Administrator

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Starting Over When Your Business Fails

Sometimes the numbers just don’t work out. Every so often economic forces line up and work against you. Occasionally life happens and that perfect string of health you’ve had gets interrupted by a few weeks/months of illness. The point is this; sometimes even with the best planning, your new business can fail. It hurts. It stings. It can even leave you evaluating your intelligence and self worth. But we’re here to tell you something; you can start over IF you can muster the courage to try again.

We’ve all heard that Benjamin Franklin failed numerous times before he finally “discovered” electricity. While we hope you don’t have numerous failures as you attempt to start your dream business, we can say that you sometimes have to try more than once to achieve success. So if you’ve had some setback(s) in round one, here are some tips on making round two better:

Have a short pity party and then move on. The one thing that leads to achieving your goals in this world is action. Feeling sorry for yourself is acceptable, but you can’t let it get in the way of you moving forward. In sports, athletes are usually allowed a brief moment to reflect on a loss and then they must move on. One water bottle. One time out. One down. You get the point. So for the “failed” entrepreneur you get a brief minute to feel sorry for yourself. Once that minute is up, no more looking back okay? Simply focus on doing what it takes for you to become a “successful” entrepreneur.

Figure out what went wrong. In the financial analysis world we often get to “geek out” on all the information at our disposal. This is good in that it provides a ton of insight into how a business operates and intersects different points. It can be bad if you let it lead to paralysis by analysis and never work to either 1) start your business or 2) truly address what is going wrong. So if your first attempt didn’t go as planned, we recommend talking a look at where it went off the tracks. Didn’t keep financials? Please make sure you do this second time around. But if you did, try and pinpoint what the downfall was (e.g. lack of adequate marketing, poor ordering habits, low pricing, etc) and make sure it doesn’t happen again.

Seek outside advice on what could be changed. When you create a company you are supposed to elect a board. Even if you are a company of me, myself and I, you should put together a panel of advisors that you can turn to for advice. These people, hopefully some who are familiar with your industry, can help guide you through some of those pitfalls and perils of starting up a company. Don’t have access to a board? Then put together a talented team of professionals (e.g. accountant, attorney, consultant) who can look at what is going on and give you recommendations. Hey, the advice of a GOOD professional is often worth their invoice a thousand times over in the long run.

Put together a new/realistic plan on how to start again. So once you’ve received the advice on what can be improved, you should sit down and create your plan for the next venture. Take a look at the original business plan you had and compare that to what actually happened. Look for gaps and figure out how to address them. For example, if you thought spending $4,500 in marketing a month would get you 100 new customers each month, but it only got you 65, then make sure you adjust your sales forecast in your new plan. The point is to make sure that your new plan is as closely aligned to reality as possible. This will then allow you to see if your new venture stands a chance at success AND when you should expect to see the signs that things are working.

Get going – this is the key to any failure. If at first you don’t succeed, try, try again. Okay. So you’ve figured out what went wrong, got some advice on what should/could be changed and have dusted your ego off. So now what? Get back out there and try again! We all can relate to being a kid and falling off our bike. What was the recommendation? Get back on as soon as possible; the longer you wait the more gun-shy you’ll become. The same goes for a failed venture. Once you’ve got yourself in a position to do it again, go ahead and pull the trigger. Delaying the date you start only delays how fast you get to success.

By Administrator|2013-08-23T12:48:14-06:00August 23, 2013|Categories: Business Talk|Tags: business failure, does a business need a board?, failing as an entreprenuer, how to fix a failing business, starting over as an entrepreneur, starting over when your business fails|Comments Off

Guaranteed Installment Agreements

Whenever you see tax resolution firms advertise, you’ll usually see a qualifier in their ad that says something to the effect of, “If you owe the IRS at least $10,000, then give us a call.” The reason for this is that if you owe the IRS less than $10,000, there is a provision in the tax code that REQUIRES them to accept your proposal to pay them in monthly installments if you meet certain requirements. In fact, you don’t even need to provide them with financial statements to qualify.

