You’re Being Lied to About Profit Tax

You get lied to a lot about: 

  • How much you should pay in tax
  • When you should pay your tax
  • How you should pay your tax.

The truth is, there are two ways you can run your company.

1. Looking Profitable

You can run your company looking very highly profitable. This is kind of like renovating a house. You buy a doer-upperer and you work on it. You put all this money and effort into it to get it running really right.

You want it to show it’s valuable. In business, it’s like you’re sitting on a big cash cow. It looks highly profitable maybe for an investor to come in or maybe to sell it at a later date.

2. Growing Strong

The second way you run your business is more around avoiding profit tax. When it comes to avoiding tax, I’m not saying you should never pay taxes, I’m telling you how to avoid paying too much tax. You do this by keeping the profit margin quite low in terms of your profit and loss statements and reinvesting money straight back into the business so it’s coming out as expenses.

This way is more for growth, which is what I’ve done for the last 3 years. I broke even nearly every single year. Now that’s a real tactical way to not pay huge amounts in profit tax. And it’s a good way to escalate your business.

Imagine a hockey stick. The second I get profit from below, I’d reinvest it here, when I get double that profit, I’d reinvest it up higher. Every single year it would look like I’m just breaking even, but I’d be reinvesting. So you’ve always got the latest tech, materials and staff.

For example: you’d rather have a tradesman out there with the best tools. He’d finish the job way quicker. That means you can send him to more jobs and make more money. It’s the same in your office with things as simple as having the best printer.

All those tiny little things are 1% each. And they add up giving you a huge return at the end of the year, especially when you start to scale. 1% of $10,000 doesn’t seem like much, but 1% of $20 million is a lot of money. So have a look at how you’re running your business and start to look at different ways you can set your business up.

Want it to look highly profitable for investors or is your goal just to create an empire and to set yourself up and grow exponentially?

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