Pay More Taxes Next Year (happily)!

Hey, no one wants to pay taxes at all, but to keep government working to provide all of the services we’ve come to expect, we all must cough up some of our hard earned money. Now this post is not on the tax code or how your accountant labors to find loop holes and deductions to lower the amount you owe. This post is about how you can pay MORE next year.

The way to pay more is to make more. And even though it will cost you more in taxes, you’ll be pocketing a great deal more. You’re probably wondering how that can be accomplished, so here’s how:

Every time you sell a product (at full price), you take in enough money to pay your vendor, contribute to overhead, and make a profit. Of course this only happens when you actually sell a product. So, it stands to reason that the more you sell, the more you’ll be able to pay your vendors, contribute to overhead and take your profit. The big question is – how much do you think you can sell.

Once you have determined how much you can sell based on your store’s location, demographics, weather patterns, size, advertising, etc. then you can start planning how much you need to buy. The other factor in your buying plan needs to be turnover. Simply put, the more you turn, the more you make. Turnover is a combination of how fast you can get the merchandise, how long you want it sitting around, and how much stock you need to be properly represented.

You want to maximize sales at the highest possible turn rate. So as you increase your turnover, you are actually extracting additional contributions to overhead and profits from the same invested capital. When you do that, you’ll make more money… and pay more taxes.

To accomplish the above requires open to buy planning. This process will determine your buying plan based on anticipated sales and desired turn rates. Open to buy will determine the quantities you should buy and you need to follow the plan, otherwise overbuying will result and lower your taxes by creating big losses.

Follow the system and make more money. Next year the IRS is really going to love you!

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