You owe the IRS a lot of money and you want a way out of this hole. Most people that get into this problem are business owners and they tend to overlook one of the best strategies available — make the business more profitable.
That is easier said than done, but now you have a large incentive to make real changes. Consider some of the following steps:
- Write up a one-page strategy statement that details your business purpose, vision, and values.
- Do a SWOT analysis and identify your strengths, weaknesses, opportunities, and threats.
- Using your strategy and SWOT analysis, write up an action plan that separates those steps that will produce a short-term vs. a long-term positive change.
- Implement. Planning is great, but actually doing it is what counts.
The change that can make the biggest impact on your profitability is your pricing policy. Marking up costs to produce a sales price is easy, but probably won’t get you where you need to go. Value pricing is a better way to go. Even a 1 or 2 percent change in pricing can have a major impact on your bottom line.
There are also the more traditional changes that will make a one-time jump in your cash flow such as collecting on your aged Accounts Receivable or reducing inventory levels. Be aware that unless you fix your systems to stay on top of these issues, the balances will tend to slip back to where they were before.
Improving your business profitability is hard work. After all, if it were easy, you would have already done it. The alternative is to shut it down and do something else to produce the money to get the IRS off your back.