Tax Strategist’s Formula for Turning Profits Into Long-Term Wealth

Turning profits into wealth is the goal of every business owner, but getting there requires a “strategic and proactive approach,” according to wealth and profitability strategist Marta Skik Harich.

“Building wealth through profits requires a combination of strategic taxplanning, smart financial management, and proactive decision-making,” said Harich, founder of accounting and taxstrategy firm Prestige Business Enterprises. “It's about consistently finding opportunities to optimize revenue, reduce taxes and control costs while also staying ahead of the competition."

Harich said smart financial management is critical for creating long-term wealth, and the first step is to maintain accurate financial records.

"Business owners should focus on maintaining a healthy cash flow, reducing unnecessary expenses, and making informed pricing decisions,” she said. To optimize profitability further, Harich recommends proactive taxplanning.

“By understanding the intricacies of the tax code and leveraging legitimate taxstrategies, you can minimize your taxliabilities and keep more money in your pocket,” she said. Taking advantage of available deductions, credits, and incentives “will provide cash that possibly could have been overpaid on taxes beyond what your minimum legal requirement should be.”

Streamlining operations and cutting unnecessary costs can improve profitability, but investing in innovation is also a “key driver” of profits, Harich said.

“Many business owners overlook the importance of continuous innovation. Stagnation can be detrimental to profitability and long-term wealth creation. Industries are constantly evolving, and customers' needs and preferences change over time,” Harich said. “By constantly seeking ways to improve and differentiate your offerings, you can attract more customers and command higher prices.”

Harich also advises business owners to seek professional guidance. “Engaging with a qualified certified public accountant or financial advisor who specializes in working with small businesses can provide valuable insights and customized advice tailored to your specific circumstances,” she said.

"It's important for business owners to remember that wealth creation is a long-term journey," Harich said. "It requires a commitment to continuous improvement, adapting to market changes, and making calculated decisions that align with your overall financial goals."