Introduction to Financial Planning & Business Context

0:00

5:20

167.3K views

At 0:00 in

Why I had to spend $54,000 in 3 days

Watch on YouTube

What happens here

The video begins with the presenter introducing the concept of year-end budgeting and tax planning for small businesses. He explains his strategy of reinvesting profits into the company to avoid high tax burdens. He mentions an instance where he had to spend $54,000 in three days due to tight planning. He emphasizes that proactive planning, starting in October, is crucial for forecasting revenues and expenses to minimize taxable profit. This financial context explains the motivation behind the demolition project shown later.

Goal: Understand the business and financial context behind the demolition activities.

What they say

(2,069 characters)

Hide

Most people would get pretty excited if they were told they had to spend $54,000 in 3 days, but in all honesty, nothing could be further from the truth when you own your own small business. Today's story doesn't start on January 1st when the fiscal year ends. My story actually starts 3 months prior to that, around October 1st. That's when I began my end of year budgeting, but this year I planned it a little too tight. What am I talking about? October 1st, I start to forecast where my gross revenue is going to be, where my expenses are, and I try to get those to match up as close as possible to eliminate as much profit as I can from the company. The reason I do that is Uncle Sam will take 30% of all the profit my company shows. And don't get me wrong, I love what Uncle Sam's doing, but I don't feel like giving him 30% of all my hard-earned labor. In fact, I just don't think Uncle Sam has the same interest in spending my money the way that I want to spend my money. So, that gives me just enough time that I can reinvest all my funds and build my company to where I want to go instead of giving that money away. But this year, I didn't budget quite right. In fact, I planned too tight. I tried to get those numbers to match up, but sometimes you don't see the little things that take you by surprise. And that's what happened to me this year this year. Some major repair bills came in. You've seen that in one of the other videos. And when those repair bills came in, it didn't leave me enough funds to pay the necessary things that I could forecast for, such as an insurance bill for $20,000. I was prepped and ready for that, or a fuel bill of $10,000. No big deal, I knew that was coming. But when my funds are eaten up by unexpected repairs, I've got to now have a quick cash injection. And with 3 days left in the season, I took the money that I had earned off from a demolition job, which some of you may be familiar with where I was standing inside of a house talking about doing a kitchen remodel. Well, We're doing an extreme kitchen remodel today.

Auto-generated from the video audio.