Why You Need to Start Your Own Business Today.
A few times a year I go stay with some close friend for a few days and each time the same conversation comes up. One of my friends is in the military and has been for close to 20 years. His parents were in the military as well so he has limited exposure to being an entrepreneur or owning and running a business. He has a neighbor that stops by who is very entrepreneurial and runs his own business full time. Somehow the topic of taxes comes up and my friend in the military is just amazed, shocked and sometimes even seems offended at what the business owner is able to write off in taxes. All of the deductions that the business owner takes are totally legal and are in place to help promote business and business growth, but to those that are not familiar with tax laws related to businesses it can be somewhat of a surprise.
Let me start off by saying I am in no way qualified to give tax or legal advice and you should definitely consult an expert to learn more about taxes and setting up your business structure. If you do decide to start your own business, depending on how you structure it the tax savings can be significant. Keep in mind that you need to be in business to generate revenue and run it like a business. If you don’t eventually bring in revenue than the IRS could see the business as a hobby and you can lose the deductions that would otherwise be so beneficial.
So, what are some of these deductions that you can take if they are justifiably related to, and used in, your business.
1. Office equipment such as computers, printers, furniture, phone service, cable or DSL if used for the business, office space, office supplies and other things office related.
2. Meals, entertainment such as plays, sporting events, concerts and even vacation travel if half is justified for business.
3. Education including extension classes, seminars, trade shows and coaching and consulting.
4. Hiring and/or leasing from family members. This can even include hiring your own kids or leasing property from relatives. (This must be at fare market value to survive a possible audit).
5. Auto expenses such as depreciation on a car that is used in the business.
and so many other things.
Since businesses can pay taxes at a much lower rate than an individual, the tax savings can be enormous and if the business owns everything you could realistically get your personal income taxed to a very small amount. This is part of the reason you hear that the rich don’t pay taxes.
Obviously you have to work with your tax professional to be safe and understand the implications of taking these tax exemptions, but used correctly, and in accordance with the law, by owning your own business and having it structured properly you could save thousands, or even tens of thousands, of dollars per year.
Some great resources I can recommend include Lower Your Taxes – Big Time! by Sandy Botkin and 422 Tax Deductions for Businesses and Self Employed Individuals by Bernard Kamoroff. I would also recommend the first few books in the Rich Dad series, Rich Dad’s Classics by Robert T. Kiyosaki.
Given what I have learned about the tax benefits of owning a business, I’m amazed that everybody doesn’t have some kind of small business. Why not keep more of your money and start that small business today.
A nice quiet place to get some work done.
Every few weeks my cleaning lady come by to clean my place and she is here for about 4 hours. She does a really great job and I try to stay out of the way as much as possible. Now that I work at home this isn’t so easy because, well, I’m at home.
A while back I was thinking of ways I could get out of the house and still get some work done. There are so many places I could go and so many things I could do for those few hours, but not many options that also would allow me to get work done, especially given my cleaning lady shows up at 8:30 AM. I finally settled on going to the local branch library that is a few blocks from my place and I’m sure glad I did.
I remember spending hours and hours in the library in high school and college, but once school was done I just got out of the habit. Where I live in LA, near Santa Monica, there are several options for libraries including those at UCLA, but since it is so convenient I just go to the local public library. It isn’t the best library and the chairs aren’t very comfortable. The computers have really small screens and the wireless connection is really slow, but I usually take my Mac Book Pro and it meets my needs.
What I have found is that I am amazingly productive when I am at the library. It is a quiet place with very few distractions. No phones, no T V, no refrigerator and no noisy neighbors. It is also unlikely that anybody else will bother you so you can focus on what you need to do and nothing else.
When I go, I make sure I have enough work planned that it can keep me busy for at least 5 or 6 hours and is of high value without really needing a computer, phone or much of anything accept paper, something to write with and of course reading material. I take my laptop most of the time, but don’t use it all the time.
