Whenever people start working with me and I ask them what their goal is I can guarantee that 9/10 times they tell me they want a 6-figure business and bring in 100K that year. I then immediately talk them out of it because IMO (in my opinion) it’s the stupidest idea ever!
Before you think I’ve gone mad or I’m not aspirational let me explain why.
The VAT threshold in the UK is £85,000 and as soon as your turnover (not profit) goes over that you’re then liable to pay the tax man 20% of your takings (not profit).
Which means that as soon as you hit your glorious goal of 100K you owe the tax man £20K and you may as well have stayed at £80K under the threshold and not done all that extra work just to pay it straight out.
I was at an event last week where they showed that 45% of businesses hover under the threshold. That’s almost half of small businesses in the UK. Once you go over you enter a whole new realm where you need a team to scale your business and you start hitting the danger zone with cashflow if you’re not careful especially if you don’t have funding in place. Many businesses go through and then fold.
Now I’m not saying stay small and don’t have ambition. But what I am saying is this:
1: If you’re going to go through it aim high so it’s worth it financially. Make sure you are at least doubling your revenue so you’re not just working for Inland Revenue.
2: If you just want a lifestyle business without any stress and without managing a team then think very hard about growing your business to that level.
Know what you want.
Building a 6-figure business does come with bragging rights, and you see enough people talking about it on Facebook but don’t let your ego get in the way. I’ve seen people build massive companies with hundreds of thousands of pounds turnover and get the best seats in the best restaurant in town, but they couldn’t afford to pay their bills because the profit just wasn’t there.
Their stress levels were insane and in the end they gave it all up to go small again and are now happier than ever.
Just a little something for you to think about as we hit this final quarter of the year and you start making plans for 2019.
I’m putting together a Big Me Up Content Day later this month where we plan out your sales and media campaigns, so you know exactly how much to bring in. Details coming soon.