Are You Stealing From Yourself? [THA 351]
Episode 351 •
26th October 2023 • Remarkable Results Radio Podcast • Carm Capriotto, AAP
00:00:00
00:41:38
Shownotes
"When you take cash from the business, you are strangling cash flow, and you end up in a situation where you can't pay your bills."
Murray Voth, Rick White, and Bill Haas discuss the consequences of not reporting income, the importance of understanding cash flow in business, the pitfalls of tax evasion, and using personal credit cards for business expenses. It's not just about making money, but also about managing it effectively.
Murray Voth, RPM Training. Listen to Murray’s previous episodes HERE
Rick White, President and Lead Coach for 180BIZ, Listen to Rick’s previous episodes HERE.
Bill Haas, Haas Performance Consulting, Bill’s previous episodes HERE.
Show Notes:
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- Stealing from yourself and the consequences of not reporting income (00:01:29) Discussion on the potential consequences of not reporting income and the impact it can have on succession or eventual sale of a business.
- The importance of cash flow and its impact on paying bills (00:03:01) Exploration of how taking cash out of a business can strangle cash flow and lead to difficulty in paying bills.
- Being a role model in business and the value of ethical behavior (00:06:37) Discussion on the importance of being a role model in business, including paying for personal expenses and setting an example for employees.
- Profit and Taxes (00:10:21) The misconception of avoiding taxes in business and the challenge of having positive cash flow but negative profit.
- Personal Expenses on Business Credit Card (00:12:03) The consequences of using personal credit cards for business expenses and the tax implications of treating it as a shareholder distribution.
- The concept of profit first (00:19:06) Mention of Mike Michalowicz's book "Profit First" and the idea of paying oneself as a business owner.
- The consequences of not reporting income (00:20:27) A story about a shop owner trying to sell their business while hiding income, and the potential legal consequences of normalizing income statements for the purpose of selling a business.
- The consequences of not reporting income (00:24:36) Discussion on the importance of planning and preparing for taxes, and the potential legal and financial consequences of not reporting income.
- The need for processes and accountability in end-of-day closing (00:27:17) Conversation about the necessity of implementing disciplined processes and accountability measures to ensure accurate end-of-day closing, including balancing cash, credit card payments, and accounts receivable.
- Using budgets and comparing to previous years (00:33:56) Exploring the use of budget and previous year's numbers in analyzing the profit and loss statement for better understanding of the business.
- The impact of stealing from oneself on business valuation (00:37:42) The consequences of stealing from oneself on the valuation of the business when it comes to selling or succession planning.
- The consequences of not reporting income (00:40:16) Discussion on the importance of running a business independently and the negative consequences of stealing cash and not reporting income.
