Great Profit in Just 5 Minutes
To start up owners...
I've seen many experiences with success and failure in business ventures firsthand since my youth.
And so I would like to share that knowledge with those of you who are struggling with freelancing.
There are still many difficulties, but please read my words as an experienced senior.
By the way
Currently, in publishing, space leasing, townhouse leasing, rural guesthouses,
food services, educational services, science specialized technology and services, etc.,
Is a freelancer with over 20 years of running small businesses.
1. Reasons why freelancing is difficult
Barbe has gathered all the knowledge and experiences,
and decided to place it in a book.
In my masterpiece, 'The Younthful Millionaire's Rule', I talked about the reasons why freelancing is difficult.
Let's go through them once more.
First,
self-employed business oversaturation
Putting it shortly, the rate of freelancers among OECD nations follows after Mexico, and makes us 2nd place.
When comparing to the USA or Japan, we nearly double their rates.
That means the market is very competitive and as such we can only partake in a 'lower the prices' chicken game.
Our freelance income may have no choice but to be extremely low.
Think about this! There are 13 times more coffee shops in Seoul than in new york City.
The average price for an Americano in Seoul is nearly half the average price in New York City.
There are many stores where an Americano is 1,000 won.
Two,
tax
If you go on a trip to Japan, you will know that most consumers use cash,
and it is still an analog society with many stores that do not accept cards.
Since it is an era of glass wallets comparable to office workers,
it is a case where the self-employed in the past have benefited relatively.
(My father and mother, who ran a bookstore, have never worried about taxes.)
It is not advocating missing cash sales,
We applaud government policies such as adjusting the simplified tax rate for the self-employed.
And I think we should expand the scope of such de facto tax exemptions and benefits.
Three,
rapid rise in labor costs
During the last regime, labor costs increased by 40%.
Far from being proportional to the increase in self-employment sales, it was inverse.
Artificial increase in labor costs that does not correspond to inflation
and
Only on earth
It has been 50 years since the legislation of weekly holiday pay, which gives money even if you don't do anything, and finally implemented.
In 5 years, the labor costs of the self-employed
has doubled.
If sales had also doubled, profits would have been maintained.
Well.
By the way, wages in Japan have been the same for the past 30 years.
Just recently, along with the rebound in inflation,
It's only gone up a bit.
The higher the hourly wage, the less stable the country's economy becomes.
It has to be the same.
2. Advice for those who want to start a self-employment business.
75% of restaurant owners close their doors after four years of starting their business.
75% of those self-employed people answered:
The reason for shutting down is the high cost of rent, the inability to manage labor costs, the inability to pay taxes, or the tyranny of a franchise.
Here’s some advice for the aspiring self-employed people.
1. You can’t use a high rent as an excuse.
You’re the one who signed that lease after personally inspecting the business.
This means you had an idea of what to expect, which means you cannot blame it on the rent if you are unable to turn a profit due to poor sales.
By law, smaller businesses are protected from a yearly increase in rent that is more than 5%, and this is a 10-year protection.
If you do not like the high monthly rent, move out to the cheaper part of the suburbs. If you want to hit it big, rent a place at a higher rent and make sure your sales are high.
2. Salaries are hard to manage.
It is important to minimize hiring employees. To hire employees early because you expect business to be good is heading straight toward inevitable doom.
Even after things start going well, avoid hiring more employees without careful consideration.
When you hire one more employee (with a monthly salary of 2.4 million won), consider whether your sales will increase by at least 4.8 million won.
Try to utilize serving robots and kiosks. Every year, up to 75% of these autonomous services are subsidized by the local government.
Ultimately, ensure your business is not one that requires a lot of employees.
There’s a business that my friend and I are looking at purchasing. It is a wholesale grocery warehouse with monthly sales in the hundreds of millions of won. However, it is run by only two employees. It is a business that has been around for a long time, and the owner in her late 70s is in talks to sell it due to health reasons.
3. Unable to pay taxes
After seeing a long line of people at a bakery you opened, you might dance with joy, run out and buy a luxurious sports car, and start behaving like a rich person. Six months later, you will be attacked by value-added tax (VAT)~!
And the following May, you will be double-attacked by income tax~!
Many collapse from shock when this happens.
You need to accept that 10% (or 9.09% to be exact) of your monthly income is not yours. If you do, you will not be shocked when you file your VAT return.
The price of products sold to consumers includes 10% VAT.
This is the amount that you must pass on to the government on behalf of the country.
When you decide to squander all of it by rushing to a department store and indulge in a spending binge, it will come back to hit you twice: with the initial VAT attack and secondary delayed attack.
All that I am writing depends on a tax system of your nation.
Here are ways to deal with this:
1. Convert to a simplified tax system for small businesses.
2. Start a tax-free business.
(Some businesses are exempt from VAT, such as fruits and vegetables, butcher shops, publishing, and education, but income tax still applies.)
3. Escape the overcrowded urban area and start a business as a young entrepreneur under the age of 34.
(100% income tax exemption for five years after starting the business, followed by a 50% reduction for five years. VAT still applies.)
Remember, if you do not meet the above conditions, you must set aside 20% of your income and keep it in a separate account in order to pay VAT and income tax.
(If you have the extra cash, you can give some spending money to those that need it.)
4. Due to the tyranny of franchise headquarters
You were the one who read the contract and signed it.
If you are considering starting a franchise business, do not be fooled by the high sales figures they are promoting.
Franchise businesses are not intended to make you rich; they are only intended to make you enough money to survive.
Since it is difficult to make it with just one location, most franchise owners run multiple locations.
(This is not because they have too much money; they need multiple locations to survive.)
You will be responsible for franchise fees, royalties, and expensive food supplies.
You are perfectly aware of these costs and took that into consideration when you franchising your business, so you can hardly complain now.
Instead of worrying about these costs, you should conduct your own research about starting a business.
The most important thing to consider is the following: Before you become an entrepreneur, work in the industry you want to start a business in. (part-time or full-time) for at least three months.
3. Just because you’re busy now, does that mean you’ll soon be rich?
Customers might think so, as might inexperienced business owners, but that is not necessarily the case.
Please remember this picture:
REVENUE
Directly visible earnings
Sales and profits are not proportional so
Do not be confused with this number, which the franchise headquarters are trying to show you.
ADJUSTED EBIDTA
Earnings excluding key costs such as labor costs and utilities
EBIDTA
Earnings excluding other trivial expenses
NET INCOME
Authentic earnings excluding taxes, interest, and depreciation expense
By the way
The business that I am currently posting on the blog is a series of businesses that are almost converging on the formula REVENUE = NET INCOME.
Half Retired Life
Let's enjoy it altogether~~!!
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