Stop waiting for another tax break to fix your underlying business issues!
A tax break is NOT the answer. It won’t fix the underlying business issues that are threatening to derail your business.
All companies face problems from time to time - the successful ones don’t try to apply a little pain relief to more serious chronic problems; they get to grips with the underlying business issues that are crippling them.
They know that pain relief is only dealing with the symptoms and helping them to keep going through the difficulties. The real problems still exist and they need a lot more help than temporary pain relief.
Why tax breaks are NOT the answer to underlying business issues
Instructions for pain relief tablets require repeat dosage and advise that, if pain persists, you should see a doctor.
Why?Because if you don’t fix the real problem, you’re going to become dependent upon pain relief.
Pain medication only masks the issue. Sure, you might still be aware that there is a problem but, when you are taking pain relief, you often ignore the need to fix the real issue.
Tax cuts and other incentives in business may have a similar effect. Whilst potentially helpful, they often provide short-term relief but mask the real issues.
And the benefit of a tax cut may not actually be very helpful in the short-term, either. You may not get the benefit until several months later, such as a capital investment incentive.
You purchase the asset now using your cashflow but the benefit is not received until you lodge your tax return, which could be several months later. Even worse if, for example, the asset you buy is a new car: unless it is to help a sales representative make more sales, it isn’t going to generate any additional income or grow your business.
So, the tax incentive, which promises to ease your pain, makes your cashflow problem worse. Sounds like snake oil!
How can you bring long-term health to your business? What does it really need to be firing on all cylinders rather than lying on its sick-bed?
Diagnose the underlying business issues
Just like no two people are the same, businesses are all different. They will have a variety of issues that need fixing at different times.
To identify what the main underlying business issues are, you could self-diagnose.
Yes, the internet is a wealth of information. But misdiagnosis is really common. Problems with cash flow could be a result of lack of sales, poor pricing, slow-paying customers, overspending, financing costs for equipment, high owner drawings, and so on.
As you can see, there are many potential causes. How are you going to diagnose it correctly - and then fix it?
I’m not a medical practitioner. So, even though I might be able to self-diagnose a problem, there is a pretty good chance I’ll get it wrong. Even if I do get it right, is there something else I’ve missed? Is this something I can treat myself for and, if I do, will it work?
The consequences of getting it wrong with a medical problem can be severe - and so it is in business.
In a medical situation, you would consult an experienced medical professional. This professional would, after gathering facts through observation, testing and discussion with you, use their training, knowledge, and expertise to identify your health issues. He or she would know how the issues should be treated and prescribe a treatment or rehabilitation plan specifically for you.
Your business is no different. By analysing your financials and other data, understanding your goals and reasons for being in business, and using experience, methods, and processes, your underlying business issues can be accurately identified. Then, a plan to fix the problems and transform your business from non-performing to high-performing can be introduced.
With so much depending upon the financial success of your business, why risk getting this wrong?