your business gets clients because you strive to build your reputation. YOU DO GOOD WORK! Starting out your business you want to make an entry into the industry. You probably don't start out charging what the seasoned businesses charge. In fact, you shouldn't just yet (call me crazy again). If you charge a slightly less than the "big guys" in town, you'll enter the industry much easier. But don't give them less quality than the big guys. Give them MORE! If you keep up or out-do the other guys, your reputation will be seen and you'll be able to charge big guy prices in no time!
Behind the Scenes
At the end of the day, you make $500. How much is the IRS going to know you made? Don't hide your money, use it! Start up a Roth IRA and place a percentage of your pre-tax income into it not only to lower your taxable income, but to save for your retirement!
Absolutely, positively, do NOT hide your income from the IRS. It's a bad idea and you will lose! We don't want to pay higher taxes either. So what's the plan?
Stay ethical! Use a good CPA for taxes at the least. Studies show the average person spends 13 hours filing their personal income tax forms. That's not accounting for their 1040 Schedule C and other business related tax forms. You'll spend 40+ hours trying to do it yourself. Save time which will save you money!
A CPA will most likely cost a small business anywhere from $200-500 to figure your taxes out. They know the deductions you can take more than you do. It's their job, after all. If you start out making more money than your business can spent by a long shot and you're going to end up paying 20+ % taxes on it, reinvest it into your company, give to charity, do anything besides hiding it.
Romans 13:7: Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.
Keep that in mind and your business will prosper.