Assume you run a small service business. The business is incorporated. In a typical year, the business
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Assume you run a small service business. The business is incorporated. In a typical year, the business looks like this:
Revenue $450,000
Salary (to you) 100,000
Salary (employees) 250,000 Rent 53,000
Supplies 20,000
Taxes 25,000
Total Expenses 448,000
After-Tax Profit $ 2,000
Each year a small amount of profit is left in the business to serve as working capital. You currently bill at $50 per hour. Assume you cannot find more hours to bill. Inflation has caused rent and supplies to increase by $10,000. What do you do? What if the increase was in taxes instead of rent and supplies? Would your answer be different?
Expert Answer:
If the increase was in rent and supplies I would try to find ways to reduce those expenses I would l... View the full answer
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