Small Business Profit Explosion

Client Questions - Can I Deduct My Spoiled Inventory?

Question: A florist called our office this week asking if she can deduct the cost of flowers that didn’t sell over Valentine. I get this question often from restaurant owners also.

Answer: Since flowers and food have a short shelve life, it is very rarely held in inventory. Normally the business owner deducts the cost of the flowers or food when they are purchased. Accordingly, they cannot be deducted again when they are thrown out.

Larger retailers, wholesalers or manufacturers who have an inventory on their tax return will get a deduction when they write items of inventory off as worthless.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

What Would You Tell a Family With This Household Budget?

How would you counsel a family with the following household budget?

                Annual Income                                                                 $ 24,700

                Annual spending                                                              $ 37,900

                New credit card debt for the past year                          $ 13,300

                Existing credit card debt                                                  $ 153,500

                Recent spending cuts                                                     $ 385

You would probably tell them that they are close to bankruptcy. You would also probably tell them that they have to cut spending. Not just by the pretend amount of recent cuts they have made; but, with really, deep, meaningful cuts!        

Well this is every family’s share of the national budget and the national debt! (From a recent John Stossel Show.)

So, what will you be telling the politicians in this November’s election about our countries budget situation? Should they continue with more of the same and bankrupt the country or rein in our out-of-control spending now.

Better choose wisely! Your family’s future financial well being depends upon you making the right choice now!

(Start by educating yourself with a past blog – The Federal Deficit is Increasing by $237,823 per Minute! What Does That Mean to the Small Business Owner? (Link http://bit.ly/yRgdYs )

 

10 Surefire Ways to Make More Money and Keep it in the Bank!

Go to www.myprofitguru.com to listen to our free webinar that will show you the following 10 Surefire ways to make more money and keep it in the bank. This one hour webinar is jam packed with information that I have used over the last thirty plus years to help business owners increase their profits.

The following are the items I cover that I know can help you double or triple your profits this year:

1. See what the crowd is doing and do the opposite.
2. Focus your time on the work that increases profits, sales and cash flow.
3. Manage & improve every step of the sales cycle.
4. Increase sales to current customers.
5. Create a marketing system to get the big customer.
6. Speedup and improve all areas of the business transaction cycle.
7. Understanding & utilizing the most important rule of business.
8. Using 5 critical accounting numbers to increase profits, sales & cash flow.
9. Never totally trust your bookkeeper.
10. Be a lifetime learner.

At www.myprofitguru.com you will also receive a list with all legal business tax deductions (So you don’t ever miss a legal deduction again!), 65 tax cutting tips and a list of QuickBooks keyboard shortcuts.

Please let me know what you think of this free webinar.

Thank you for your continued support and let’s make this year our most profitable year ever!

 

Marketing Tip of the Week – You Are Your #1 Salesperson!

I’m constantly telling business owners they need to be out on the field selling. The reason being, that they are the number one sales person!

You are the person that knows your business the best. You’re the one with the experience and know your business’s strengths and limitations.  On top of that, customers know when they are dealing with someone who knows what they are talking about.  Once you have gained the customer’s trust, you’re almost always guaranteed to close the sale.

You went into business because you have a skill, product and/or service that you know the in’s and out’s. You also know that you provide a better value to your customers than your competitors. You have also taken the initiative in starting your business and have made sales! Now that you have grown your business, you have backed away from making sales, losing the best resource both for customer satisfaction and employee’s role model.  I have seen this time and time again.

There is no reason for you to be stuck behind a desk! Get out there and make contact with your current and prospective customers and make that sale! Your bottom line will reflect you!

 

Client Questions - Can I Deduct an Invoice that My Customer Refuses to Pay?

Question: Can I deduct an invoice that my customer refuses to pay?

Answer: Like many tax questions, the answer is maybe.

It all depends on when your company records income. A company can choose between recording the sale at the date of the invoice (on the accrual basis) or when the invoice is paid (on the cash basis).

If the company is on the accrual basis then the bad invoice can be deducted.

But, if the company uses the cash method of recognizing income, then you cannot deduct the bad debt since you never recorded the income. You will, of course, be able to deduct any material or labor that you used on the job.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

Lessons Learned – Is it the business owners job to keep the trains running?

