The Magic that makes a better lifestyle

Every Friday we just want to stop the world for a moment and give you a couple of real tips to think about that will make a real difference to your business and in your life.

It’s Friday and if the weekend hasn’t yet started for you yet, it will very soon.  Or will it?  

Quite a number of people work through the weekend and take a break on another day(s).  However, a lot of people, particularly those in small business tend to work their core hours, then put in a few hours to take care of admin, then a little bit of designated panic/worry time over what the next month may or may not bring, then…  Realistically though, everyone takes a break, be it short power-packed escape from the business say, every quarter or a more leisurely exhale once every year (or so) and pay the price later.  But is this the best way to enjoy the fruits of your labour and if not, are their alternatives?

 

Alternative business lifestyles

I know a lot of people who work for someone or a company and they turn up Monday through Friday.  Their desk/cubicle/office is their home from 9 to 5 (okay 8-6), five days a week, 48 weeks a year.  Some of them like it, some just shrug, some genuinely love it.  But what I find is that those that leave to start their own business, weren’t loving what they were doing previously – for a variety of reasons.  They felt trapped, wanted to spend more time with family and/or friends or just felt that there was something better out there for them.

What a lot of them find though is that their new life is a combination of what we just talked about: core hours of work, stress, admin – a lot of work for less-than-anticipated reward.

There is another lifestyle that can be achieved and it’s probably closer to the one that we all envisage when we get started. That’s the one where, on a monthly basis, we:

• feed our time energy and passion into the business,
• take home an amount of pay that we’re happy with,
• reward ourselves with a bonus if and when everything comes together and we post some outstanding results
• enjoy more time than we thought possible with our loved ones, doing things we love
• take care of the tax payments (only what you need to pay of course) and
• service all expenses – overheads, subscriptions, debts

Some of you are living this life already as opposed to thrashing around in the ocean of small business, coming up for air when you can and calling it a holiday.  What you need is a little magic!

 

The secret behind the magic number

Like all good magic tricks, it looks baffling, impossible even.  But when you’re shown how it was done you say, “wow, that was a lot simpler than I thought it would be.”

If it feels like those 6 points are magic, it’s because they are.  These are the basics that make up the magic number that we talk about so often and so passionately.  You’ve heard the saying, “you can’t hit what you can’t see?”  In this case it’s true.

Tip: Go ahead and assign dollar values to each of those 6 points.  When you add them all up, you will have the magic number your business needs to come up with to live your alternative lifestyle, the one you always wanted.

 

So go on, find the magic in your magic number (we can help you with that) and have that weekend you’ve been wanting – every weekend.

Driving your business: A car for you or your business?

For business or pleasure?  That’s a question you still get asked at customs desks around the world but it should also be a question we ask ourselves whenever we roll up to a car dealership.

As with everything in the car yard or showroom, there are pros and cons and this is especially true of the question, “should I buy my next car in my company name, or my personal name?”

The short answer

The short answer – it depends.  The more useful response is to ask yourself what the car is being used for.  If your answer is something along the lines of “I will be using the car for work: getting to meetings, picking up stock, deliveries…” there is only one answer: YES.  And yes, it’s all in capitals.  To be clear, if your answer was yes, stop reading and move onto signing that paperwork.

No wait.  Come back.  Let’s look at the slightly longer answer which is made up of a number of short questions.

Ask yourself…

• • Can I / my business afford this car?

• Unfavourable financial positions are rarely, if ever, improved by the purchase of a vehicle, if your answer here is no, then the company car question is an issue for another time.

• • Should I / do I need to be registered for GST?

• Yes.  Mainly because once your business is turning over more than $75k p.a. you need to be registered for GST and this will be reflected in your quarterly BAS (business activity statements).  We’ll come back to GST and cars in a moment.

• • What’s the downside of not registering my work vehicle as a company car?

• Well aside from the fact that all expenses, upkeep and registration costs associated with the vehicle could fall entirely on your shoulders, you’ll end up paying more.  Or more precisely, you won’t be saving as much tax.

A brief anecdote on how I saved thousands by making the right choice

December before last I bought a 2015 Ford Ranger to say, “well done Ben, that was a great year…” or something like that.  Happily, 1/11 or 9.09% of all new vehicle prices are made up of GST.  (Small businesses can claim that sum of money the moment you finalise the purchase by either by paying for the car upfront or confirming your finance arrangements with a bank – they pay for the car in full, for you.)  So I bought my car in December 2015 and within 3 weeks I had submitted my BAS and claimed the GST which took care of the first few repayments as well.

GST can work for you as well and that is something to be considered when you are thinking about registering your new vehicle for company or private use.

Of course everybody’s circumstances are different but by and large there are only two rules to remember: if you use your car for business, your registration should reflect that and secondly, get on the phone or flick an email to someone that understands how best to put money back into your business.

Why not test drive an accountant today.