To qualify for a guaranteed installment agreement, you must:

Owe only income tax, not any other types of tax.
Have properly filed and paid all tax returns during the 5 years prior to accumulating the tax debt.
Not be able to pay the tax immediately out of savings or other means.
Pay the tax fully within 3 years (e.g., the payment plan cannot exceed 36 months).
File and pay all tax returns on time during the period of the installment agreement.
Not have had an active installment agreement during the past five years.
Owe less than $10,000 in TAX, not including penalties and interest.

Another beautiful thing about guaranteed installment agreements is that the normal legal minimum monthly payment of $25 per month does not apply. Yes, you can actually offer payments of $10 per month, and as long as that will fully pay the debt within 36 months, they have to grant you the request!

Lastly, guaranteed installment agreements can be granted by the lowest level collections employees of the IRS without managerial approval. All you have to do is make one phone call to the Automated Collection System (ACS), wait on hold for an hour, talk to a human for 10 minutes, and you’re DONE. If you’re not sure where to call, dial the number in the upper right hand corner of the notices you’ve been receiving and you’ll more than likely be connected to ACS. If you don’t want to talk to anyone, you might be able to do it online.

Do keep in mind, however, that penalties and interest continue to accrue during these – and all other – Installment Agreements, although they are guaranteed by law. Because of this, you may decide it is in your best interest to fully pay any balances due as soon as you possibly can.

By Administrator|2013-08-19T12:17:10-06:00August 19, 2013|Categories: IRS Talk|Tags: apply for IRS installment agreement online, IRS guaranteed installment agreements, IRS installment agreement, Owe $10K in tax debt, requirements for IRS installment agreement|Comments Off

Mining Your Businesses Acres of Diamonds

During the first few years in business entrepreneurs are typically in build mode. They are constantly scrambling to find new customers, prospects and events they can attend; anything they can do to bring in some money. But after a few months/years something funny starts to happen – customers start to seek you out. This can lead to an entrepreneur losing their “hustle” mentality, which if left unchecked, can lead to a possible stagnation or decline in new business. The solution? Mining your acres of diamonds.

A while back one of our colleagues recanted the “Acres of Diamonds” story to us. Acres of Diamonds originated as a speech which Russell Conwell is said to have been delivered over 6,000 times around the world. It was first published in 1890 by the John Y. Huber Company of Philadelphia. The central idea of the work is that one need not look elsewhere for opportunity, achievement, or fortune – the resources to achieve all good things are present in one’s own community.

This theme is developed by an introductory anecdote, told to Conwell by an Arab guideabout a man who wanted to find diamonds so badly that he sold his property and went off in futile search for them. The purchaser of his home discovered that a rich diamond mine was located right there on the property. Conwell elaborates on the theme through examples of success, genius, service, or other virtues involving ordinary Americans contemporary to his audience. The overarching advice is “dig in your own backyard!”

If you are a business that has lasted 2-5 years and you are wondering what you can do to continue your growth trajectory, here are some tips on how to dig in your own backyard:

Pay attention to your customers. Often times a company will struggle when they start to take their eyes off what their customer wants. To combat this, make sure that you track what matters to them and engage them on a regular basis. This is as simple as sending out a customer satisfaction survey periodically and having a social media presence on platforms such as Twitter and Facebook. By engaging with your customers regularly, you can adjust your services and offerings to address what is important to them. If done correctly, you’ll wind up with a complimentary advertisement system/sales force via the referrals they send you.

Track your marketing. We do tons of marketing efforts each year. One of the questions we often ask a prospective or new client shortly after they contact us is “how did you hear about us?” This gives us some insight into which marketing initiatives are bringing us business and which might need to be adjusted or scrapped. Once you know what is working, increase your spending in that area and you should see your sales escalate over time.

