As we all know, the economy sucks. I've seen and heard about a lot of small businesses going under during these tough times. I've considered myself fortunate enough to this point to be hanging in there. But I can see how it gets to the point it does. I've wondered recently if it would be better if I got a "real" job with "real" insurance. Why? Where to start...
Insurance. First of all, when I bought the business, I lost my "traditional" insurance. You know the kind. You go to the doctor's office, pay your co-pay, and leave. Not to worry about much else. I had to try to find individual insurance, and was turned down several times before finding a plan that is extremely over-priced, and coverage is minimum. I've only used it twice in the year that I've had it, once for my ankle debacle, and once for a dentist visit. And I paid extra for dental coverage. At the foot doctor, the insurance didn't cover the air-cast that I needed, so I paid a good amount out of pocket for that. I then received a bill for the remaining balance after all the insurance was filed. A pretty good chuck of change. Then yesterday, the remaining balance of the dentist bill came in the mail and it was so high, that I wondered what the insurance covered, and why I was paying extra for dental coverage. Then I get a letter stating that the premiums are going up. With *all* that it covers, I'm considering canceling the insurance, and just taking my chances again. I did it for a year before I got this insurance. And financially, I may have to go back there again.
Income. Somewhere along the way, I lost the memo that said if you own your own business, you'll make less money. Yes, there are benefits of owning a business. Income is not one I've seen so far. When you factor in all of the bills, wages, insurance, and the cost of all the little things, well, that just leaves little money for the boss. One thing I am proud to say, though, is that I am a 100% debt free company. If I need something, it gets paid for in cash (or check). I have no credit card debt (in the company name) and owe nothing other than normal monthly bills. And taxes. Taxes. And more taxes.
Taxes. When you own a business, taxes are a pain in the ass. Period. And as an LLC, it's just all kind of bizarre. I don't get a paycheck anymore, so I don't have taxes taken out like normal. Instead, I have to pay estimated taxes quarterly. That would be fine and good, if I only had to pay taxes on what I actually paid myself. But it doesn't work that way. So, I'm personally making less money than I've made in the last 10 years, but paying more taxes than I ever have too. Confused? Let's just say that the company's profit for a given year shows $100,000. But I only took out $50,000 in a "salary". I have to pay taxes on $100,000. {By the way, this is not even close to the correct figures.} On my tax return, it shows my "Adjusted Gross Income" as $50,000, and shows the company gain of $100,000. And yet, I still have to pay. Gone are the days of tax refunds. I wish there were bigger/better/other tax credits for people who own small businesses.
Employees. Ok, I can't really rant here, because I am fortunate enough to have a great part-time girl that works just about any time I ask her to. It's a fine balance on how much to have her work. On the one hand - it actually benefits me a lot on taxes to have her work for me. I can't have her work full time, because then I'd have to offer her benefits (which I couldn't afford) and there wouldn't be enough money left for me to take out the little I do now. And there's all the ribbing from my friends about me taking time off again. Yes, I LOVE having extra time off. Especially in the summer. But I also enjoy the tax benefits of her working. If she wasn't available to me, then I'd be in the same position as a lot of other small business owners, and that is trying to find someone you can trust to work for you when you aren't there. Not an easy thing to do.
I LOVE what I do, and think I'm pretty good at it. I have some of the best clients in the world! They truly make a difference. I would hate to give it all up, but unless I can find some alternatives, I might just become another number in the sea of small business that don't make it.
It certainly is not easy to own a small business. I mistakenly thought otherwise. And I certainly would have not been able to do it without a lot of forces in place to support me. For that I'm very grateful.
AMW
1 comment:
Sending you good business wishes!!
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