Guest Post: Profit Margins, the IRS, & Yoga Pants

My friend, Rebecca Smith, is also going to be a monthly contributor here on the blog. Her voice is clever and strong and so needed these days. Dig in, friends…

Every single year, I make a huge mistake with taxes. Nothing illegal. Just a mistake that leaves our business in some pretty tight jeans for the first quarter. Think, pre-pregnancy size. Ouch. So uncomfortable.

One year, I misunderstood how much money the government would take out of our profits. I was pretty happy with how much profit our company had held onto that year. And I specifically asked our operations manager to not spend money until January 1^st so that our profit could remain as high as possible.

Turns out, high profit isn’t such a great thing.

At least it feels great until you have to write the biggest check of your entire life to someplace called Internal Revenue Service. I feel like I should get a plaque on the wall of their bureau and be inducted into their Hall of Large Checks. That check deserves to be framed.

In reality, it probably was pocket change to what they are used to cashing. But it was very painful for me to send off.

So I thought I’d do things differently this year.

I figured I’d rather spend more money on my employees, have a lower profit, and write a smaller check to the government. So I wrote FAT bonus checks at the end of December. Like really big. And spent lots of money that last week of December for the business. Extra supplies. New computers. Another sewing machine.

And everything felt great until our accountant emailed me.

She told me how wonderful it was that I gave such grand bonuses. But had I remembered that I would owe payroll tax on each one of those checks? And then she dropped another grossly large number that would be deducted out of the bank the next Monday morning.

The government was once again tightening our belt. Taking us out of our yoga pants and handing back our pre-pregnancy jeans. And I was left regretting all our purchases and most of our bonuses.

Maybe you’ve been there. I mean, who really loves the part about running a business that involves writing checks to the government.

But let me share some lessons to be learned. Whether you’re still in your yoga pants or squeezing into those pre-pregnancy jeans like we are.

You can’t trick the IRS. They are going to get their money however they can. So now, every time I drive on an Interstate, I imagine a sign on the side broadcasting that the next hundred miles have been adopted by Better Life Bags thanks to their generous tax donations. You’re welcome, America.

Also, Jesus wasn’t kidding when he said that the heart is deceitful above all things. Every December, I get this twitch in my heart and twinkle in my eye as I scheme various ways to make our lives more comfortable. I envision bathroom remodels with deep tubs and bottles of wine. New minivans with automatic sliding doors and a sun roof. A new wardrobe. Or at least a few new pieces.

But I leave God out of it. I don’t think He is against nice things, but I think He IS against nice things without including Him in the conversation.

I’m the CEO, right? I get to make the decisions and I get comfortable after I work out my math and decide that all is ok. I put my feet up and sink deep into my yoga pants.

I don’t ask Him about bonuses or profit margins. I don’t remind myself that success is not in the % leftover at the end of the year but in the day-to-day obedience of loving God and loving people – with our time and our money.

And He so graciously reminds me. In such hard ways.

But He disciplines those He loves.

The hard trials we go through, the tight pants He asks us to wear, they are disciplines for His beloved children. So I’ll suck and tuck, zip the pants as high as they go and feel the tightness around my waist as a reminder to include God: Steward what He has given rather than lead the way I want.

Rebecca Smith is the CEO and Founder of Better Life Bags, a custom handbag company that hires women with barriers to employment in the Detroit, MI area. She, her husband, and their three kids are intentional city dwellers—choosing to live in the same low-income, under-resourced community as their employees. When not working or designing new bag designs, you can find her snuggling with her kids, reading a good book, or listening to loud worship music. You can read more of her writing at RebeccaSmithOnline.com or hang out with her on Instagram @RebeccaSmithOnline.