How can 1 hour every quarter help you in a IRS Audit AND build your business?
It’s that crazy business plan. Yes, the daunting document that we all say we are going to make but never do…until it’s too late.
Time after time, I find that at least 98% of the business people I speak to do not have a written business plan. This create two problems.
#1 – Your business is statistically bound to fail
#2 – You WILL lose an IRS audit
Neither of these options is a great one. However, 1 hour every quarter will solve your problems. If you do not have a written plan, how do you know how you are doing? How do you know what to do every day?
We all plan for a vacation more than we plan for our business. Why? The latter is not that exciting to most people. If it isn’t exciting, you may be in the wrong business.
Your written business plan simply answers these questions regarding your business:
Who, What, When, Where, Why, and How
You see, you do not need a 50 page document with footnotes and charts! Yes, some people do it, but it is not necessary.
If you can answer those questions, you are on your way to a great business result and you have overcome one of the biggest obstacles in defending an IRS audit. You see, people in business have business plans. Most audits are lost because the business has no plan, therefore, you are not in business. Game over.
How do I know this? I read audits. Even some profitable businesses get deductions taken away because they do not have written business plans. However, it is most small business, mlm’s, and direct sales businesses that get burned most often.
Your plan not only spells out the goings on of your business, but it links to the deductions that you take on your tax return. For instance, if you include your spouse in your plan and business, you can deduct their travel as well as yours! Simple!
In addition to having a plan, you must update it. It is a living document and changes are bound to happen. You should update it at least every quarter or when major change takes place. This also shows the IRS that you are invested in your business and it’s not just a hobby.
If the consequences of not having a plan are so great, why don’t most people have it? Easy. Knowing where to start. With that, I’ve put together a business plan template mainly for mlm and direct sales businesses, but it can be modified for others! This is a great place to start!
CLICK HERE to get your free Business Plan Template!
Cheers
Steve