Always look for ways to recapture lost customers. Just because a customer left you for a competitor doesn’t mean that they didn’t like what you had to offer. Sometimes customers leave because of price, convenience or just simply because someone touted an offer that just sounded better than yours. However, some customers find that the grass isn’t greener on the other side, but it’s sometimes hard to return to your former provider without feeling embarrassed. Thus, if you send out advertising to your old customers offering them a discount or telling them to give you another chance, they might just do so. Sometimes all it takes is you making them feel welcome for them to come back home.

Remind your customers that you are ALWAYS there for them. People often only think of you when they have a need, especially in service businesses such as ours. If your business is seasonal in nature, your customers might only think of you once a year! Needless to say, that’s not good for your business or your bottom line. One way we tackle this is through a customer touch program. The essence of this program is to send out a series of customer communications that are designed to engage with them. These can range from tweets, to Facebook posts, to blog posts, to monthly newsletters to a simple customer phone call. The goal of each interaction isn’t sales oriented (per se) but more so to remind your customers that you are 1) thinking of them, 2) there to service their needs and 3) remind them of what you offer. Point three is pretty important, especially when you add new services to your menu.

By Administrator|2013-08-06T11:53:23-06:00August 6, 2013|Categories: Business Talk|Tags: Acres of Diamonds, customer satisfaction survey, Customer Touch Points, Growing Your Business, How to grow an established business, how to grow your business|Comments Off

Appeals Division: Your Best Friend At The IRS (Possibly)

Last week we negotiated a client’s back taxes into an IRS status referred to as Currently Not Collectible (CNC). The conversation went rather smoothly as we had all the necessary paperwork and we worked with a representative who was fairly amicable. But what happens when your experience isn’t so pleasant or doesn’t go in your favor? Fortunately for many people with a tax debt, the IRS has an administrative Appeals Division (Appeals) to which most collections actions taken by the agency can be appealed.

Appeals is one of the IRS’ best kept secrets. Why? In our experience, Appeals personnel appear to be under less pressure to collect tax revenue than Revenue Officers. This is likely due to different criteria for personnel reviews. In addition, Appeals personnel are simply more pleasant to deal with in general, usually lacking the snappy attitude and air of arrogance that is unfortunately common amongst Revenue Officers.

So what is the primary purpose of Appeals? Well, their functional mandate from on high is, effectively, to prevent cases from going to court (thus saving the government the expense of litigation). This is done by offering a “fresh look” at situations that have already had some interaction with the IRS at another level. Appeals, however, is still an administrative function and is not a court in any way itself.

Appeals works in a very formulaic manner, just like any other IRS division. When you file any sort of IRS appeal, you’ll receive a letter notifying you that your case has been assigned to a Settlement Officer (SO). Sometimes, this first letter will include your hearing date but sometimes it won’t.

The initial contact from appeals via mail will usually include a request for financial documentation, if this information wasn’t already in your file when it was passed to Appeals from Collections. If your Appeal in any way mentions a “resolution alternative” (such as an Installment Agreement, CNC, or Offer in Compromise) then you will be requested to provide the financial documentation necessary to reach that resolution alternative.

Many different types of Collection actions taken against you can be appealed. Aggressive collections actions such as bank account levies and wage garnishments are commonly appealed, but so are proposed garnishment actions, and even denials of payment plans. If the IRS takes any adverse action against you, make sure to carefully review the notices they send you, which will always explain your appeals rights. If you need assistance protecting your legal right to an appeal, such an action by the IRS, be sure to contact a tax professional experienced in representing taxpayers with such tax issues.

