Category

Finance

Taxes

Death & Taxes

By | Accounting, Finance, Follow-through, Systems | No Comments

Taxes“It’s income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta.”

 

Dave Barry

 

 

It’s that time of year again. Ain’t it fun?!?

 

Don’t get  me wrong. I don’t mind paying my share for our military, roads, law enforcement and other systems we need in place to keep our society stable. There are just three things that bother me about paying taxes:

  1. The complexity
  2. The waste
  3. All of us become liars – some in order to pay less in taxes and some accidentally because of reason #1.

So what does that mean for your business?

 

Know what you are getting into. Find resources that help you make your business grow in spite of your tax burden. Use a group of professionals that can help you steer through it.

 

Make sure your professional is the right one. I just sat with a client this week that is very worried about how much he will owe in taxes. He has switched CPAs because he felt he had outgrown his previous CPA. Now it looks like he may have more tax liability than he planned because of poor advise and because he failed to do the next hint:

 

Prepare ahead of time. Make sure you are have a sales tax account if you are collecting sales tax. Make accommodations for your employee’s employment taxes and your own self-employment taxes. This is sacred cash and should never be disturbed until you have paid all taxes. It’s better to have a little too much in the account at the end that you can re-invest than to be stuck with a bill your business can’t bear.

 

Create a system and be organized. Unfortunately many of us have trouble keeping a mileage log, filing receipts, balancing our books regularly and keeping up with our tax commitments throughout the year: quarterly state taxes, estimated self-employment taxes, sales tax reports, unemployment and workers compensation. If you create a system to make them happen, it makes it easier to stay out of hot water.

 

Finally, get involved. Let your local, state and federal officials know how you feel. Become part of groups that influence how taxing decisions are made: professional organizations, business lobbyist organizations, and chambers of commerce allow you to amplify your voice.

 

At the end of it all: the only sure things in life are death and taxes. Be prepared for both.

 

 

 

Marketing Follow-Through

(January 30, 11:30 -1:00 – Poulsbo Chamber of Commerce)

Co-sponsored by the Poulsbo Chamber of Commerce, this is a FREE Lunch and Learn series.

Most of the time our marketing becomes a flash in the pan because we fail to follow through. Get some Ideas on how to close the gap and keep leads, customers and clients from falling through the cracks.

Eventbrite - Marketing Follow-Through

or

Call 360.779.4848

mayan_calendar1

Fiscal Cliff . . .

By | Accounting, Finance, life style, Systems, Uncategorized | No Comments

mayan_calendar1“Be Prepared”

 

Boy Scout Motto 

 

If you are reading this, the world has not ended – yet. Our politicians battle about the impending fiscal cliff that will spin the entire US economy into a financial disaster worse than the Great Depression. At the same time, our National Debt continues to rise, random mass shootings seem to be  happening everywhere, unemployment is still high, and any other headline you see in the news may impact your life at any moment

 

How do you protect your business and family from all of these impending catastrophes?

 

I’ll call on Stephen Covey to start. It boils down to circles of influence. Most of us have little influence on the debate in Washington. We vote, write our congressman, stay abreast of what is happening, and let our voices be heard in various other ways. Beyond that, we have little influence.

 

What we can do is prepare our selves, businesses, and families for the most probable of situations?

  • Reduce or Eliminate Debt. You don’t need to fear what the banks or lenders will do when they are in need of cash. Any of them call “call the loan” at any time and expect all of the debt to be payed back. Without debt, all cash flow is completely in your control.
  • Cash reserves. Keep six months of cash put away in an account. I suggest two accounts: one for your business and one for your family. The amounts there do not need to be extravagant – just enough to keep either the business from folding if there is no revenue and enough to take care of the bare necessities of your family (food, shelter, heat). These accounts can also be used when an incredible investment opportunity presents itself.
  • Educate Yourself. When the Zombie Apocalypse comes, have a basic knowledge of survival techniques: find shelter, build fires, find clean water and food. Not only will it protect you from the Zombie Apocalypse, but should you ever get stranded in a snow storm or caught in a natural disaster you will be ready.The same is true for your business. Knowledge and skill will help your business survive almost any catastrophe.
  • Have a Plan. This is something that they taught us in elementary school. If there is a fire, you should have an escape route, a back-up and a meeting place. The same is true for any other catastrophe that may occur. Know what you would do if . . .