The myth most business owners believe: I must be the one to make sure the trains keep running.

Why this myth causes a problem: In order to get more customers, it is my responsibility to make sure that my product/service is delivered correctly and on time.

The truth successful business owners learn the hard way! As a business grows, sooner or later the time needed to run a business eliminates all time to develop long-term strategies and new products or services designed.

And, if you’re not looking for new ways to develop solutions to your customers’ problems and pains you are allowing an opening for your competitors to solve these problems for them.

Also, as Seth Godin said in one of his recent blog articles, “Yes, without trains running, it’s hard to get anywhere. But no, that’s not what the shareholders are hoping you’ll be doing every day.” (I highly recommend that you read his blog daily www.sethgodin.typepad.com ).

Lesson learned: As a business owner, you must not get so stuck in the details of running the business that you no longer have the time do the vital work of delivering solutions to your customers to their problems. 

 

Tax Tip of the Week: Retirement pay for owner doesn’t reduce SE tax

The tax court ruled that retirement payments made by self-employed business owners for themselves cannot be claimed as a deduction on Schedule C in order to reduce self employment tax (the business owners’ Social Security and Medicare).

It is deducted from adjusted gross income on form 1040 in order to regular reduce income taxes.

Contributions for the business owner’s employees and the costs of running the plan may be deducted on the Schedule C and will reduce both income & self-employment taxes. 

                               

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

Tax Tip of the Week: New tax return 1099 filing question poses danger to taxpayers and preparers

Two new questions on tax returns for businesses are giving tax preparers fits and exposing taxpayers to potentially large penalties.

The IRS wants to know if self-employed, farmers, landlords, partnerships, regular corporations and S firms made payments that must be reported on 1099s.

If so, they must also check a box stating whether they filed or will file all 1099s.

Preparers of their returns fear they’ll have to act as IRS agents to be sure their clients followed the information reporting rules. And they worry that the IRS will hit them with a preparer penalty if it turns out that clients messed up the 1099 filing rules.

Filing tip: The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 repealed the 1099 rules for landlords. Since 1099 requirement never went into effect, the question on Schedule E of whether landlords made any payments that required the filing of form 1099’s should be answered “no”.

                                                               

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

 

Marketing Tip of the Week – How Are We Doing?

Conducting surveys to evaluate your company’s image is always good idea. Finding out what customers think of your products, services, staff, and facility(s) is a part of running a successful business.

Getting your customers’ feedback is essential in improving your business. Who better than your customers to tell you if you need to change something? You can also discover what your customers’ value. You may find out it is different than what you think is important.

Most of the time managers and owners only hear of the bad instances that occur in the business. Conducting a survey allows you to gain information about the positive aspects as well.

You can make the survey as detailed or as simple as you like. Include questions that you want to know about. I always suggest including a few open ended questions like: What did you purchase on your last visit? Would you like us to offer any other products or services? These types of questions will help you make more money and learn more about what drive your customers to make a purchase.

Offer a free gift or coupons to your customers for taking the time to fill out your survey. You can conduct these surveys at your business, through email or even mail them to their house. The cost of conducting the survey will surely be worth it once you get your customers feedback.

Take the step in improving your business. Create your survey today!

 

Marketing Tip of the Week – What is Good Marketing?

The other day someone asked me, “What is good marketing?”  I thought that is a really good question and it can be answered in many different ways.

Many people may say good marketing is anything that gets people in the doors. That’s true to some extent but there is more to just getting people to your door, it’s also getting them to buy. Getting them to buy is the hardest part of marketing.

In my opinion, that’s just one of the elements of good marketing.

I think good marketing starts with a plan. The plan should at least consist of:

• a list of all of your products and services
• a list of possible add-on and cross selling products
• a description of each with a summary of what type of customer will need them
• what makes your business different
• how will you get your uniqueness across
• a thought-out and realistic budget
• a target market  
• a description of how you plan on getting their attention
• a filled out promotions calendar  
• a training calendar
• a plan of attack

Once your plan is done, good marketing has to start. A plan is nothing if it’s not implemented!

And the last part to good marketing is, keeping it going. Don’t get side tracked. Marketing isn’t something that happens overnight, it will take time.

I hope this gives you a good starting point in creating your own good marketing.