Starting a business is a challenging journey, especially for first-time founders who are often juggling multiple roles. Losing sight of the main objective – profitability – is an easy pitfall to fall into. In the first one to three years of business, it is common to show a loss or break even on tax filings as companies focus on growing their brand.
While this may result in low to zero tax payments, it is crucial for business owners to avoid the catch-22 mindset of purposely breaking even or overspending to avoid taxes. Without the guidance of a financial advisor or a background in business, this may seem like a favorable option, but it can ultimately hinder the long-term success of the company and its eligibility for secure funding options.
Profitability is a crucial factor in accessing traditional forms of business lending, such as Small Business Administration (SBA) loans, lines of …