When you think of owning your own business, often debt comes to mind more than the farther off financial perks—even if your business idea stems from a lifelong goal, or is a passion for your avocation. Most small businesses are lucky if they can get out of the red side of the ledger by their fifth year. However, there are a huge volume of benefits you can unlock as a small business owner. What are some of the financial perks of owning your own business?
Deduct Expenses
Very basically, if you use something for your business, you can deduct its price from your expenses. What does all of this include? According to FreshBooks, this can mean general office supplies and equipment, and any fees from specialists that you employ to keep your business running, like legal experts or your tax preparer. It can also mean your car if you drive it for work purposes, though you will have to track your mileage, as well as education and even child care!
Have More Control Over Your Retirement
Small business people have many choices when it comes to retirement savings. You can have an IRA, a standard 401K, or an SEP IRA. This gives you options if you need to take money out before you reach your retirement age as well. According to Franchise Gator, you can also use a 401(k) as an additional source of business financing. This insulates your business from being lost if revenue dried up momentarily, or if there is a shift in the marketplace.
Multiple Revenue Streams
Sometimes as a business owner you wear more than one hat. You might, for example, do accounting and financial planning, while also being a seamstress and online marketer! The important thing is that you have multiple different customers contributing to your business’s income, or even multiple small businesses contributing to your own income. According to The Self Employed, lots of contractors wear multiple hats when they do their work. This diversification might seem strange, but it actually protects your financial stream. You no longer need to be afraid of losing one particular client, or having one line of work not be as prolific during pandemic waves. This gives you freedom to dump a particularly troublesome client as well!
Your business needs to be pulling its weight financially, and that includes a lot of work to learn the nuts and bolts of business finance. Find those tax write-offs, and diversify your revenue streams. Don’t forget: someday you want to retire, and only you can make that happen!
If you’re passionate about something, why not turn it into income? Schedule a consultation to get started on your business journey!