Now that there is so much online it is kind of sad the libraries aren’t used as much. Sure you can order that book or movie from Amazon.com, but you can probably check it out from the library for free if you don’t need it long term. They also have reading hours for kids and other great programs. One of my sisters volunteers to help teach english to a lady from Mexico and my sister learns a bit of spanish and Mexican culture in the process. And like me there are lots of people who go to the library to do research and get away from all the distractions and interruptions of everyday life.
Have you checked out your library lately? You may be surprised at how valuable the library can
How to Make the Achievement of Your Goals Inevitable
About a year ago I was introduced to a concept called inevitability thinking by one of my mentors, Eben Pagan. This is a very powerful concept and if applied can have a huge impact on achieving your goals.
Before discussing inevitability thinking, first let’s take a look at the way people are motivated to achieve. Typically there are two types of approaches to achieving a large goal. Some people are goal setters that take a large goal and break it into smaller goals, trying to achieve each smaller goal. Others are motivated more by problem solving. Problem solvers try to figure out what problems need to be solved and work out how to solve them to reach the overall goal, or solve the bigger problem. No matter which approach works best for the individual, a lot of goals never get reached, or problems solved, when they could have with the correct focus and accountability.
What if you could set up the conditions so achieving your goal was made almost inevitable. Putting the conditions in place and creating an environment that promotes achieving goals is what drives inevitability thinking. By way of a few examples let’s see how this can be applied.
Let’s say you have decided you want to lose some weight and start eating healthier. Most people can stick to a plan on their own for a few days or maybe a few week if they go it alone. Now let’s say the same person hired a personal trainer, had healthy food delivered and had a structured meal plan, with friends or coworkers holding them accountable. With all this in place, the person has set up conditions that makes their success inevitable if they really are committed.
Another example might be an entrepreneur that wants their business to succeed. It can be very easy to get distracted or not focus on top priority items. If this entrepreneur where to join a mastermind group that met weekly and had to check in with an accountability partner on a daily basis their chances for success would increase dramatically. If they also chose a great mentor and surrounded themselves with other entrepreneurs that are successful or at least think the same, they have put in place even more conditions that will help make their success inevitable.
Finally let’s take something really simple. Let’s say you drink a lot of soda or coffee each day and you would like to cut back. Once again this is probably pretty easy for a very short period of time, but what would be a way to ensure success and set up conditions so you would succeed. How about you told a friend you would give them $1 or $10 or even $100 for every soda or coffee you had. I bet if you were honest about it and made it $100 you would cut back pretty quick and your friend would be really motivated to keep tabs on how you are doing.
I hope you can see that by setting the right conditions and creating the right environment you can really make the outcome you desire inevitable. What are some things you can do to make your outcomes inevitable?
Three Books Every Entrepreneur Should Read
The War of Art: Break Through the Blocks and Win Your Inner Creative Battles
This book by Steven Pressfield isn’t exactly a business book, but more a book on how to overcome what is holding you back from being creative or getting going starting your business. The focus of the book is on overcoming what Pressfield calls “Resistance” and living ones destiny. This is a great book for those, such as myself a lot of the time, who can’t seem to get on track and do the things they need to do to achieve their goals.
Resistance as referred to by Pressfield holds you back, keeps you ordinary and keeps you from the work you were called to do. Pressfield says the war with Resistance is a war to the death. Pressfield stresses that our lifetime job is to find out who we already are and become it.
In this book, Pressfield gives examples of resistance, how to view it and ultimately overcome it.
“There never was a moment, and never will be, when we are without the power to alter our destiny. This second, we can turn the tables on Resistance. This second, we can sit down and do our work.” - Steven Pressfield
The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
I can’t really say enough good things about this book. It is somewhat of a classic, but I’m always surprised at how many people I meet starting a business or in business that have not read it. In this book Michael Gerber talks about working on your business and not in your business. Gerber is referring to the situation where someone starts their own business in the hopes of freedom and more flexibility and actually ends up working harder and longer hours in their business then they did in the “job” they gave up.
Through the use of a story Gerber explains his ideas at a reasonable pace that is clear and easy to understand and provides ideas that can start to be implemented immediately.
