This is a fantastic question and we hear it from time to time:
“I have too much profit, what can I do about it?”
It is however a coded version of something else, and it can mean either:
• I don’t have enough profit. I know that, because I have drawn all the money out of my business and I have nothing left to pay my tax bill (and so you must magically engineer a smaller profit for me and a smaller tax bill)!
• I have ridiculously large sums of money floating around, even after paying all my tax bills, I have the home of my dreams, the car of my dreams and I fly everywhere first class, and now I’m in danger of taking up a ridiculously expensive hobby like round-the-world yacht racing!
Depending on which of those statements is the closer to the truth, then the solution is either:
• Make more profit and manage your tax reserve on a weekly or monthly basis. In the short term, borrow some money so that you can pay your tax bill. See Zopa for more details of how you can borrow modest amounts of cash at reasonable rates. We are not in the business of engineering false sets of accounts.
• Become a business angel and invest! There are entry level ways of doing this, even if the pool of cash is as low as £1,000. See Zopa for more details of how you can become an ultra cautious business angel.
If you would like to make more profit, then you need good business advice. Call us and ask about business coaching – we will start by asking you for a copy of your business plan.
Or you can start by looking at Don’t Read My Blog.