The possibility of cash in your business is as finite at the stars in the sky. Barring some extreme circumstances you can predict the amount of money you will take home throughout the multiple stages of growth. There will always be money and the forces of nature will always be working on it.
Here’s a snippit from Greg Crabtree’s wisdom…
4 Forces of Cashflow-Pay them in this order
Taxes-Take them out of your bank account-it’s not your money, it’s the IRS’
Build Working Capital
Dividends-Now you can pay yourself
There is a very simple way to determine your pre-tax profits.
Salary (including YOUR fair MARKET WAGE)
Total Revenue-Total Expenses=Profit before taxes
As a small business owner you should figure at least 45% of your profit is going to be paid to our government. The larger your tax payment, the more cash you made. Next time you want to brag, talk about how much you paid in taxes, it’ll sound like a complaint, we all hate to pay taxes. Let them do the math on how much you made.
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