Gerber also takes you through some of the stages of a business and addresses things such as the business development process, the businesses primary aim, organization strategy, management strategy, people, marketing and systems.
This book should be mandatory reading for anybody starting a business and one of those books that should probably be reread every once and a while just to regain perspective.
Ready, Fire, Aim: Zero to $100 Million in No Time Flat (Agora Series)
This is another really great book. In this book, Michael Masterson takes a look at the different phases of a business from startup to a 100 million dollar business and more. Along the way Masterson discusses the challenges at each stage of the business, offers suggestions on how to overcome them and hot to take your business to the next level.
Masterson discusses why sales and marketing are so important to a new business and one solid product is the way to go in the early stages. Beyond the early stage, beyond 1 million, Masterson discuss the strategy for growing the product line and the business and how hiring others to help do the work is the key to further growth. Finally, Masterson discusses some of the issues as the company gets really big and offers suggestions on how to continue to be successful and grow the business.
I also like how Masterson discusses the role of the founder of the company through all the stages and how this role will change as the company grows. For many it is a hard transition to make and Masterson does a good job of calling out what to expect.
At some point every business owner should make the decision on how big they want their business to be and their role in it. Masterson really give a roadmap of what to expect and how to be successful in each stage of the business.
One Small Step Can Change Your Life: The Kaizen Way
Ok, I’m throwing this in a bonus book worth reading because several people I know brought it up in conversation recently. Wikipedia description of Kaizen is “Kaizen (改善, Japanese for “improvement”) is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life.” In this book Robert Mauer discusses and demonstrates how very small, easy to take steps can have a huge impact over time. For example, if a person is extremely out of shape, instead of deciding to go run 10 miles just start small and walk around the block. Little by little make it a bit longer and at the end of a year you could easily be dong the 10 miles. Or for example in my case, I am working on starting a business, but have been over whelmed by all the things I want to do. I know where I want to go and have started to just take small steps, sometime as small as working on something for only 15 minutes a day, know that if I keep moving forward, I am still making progress and will get there.
Kaizen is a very powerful way to think and as demonstrated by Maurer with his examples can result in big changes.
Some wisdom from Dean Jackson
It is actually kind of appropriate this is one of my first posts because it combines my interests in life/business coaching and internet marketing. If you don’t know who Dean Jackson is, that is ok, because the article is really about a philosophy of life that Dean tries to live by, but I’ll tell you a little about what I know of Dean anyway.
Dean Jackson is probably best known for developing marketing systems for realtors. Check out one of his main websites at: http://marketingmonday.com. Dean is really one of the pioneers of internet marketing and his ideas have been copied by 100s of others even though they may not know it. To give you some idea, Dean was probably the first one to use a 1 page sales letter.
Dean was also good friends with Thomas Leonard who is considered by many as the father of modern life coaching and I’m told had a big impact on Dean. For more on Thomas Leonard check out his book The 28 Laws of Attraction: Stop Chasing Success and Let It Chase You.
Ok, so now that you have some background on Dean and how it ties into coaching I can get to the part about wisdom. Dean has a way that he measures whether he is being successful that is a little different than most people, but that I really like and have borrowed some for myself. I’ve read these in articles by Dean and also in interviews and they are:
I know I’m being successful when.
1. I can wake up every day and ask: “What would I like to do today?”
2. I can live anywhere I choose.
3. My passive revenue exceeds my lifestyle needs.
4. I’m working on projects I’m excited about. and doing my very best work.
5. There are no whiny people in my life.
6. I have no deadlines or time obligations.
7. I wear whatever I want all the time.
8. I can quit any project at any time.
9. I can disappear for several weeks with no affect on my income.
10. I wear my watch for curiosity only.
Dean uses these as a guide for his decision making processes as well.
One other thing that Dean does is have days that he calls, ” Super-Happy-Fun-Day”. Basically he sets aside days just to have fun all day and not worry about anything. I think all of us need more Super-Happy-Fun-Days.
Although it may not be right for everybody, I think Dean Jackson has come up with some real wisdom here and more of us should think about what being successful really means.