 

When you are prepared, fear will not be the basis of your decision.

We Need You!

We are putting together Accountability Partnerships! This is a new accountability and educational format I have developed based on Napoleon Hill’s Master Mind.

Learn more at the Accountability Partners Website!

www.boommybusiness.com/accountability_partners.html

 

Building Blocks

Building Blocks

By | Cost Controls, Finance, Leadership, Marketing, Operations, Systems | No Comments

“Every block of stone has a statue inside it and it is the task of the sculptor to discover it.”

 

Michelangelo (1475-1564)

A business is nothing more than a system of systems that create value. So examining those systems, there are five basic systems every business should have. I call them the 5 Building Blocks of Business.

  • Marketing
  • Management/Leadership
  • Operations
  • Controls
  • Finance

Of course within those categories, the specific systems that create widgets, tools, knick-knacks, food, services or experiences depends entirely on you as the business owner.

 

In each of my Kicks In the Butt, I try to address each of these individually. Today I am taking a step back and looking at the system as a whole. I am breaking down my own business into these systems with the intent of having them all work together in a seemless fashion.

 

Take a couple of hours over the next few weeks to review your systems. Where is the hand-off from one system to the next? What systems do you have within each of these “Business Building Blocks”

 

I have a very simple diagnostic for reviewing these building blocks. Email me or request it here if you want a copy sent to you.

 

 

Too much material when you're done?

Shrinkage

By | Accounting, Cost Controls, Finance, Time Management | No Comments

Eliminate Waste!

“To me an unnecessary action, or shot, or casualty, was not only waste but sin.”

 

T.E. Lawrence (1888 – 1935)
The real-life “Lawrence of Arabia”

 

Last week I built a wood shed in my back yard. It’s nothing extravagant and only holds about a cord of wood. As I started building I realized that I had not adequately drawn out my plans.

 

The result: Wasted materials and wasted time.

 

It’s fine now. I got it put together and ready for our first cord for the winter. However, I could have saved myself about 30% of the time I spent building it and saved myself 20% on materials. I also have some materials left over that I know can be good for something besides burning it to heat my home.

 

Every day, businesses waste time and materials. Material lost between product and sale in accounting terms is called “shrinkage”. (By the way – this is not the same shrinkage Seinfeld joked about.)

 

After completing a project or a batch – look around at what is left over. Create a plan to reduce the waste.

 

If your business is about service, how can you complete it more quickly?

Don't Bleed to Death

Bleeding to Death

By | Accounting, Cost Controls, Finance | No Comments

 

Don’t Bleed to Death

“For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?

Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him,

Saying, This man began to build, and was not able to finish.”

 

Luke 14:28-30 (KJV)

 

If a man is bleeding to death do you immediately give him a transfusion or should you stop the bleeding first? Most of us would move directly to find a way to stop massive bleeding before we try to get more blood flow into him.

 

What’s funny is that often in our business when we don’t have the cash-flow we need, our immediate response is to reconsider a transfusion rather than examining the open wound. So are your money problems because of poor marketing or do you need to re-evaluate your expenses? 
Here are a few “leaks” to verify:

  1. Labor – Do you have a staffing model that ties labor hours to production/revenue? How often are your staff going into over-time? Are you leveraging your own efforts by delegating properly?
  2. COGS – Do you know exactly how much of your raw materials go into your product? For restaurants this means portion control and strict recipes. For a  contractor this means knowing how much material will be scrapped and how much of it you can “up-cycle“.
  3. Taxes – When was the last time you had a CPA check your taxes and not just prepare them? If your CPA or tax preparer is only preparing your reports and returns and not suggesting tax savings, I can get you in contact with one who does.

When I am evaluating a client – these are the first places I look for leaks.