Until next time…

By Administrator|2013-07-29T12:15:29-06:00July 29, 2013|Categories: IRS Talk|Tags: Appealing IRS Audit, Appealing IRS decision, Appealing IRS Penalties, Appeals Division, IRS Appeals, IRS Settlement Officer|Comments Off

Reducing IRS Penalties

Often times when someone owes taxes that they haven’t paid for a few years, they are surprised when they find out how much the IRS says they owe. This is because the IRS inevitably tacks on several of the dozens of penalties they are allowed to charge. However it’s the late filing, the late payment and the penalty for not making Federal Tax Deposits (when combined) that can add a whopping 65% to your total IRS bill. The good news is that if your tax debt is more than two years old, you’ve maxed out all these penalties.

The IRS does actually have a compassionate side, and it’s typically found in the penalty abatement process. It’s also noteworthy that penalty abatement applications can also be appealed if initially denied. Thus, you can always get a second set of eyeballs on the issue if it initially doesn’t go your way. The thing to keep in mind is that the IRS has very strict guidelines for granting penalty abatements, and these guidelines are referred to as “reasonable cause criteria.” It should be noted up front that “we didn’t have the money” is NOT a reasonable cause criteria. Why is this? Here is the IRS’ logic: when you made the money you should have either paid the taxes at that time (e.g. payroll taxes for a business) or saved the money until it was due (e.g. individual taxpayer who gets a 1099 the next year).

For example, if you are self-employed and receive a check, then you HAD the money, you simply didn’t give the IRS their chunk of it. Same goes with payroll taxes, particularly trust fund taxes (money you withhold from employee paychecks for income tax and Medicare/Social Security). If you had the expectation to pay some amount of wage, then you theoretically HAD the money sitting somewhere to pay that person, and should have withheld it and turned it over to the IRS. If you couldn’t cover the taxes, you shouldn’t have had the employee and should have laid people off or cut back their hours.

There are ways to argue around this, and we have done so very successfully, but there has to be some other circumstance involved. For example, you had the money to pay the tax, but paying the tax instead of something else would have created an “undue hardship.” Examples could include a large medical expense that unpaid would have left a condition untreated, or a court ordered payment that would have resulted in other legal consequences, or a bill such as a large automobile repair which would have left you unable to work and resulted in job loss. These arguments are difficult to make and require significantly more work than standard reasonable cause criteria applications, but they CAN be won.

The primary IRS penalty abatement reasonable cause criteria center on natural disasters, loss or destruction of vital business records, bad advice from the IRS or an accounting professional, criminal activity, medical issues, substance abuse problems, and other serious circumstances. Thus, you are more likely to have your penalties abated if the circumstances fall into one of these areas:

Were any business records lost or destroyed?
Were there any circumstances that led to a substantial drop in collecting on accounts receivable?
Was there any transition in the business that lead to the failure to pay taxes?
Was there a death or serious illness that directly affected the business or personal wages?
Was there any embezzlement of funds, theft of valuable property, or identity theft?
Were there any alcohol or drug abuse issues that affected the business or wage earning capability?
Was there a natural disaster that impacted you or your business?
Did you rely on the advice of a CPA or IRS employee in making tax decisions?
Were there any circumstances that created substantial financial hardship, to the point where your business was close to going bankrupt?

The above questions cover all of the IRS reasonable cause criteria to one extent or another, so finding an answer to your personal or business situation that covers one or more of these questions is the key to a successful penalty abatement application. If you are facing penalties related to back taxes and believe your situation falls into the above, give us a call at 773.239.8850 and we’d be happy to help you.

Until next time…

By Administrator|2013-07-23T12:15:04-06:00July 23, 2013|Categories: IRS Talk|Tags: how to reduce IRS penalties, IRS reasonable cause, penalty abatement, removing irs penalties|Comments Off

IRS Offer in Compromise Requirements

By now, you’ve undoubtedly heard the radio commercials: “Settle your tax debt for pennies on the dollar…”

What these ads are referencing is an IRS program called an Offer in Compromise or OIC. This program does allow you to pay a reduced amount of money as full settlement of your entire tax liability, including penalties and interest. However, it’s not as simple as the commercials make it sound.

Most of those commercials will make one think that you simply take your tax debt, multiply it by some percentage and then you just pay them that amount and walk away. Unfortunately, that is not how it works.

