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Business Start-Up Case Study
Client's
Challenge
A husband & wife initially contacted SMG to help with reducing their annual tax liability of $21K. Additionally, the husband was interested in leaving his job to start a public relations company. The clients were seeking advice on starting a business and to get an understanding on the financial impact the business start-up will have on their household.
SMG's
Review
SMG Consulting Group reviewed their tax return and identified that their income were driven by W-2, which limits tax strategies to implement. SMG reviewed their personal financial transactions in which a substantial amount of expenses were recognized as potential business expenses. The client’s initial plan of starting a business was reviewed.
Solution
SMG Consulting Group provided advisory services to demonstrate the benefits of starting the business while the client is still employed. A personal financial plan and strategic business plan were created to illustrate to the client the work required to accomplish the income goals compatible with their current household income. SMG created the legal business entity for the client and assisted the client with creating systems to track their financial and business progress. As a result of the client launching the business while being employed, the annual $21k tax liability was eliminated and the client received a $2k refund. Two years after meeting with SMG, the client now operates the business full-time generating more income than previous employment salary.