Home Forums Starting your journey Question on accounting when starting small Reply To: Question on accounting when starting small

  • Total posts: 1,676

I can certainly understand the desire to minimise costs – nothing wrong with that. The problem will be if you get something wrong you could miss an important opportunity (and some things with tax law can’t be undone).

For example as an early-stage consultant, we would be looking at opportunities to claim any losses against other income – there are legitimate ways which is the secret sauce of our expertise. So say you make a $10k loss and we can claim against other income to produce $3k tax benefit – fees are paid for with only one strategy.

When involved in innovation there are other matters to consider as well. There are tax concessions for both R&D and ESIC’s (early-stage innovation companies).

It’s a dilemma for sure but I think you need to ask yourself…..what am I intending on doing with this business? If it’s a passion project (hobby) with no plan then it’s unlikely to produce much of a financial return which means every dollar you spend is dead money from a financial perspective. If there is some sort of plan and objective then you need to figure out what the business needs to look like to get there. Invariably that will involve some bigger figures and the need for financial expertise to navigate and optimise the tax and financial issues. That benefit will obviously come at a cost (and I don’t mean your typical H&R block $1500 see you next year solution).

There is no point being small for an extended period because it will just burn cash. Unless it’s for the love of it which means there is a positive non-financial return being made.