Part of determining whether you are even eligible to apply for an OIC has to do with the formula used to decide how much you will need to pay. The formula is somewhat complicated, but an overly simplified version of it looks something like this:

Add up the value of everything you own: House, cars, furniture, jewelry, undergarments, stocks, bonds, cash, retirement accounts, tools, goats, art….EVERYTHING. Call this number “A” – it represents the value of your assets.
Subtract your allowable expenses (the IRS won’t let you claim all actual expenses) from your total income. Call this number “B” – it represents yours remaining income (this is what the IRS calls it – not your disposable income, which is probably less).
Multiply “B” times either 12 or 24, depending on how long you’re going to take to pay off the Offer in Compromise. Call this new number “C”.
A + C = Z, where Z is the amount of money you can settle your tax liability for.

Here’s the kicker: If “Z” is more than what you owe the IRS, then you’re not eligible for the program. The result? You’re probably going to end up paying monthly payments on an Installment Agreement.

In addition to this formula, there are some other conditions for OIC applicants:

You must file all missing tax returns.
You must keep your nose clean with the IRS for 5 full years, otherwise they will re-bill you for everything they forgave.
You must make the OIC payments on time.
You must pay an application fee, unless you meet the low income guidelines.
If you end up being owed a refund on next year’s tax return, the IRS is going to keep that refund money.

The real problem for most people with the Offer in Compromise application process has to do with the part where they multiply your remaining monthly income by 12 or 24. If you have $1,000 per month left over, and are going to take a year to pay off the Offer in Compromise, then you multiply by 24 to get to $24,000. Well, if you also have $20,000 equity in your home, and no other assets, then your Offer amount is $44,000. If you owe the IRS $35,000, you’re not eligible for the Offer in Compromise program.

It’s worth noting that, in March 2012, the IRS changed some of the Offer in Compromise rules. The single biggest thing they did was to REDUCE that multiplier — it used to be 48 or 60. For taxpayers with no assets, this change effectively reduced the necessary offer amount by up to 75% — making potentially hundreds of thousands of people eligible for the program that didn’t used to be.

HOWEVER….the IRS can change this back at any time. If you are even thinking about applying for an OIC do it now! Feel free to call our office at 773.239.8850 and we’d be happy to help you get started.

By Administrator|2013-07-17T12:05:25-06:00July 17, 2013|Categories: IRS Talk|Tags: IRS Offer In Compromise, offer in compromise formula, offer in compromise requirements, OIC, settling taxes for less than you owe, settling taxes for pennies on the dollar|Comments Off

Get ready to eat a lot of this stuff!

So there you are. You’ve read all the articles, books and talked to tons of people about what it’s like to start a business. Now you’re at the point where you’re actually ready to begin taking action on your dream . If you’re like me, when you began this journey you probably thought “I know it will be hard, but will it really be as bad as all the stories I’ve heard?” Today’s post will attempt to give you the “real” on what you are in store for. I won’t sugar coat it, dilute it or spin it in any way. So if you’re ready to take the ride of your life, strap yourself in!

The truth of the matter is that no matter how smart you are, the amount of preparation, the industry or the product, this process will push you into places you only dare dream about. Some places are joyous in that they help you learn and further your development in ways you didn’t think were possible. Other places are like that scary labyrinth of your dreams where demons roam and you pray that someone will save you. With that being said, here are my 5 pearls of wisdom for taking this journey AND making it to the other side in one piece.

Develop a comprehensive plan. The first step of any trip is to plan it out. Going on a road trip? Better consult a map so you at least have an idea of where you are going. In the months leading up to us opening up our retail location, I was reading any and everything I could about what to expect. One of my particular favorites was What No One Ever Tells You about Starting Your Own Business by Jan Norman.

