Admit it. You Don’t Have a Practice – You Have a Job
Many of my tax reduction clients are high-income professionals including doctors, lawyers and even accountants. These are people with unique financial and tax-reduction problems. Having a respectable income isn’t the problem for most of them.
The three primary problems doctors, lawyers, and other professionals have in common are as follows:
1. Working too many hours.
2. No time left for financial planning.
3. Paying too much in taxes and being too tired to enjoy what’s left of their income.
Breaking exhausting cycles like this is not simple. It’s not really difficult but it’s going to take a commitment. Here are a couple of things you can do to shift from having a job to having a business. If you have a true business model that’s working, you can take time off and the business will continue to create wealth for you and your family. If you have a job, you are obligated to be there and you don’t get paid when you are not.
Which do you have? Does your practice allow you to leave without a big dip in income? Does your practice grow without consuming more of your time? If you said “no” to either of those last two questions, you don’t have a business or a practice, you have a job.
There’s nothing wrong with having a job as long as you are aware of that. But a practice that keeps you in the “job” mode is difficult to grow without more of your time. And that takes you back to problem number one. Trying to grow your business, when it’s really a job, means you’ll work too many hours and never get a commensurate reward.
Tax Deductions for Small Business – With all that time spent on the practice, you might have some good revenue coming in but too many doctors, dentists, or lawyers have little time left to do their own financial planning. So, they give it to their spouse, their bookkeeper, or their accountant. And, it’s likely that none of these people are specifically trained in tax-lowering strategies.
So, the money comes in, everyone does the best they can with it and the money goes out. Unfortunately the amount of money going out to Uncle Sam is usually much more than it should be in these situations.
So, my recommendation for anyone facing the endless cycle of work more, spend more, work more is this. Find someone who can help you design a strategy to break this cycle. There are two types of professionals that may be able to help you.
We are not on this planet to figure it all out on our own.
It’s okay to ask for a little help.
GET HELP – First, get a business/marketing consultant to help you find the leverage points in your business. Where is there more profit, less effort, and continuity in your business? Where are the opportunities for exponential growth in your business? Who EXACTLY are your best customers and how can you give them better service in return for greater profits? To turn your job into a business you want to know what your clients are looking for and then give it to them.
Take time this week to work ON your business not IN your business.
Second, get a tax-planning specialist on your team. That person will show you how to utilize legal entities that will protect your hard-earned money and make it work much harder for you. Notice, I said, your MONEY will be working harder, not YOU! Tax planning is beyond checking off the list of business deductions and putting numbers in the right columns. Any accounting person can do that for you.
A true tax specialist will have the ability to help you create a wealth-building plan that will solve the miserable cycle of working too many hours, no financial planning, paying too much in taxes, and being exhausted!
Finally, if you do nothing at all with what you just read, at least do this. Take time this week to work ON your business not IN your business.
That higher perspective will change everything.
Have a prosperous day!
Gabby Huguenin