Many business owners hate to pay the tax man, and so they employ a strategy of tax avoidance. Learn about the effects of such a strategy, and whether it makes sense for your business.
When you are thinking about avoiding taxes, you are not thinking about creating wealth. It’s a mindset that can be damaging to your business. As a business owner, you should be more focused on maximizing after-tax revenue to build wealth rather than focusing on tax avoidance.
EXPERT TIP | Gary Furr, Organizational Development Consultant:
Focusing on tax avoidance is a path that will come back to bite you the business owner when you either need to borrow money or sell your business. Tax avoidance is a short-term strategy with a long-term negative effect on your business and your wealth.
Tax avoidance nearly always results in difficulty borrowing money from the bank or other lending source. The problem is that bankers do not lend from the P&L or income statement; they lend from the balance sheet. When you minimize taxes, you are also minimizing your borrowing power.
It’s a strategy that also complicates selling your business. Tax avoidance means your business will not be worth as much when you go to sell because you haven’t maximized after-tax revenue.
To read more about the negative effects of tax avoidance and the benefits of wealth creation, see Chapter 12 of my book.
With over 40 years of C-level business experience and an MBA in organizational development, I am uniquely qualified to help you achieve success in your business. Give me a call to set up a free consultation: 503-312-3145.
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It’s Not Hard, It’s Business
Fundamental Steps to help business owners learn what it takes to grow their business and increase their revenue.
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