I 've been a small business owner for less than a year. how can I spend I spend money legally on myself?
How much may I spend a month without going broke?
- 1 decade agoBest Answer
You are your own boss now so you have to take a portion of your profits to pay your self and out the rest back to cover your overhead and expenses.
You have your sales tax to do each month...etc
When I owned a business I tried to focus on how much money I made when I was working for other man in the same business.
I got so good at it that I started my own business and then tried my best to make a profit of $170.00 per week until my business grew.
Within a month I was making $300.00 a week profit, but only used the $170.00 and put the rest back until I got on my feet .
I eventually leased a building and landed a million dollar contract that set me on the highs of my life.
I was good and my customers knew it.
A good rule of thumb to go by is to spend what you need and do without the things you want at at least for two years and you will see yourself sitting pretty.
At the end of my first year I made a profit and paid all my taxes now that's a good way to start your business affairs off in the right direction.
- 4 years ago
Well, not to dissuade you too much, but I don't know that right now is the best time to venture out into your own business. With the economy flailing like it is, the business environment is pretty shaky. Keep in mind that if you do start your own, you will have things like healthcare insurance that you will need to get on your own, and it can be extremely costly. I know an acquaintance who tried to start his own business earlier this year, and he is really struggling. When the economy tightens up, there is less money available for companies and individuals to spend, so unless you are providing an absolutely necessary service or product, you run the risk of defaulting. Not to mention the fact that if you leave your job, and the business does fail, you may have a hard time finding a similarly paying job again. I would suggest keeping your full time job, and doing a little something on the side to see what the market is like. If you get so busy that your regular job becomes a nuisance, then you can make a decision aobut what to do. If you find that you are not very busy, then maybe you can decide to wait until the economy levels out a little. I am not trying to be a dream killer - I am all for small businesses, and I too have a dream to have my own one day. I just don't know if now is the best time. And, as everyone will tell you, it's all about timiing. Good luck to you : ) UPDATE : After re-reading your Q, I can see that you had already thought about all that. My bad! Sounds like you have a good head on your shoulders, and are being responsible. I wish you the best.
- kemperkLv 71 decade ago
this is actually much easier than you think!
before you ARBITRARILY decide such a thing,
get to an accountant and have both
a balance sheet and income statement
created for you.
in the income statement, you will find such
things as COST of goods sold [or of services
then you will have gross profit,
and expenses, which may include a draw
[same as salary.]
after all that, subtracted from gross
profit, you have net profit.
YOU may pretty much spend part of that.
but you have to lay $ aside for growth
and whatever, called RETAINED earnings.
fyi--90% of small biz owners never have
financial statements done and they go broke
because they spend the rent money or
utilities money on fun.
SOME companies take 3 YEARS before
they cover their NUT--the nick name for
the amount of gross profits needed to cover expenses. Everything after that may
be spent AS long as you leave something for
taxes..[it is a bit more complicated than that
but that is the jist of it.]Source(s): biz consultant and past acct instructor.
- SparklesLv 71 decade ago
You cannot spend money on yourself and be able to declare it on your income taxes. You could try and do this by falsifying invoices and receipts, but I pity you if the IRS comes and does an audit on your business. Even CPAs will have nothing to do with you doing this. Everything you buy has to be able to be used for the sole purpose of your business. The only thing in the way of clothing are uniforms and shoes are sometimes questionable, that are needed for the business.
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- 1 decade ago
Owning your own business has many advantages but you have to be smart about it.
If you have a home based business you can write off electricity bills as a business expense. You can buy a car for your business, buy a house in Hawaii as an employee retreat and take business trips. All can be tax advantages.
- 1 decade ago
Not getting exactly what your saying but if you are wanting to be able to have more money to be able to do things with then you need to see where you are spending the money. Like your monthly bills, advertising...so forth! Maybe cut down on some things!
- walterknowsallLv 51 decade ago
you make a budget for your business, your wages, rent for the storefront or office, cost of phone, lights, supplies, items or service sold to people, cost of advertising, and your wages...for example, your sales for the month are $5.000 average....out of the total sales amount you pay all the expenses including your wages and wages of any staff or employees.....
- GD-FanLv 61 decade ago
depends on how much the business makesSource(s): business owner
- Anonymous1 decade ago
if you don;t know this, then you need to hire someone to teach you about cash flow projections and other things...