It’s been said that the IRS Tax code is about ten times bigger than the Bible but the difference is that the Tax Code doesn’t contain any good news. In the Bible, Jesus said, “Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, ‘This fellow began to build and was not able to finish.” Many people dream of owning their own business but do not really have a plan for determining if that business is going to be viable. In looking at a starting a business, it’s important to look at long range profitability as well as short term viability.
If you are considering starting a business, look not only at the long term profitability but also the short term expenses involved in start up. One of the big downfalls for small businesses is not being prepared for taxes at the end of the year. Because we are self employed, we knew what our end of year income was on 12/31 and because Greg does such a great job as the CFO of our virtual tour business, I also knew exactly what our expenses were for the year. Last week, I gathered all the information for our taxes and did a preliminary estimate of what our tax situation will be.
2011 was our first full year in business so we had no idea what we would owe in taxes therefore we did not send in quarterly estimated payments. With much anticipation and a little apprehension, I calculated our taxes and realized that we are going to end up writing a pretty good check to Uncle Sam. At first I was unhappy that we didn’t have enough write offs to offset more of the taxes but in retrospect, I am pretty excited.
Owing taxes means that Vision Quest Virtual Tours made a significant profit in our first full year in business. We shot 350 tours in 31 states last year so we have almost 39,000 BUSINESS miles that we can write off for the year. At 51 or 55 cents a mile, that is a significant write off. We are able to write off our phones, internet, meals, uniforms, advertising, supplies…if you own your own business, you know that the list goes on. Even after all of the deductions, we still owed a good bit. As hard as it is to write a big check to the IRS, our hope is that we owe twice that much next year because as small business owners, we only pay taxes on our PROFIT!
Starting our virtual tour business was something we did after lots of research and planning. We operated the business on a part time basis the previous year and made enough to cover all of our start up costs. On December 30, 2010, I quit my full time job and we dove headfirst into the self employed world. We went full time only when we knew we had enough consistent and projected income to make the business viable for the first year. Because we had done a great deal of preparation in the year before we pulled the full time plug, we were ready when the opportunity presented itself.
We credit much of our success to having a great partner who allows us to focus on what we do best. Originally established in 1999 as RealtorVision and now RTV, Inc. proudly supports Vision Quest Virtual Tours as well as over 100 thousand real estate agents in 27 countries. They are the largest full service virtual tour and property marketing network in the World and yet allow us the autonomy to run our own business and make our own decisions. With them acting as our back office, we can focus on photographing and building virtual tours and let them focus on things like research and development of new technology and hosting our tours.
If you are considering starting your own business, count the costs and weigh the risks. Statistics will tell you that between 50 – 90% of small business fail within the first year and yet the dream of many people is still to own their own business and defy those odds. We are living proof that the rewards far outweigh the risks!!
Vision Quest Virtual Tours is owned by Greg and Paige Mitts. We specialize in virtual tours for healthcare, hospitality and education. To schedule a tour or learn more, visit us at www.VisionQuestVirtualTours.com or give us a call at 843-410-4701.www.vquestmedia.com