Thursday, September 25, 2014

How did E&S Entrepreneur Advisors come to be?

I was reading another blog recently tying to get ideas for this blog.  Any of you who write a blog know that the hardest part is finding fresh ideas!  This blogger recommended telling your story as a source of content so here we go!

Beth and I have been friends since 2000 when our sons became friends in kindergarten.  Those little boys are now sophomores in college and are still best friends.  As the years passed, we realized that we had more than the boys in common and found ourselves picking each others brains for solutions to our individual client issues.  While we were both small business accounting consultants, our backgrounds were different so we had different skill sets.

Beth has a finance degree from Notre Dame and has worked as a corporate financial analyst for several Fortune 500 companies as well as an operations manager for Kimberly Clark.  I worked for a public accounting firm doing audits as well as income taxes and then worked as an internal auditor for a bank holding company.

We both took some time off to raise our kids and when it was time to go back to work full time, we didn't want the restrictions of corporate life.  We both had been doing some consulting part-time and saw the need for someone to help the small businesses in our area with managing their business.  We do not prepare income taxes because neither of us wanted to and there are plenty of quality tax accountants in the area.  We do help with employees, payroll taxes, sales taxes and all thing accounting other than income taxes.  We write business plans, help secure the funding and help the new owner navigate the start-up.

This is how E&S Entrepreneur Advisors came to be.  We still enjoy working together and working with our clients.

Wednesday, September 10, 2014

How do you increase revenue for your small business?

You have been reading about how to improve your small business by working on it instead of in it so you are setting goals for next year.  Great-make sure they are specific enough to guide you properly.  You decide to improve your business by increasing sales by $100,000.  That is specific enough, so the next question is how are you going to do this?

You can increase sales by increasing the price of the products or services you sell or you can do it by increasing the number you sell or a combination of both.  If you are going to do it by selling more, you need to know how many you need to sell to achieve the $100,000 increase you are seeking.  How do you achieve that?

To know how many you need to sell, you need to know how what your average sale is: how much does your average customer purchase from you?  Once you determine how many sales you need to achieve the revenue growth you desire, you need to know how many proposals you need to provide to achieve the sales you need.  If proposals aren't relevant to your business, you need to know how many people need to come into the store before one buys from you.  We call this your close rate as no business sells to every person they meet or who come into the store.

So to improve the profitability of your small business, set a specific goal and determine how you will achieve this goal.  If you follow the process described above, you can tell your friends and family you are tracking metrics and using goal setting to improve your bottom line.  Sounds impressive, doesn't it?  All you had to do is track some numbers and make some calculations-not that complicated!

Wednesday, September 3, 2014

Start your tax planning now!

As summer comes to a close and we head into September it is time to begin the year end tax preparations. September 15 is the deadline for the 3rd quarter estimated taxes. This is a good time to take a look at how your business is doing so far and how you expect it to do through the end of the year. I like to compare this year’s results versus last year’s results as well as versus our forecast for this year.

Once you have done the analysis for your own business purposes, it is a good idea to meet with your tax accountant, especially if your results are significantly different from the prior year and from forecast. You may need to adjust your third and fourth quarter estimated tax payments. You will want to make sure that you are taking advantage of any tax breaks available to you. You will also want to make sure that you are aware of any changes in tax laws that relate to you.

Often we see owners of S-Corps, particularly in the first year of the S-Corp, have not had enough withholding from payroll and will need to run a special “bonus” payroll with the bulk of the bonus going to taxes. Most of my clients would prefer to adjust their payroll for the last 4 months of the year instead of being surprised with this December 31 “bonus”. From the tax accountant perspective they prevent having additional fees and penalties, but from a business cash flow perspective this can be a cash flow problem that you were not expecting.

Don’t sit back and wait for the tax accountant to make suggestions to you. Take a proactive role and ask for their advice and suggestions.