Once you’ve prepped your mind for what you are about to go through (i.e. a lot of sacrifice) then you need to run the numbers. I suggest looking at what it will cost to get you started, what you anticipate generating/spending for the next 3-5 years and what you will need to meet your living needs. It’s also a good idea to run a best, likely and worst case scenario. I would also recommend cutting your worst case scenario in half when you are done. Why? Just so you can see how bad it may get if things really don’t go to plan. Remember, you are trying to prepare for a fight that may just go a round or two longer than you want it to.

Have an extensive support system. Starting a business is unlike anything you’ve probably trained for in the past. It’s not like going to a new job and having to learn a new system, culture or people. It’s more like being dropped off in another country and having no clue how anything works. To that end, it’s a journey that most people can’t relate to and won’t be able to help you through. So the first layer of this pearl is to find some mentors who’ve tread this path before you did. They may be business owners or professionals (lawyers, accountants, consultants) who can relate to the journey AND give you actionable advice.

The second layer is to make sure you have a solid financial plan developed. This includes anywhere between 6 months and 2 years of savings and a plan on how you will make it through the lean times in your personal financial world. Personally, since our business is seasonal, I have a contract job (i.e. a short job that doesn’t extend past 6 months) that provides me with income in the off season. 50% of the startup battle is just surviving the lean years, but success can come if you can keep the business and your personal obligations afloat until you reach critical mass.

The last layer in this pearl is to treat your family right. They can be the key for those of us who decide they want to start a company later in life once you have kids and the like. So make sure you thank them often for their support, never take your work frustrations out on them and when you have some “free” time/money make sure you give them a significant piece of it.

Prepare to make a LOT of sacrifices. I often joke when people say “wow, you’re the CEO of your own company.” I typically respond with “yeah, I’m the Chief Everything Officer!” When you run a small business or a start up, you are responsible for practically everything. It doesn’t happen without you and YOU are responsible for making everything happen (even if you have a team). As a consequence, plan to spend a lot of time making those things happen.

In addition to sacrificing your time, plan to pull those purse strings tight for a while. This will be especially uncomfortable for those who left a “cushy corporate job” prior to going it alone. I can’t tell you how many things that I use to do without thinking that I now only contemplate every blue moon. Want to go out for lunch? Yeah, better be a special occasion like the day after tax season or the start of contract work. Other than that, I’ve kind of gotten use to the taste of those Raman Noodles in the picture above!

The last thing that will probably need some adjustment will be your hobbies. I use to hit the weight room, go swimming, race my bike, ride my motorcycle, etc. Well, let’s just say that I cut back most of my hobbies to those that don’t take too much time or money.

Be flexible but ensure you are committed. Nothing that you do when you start a business goes according to plan. Thus the key to success lies in being flexible but at the same time committed to the long haul. You can make adjustments to the direction you are headed, but you shouldn’t go in a different direction UNLESS your initial concept was just way off. Now what do I mean when I say committed? I mean you have to want this 100%, with every fiber of your being, more than you love life itself. This is a very long, dark and lonely path and the light at the end of it can sometimes seem as if it is getting dimmer versus brighter. But your commitment to making it happen (even in the darkest hours) is often what can get you to the next critical occurrence of your journey. So in short, if you aren’t willing to go “all in” so to speak, sit on the sidelines.

Constantly evaluate and course correct. One of the things I see new entrepreneurs struggle with is making adjustments when faced with challenges. In sailing, when your destination and the wind are both head on, you have to use a technique called tacking to make it to your ultimate location. In short, tacking is a series of zig-zag movements that continue to catch the wind while moving your forward. For a business person, this often means paying attention to the numbers, tracking what is working and then adjusting what isn’t. Corrections ensure that you give your customers what they need and that you do what you need to so that your business survives.

Even though we started this company back in 2005, taking the step to head it up full time back in 2012 was like going back to square one. In addition to that, opening our first retail location was a scary endeavor. But I am here to tell you, if you can commit to doing the above, the trip is well worth the agony and preparation. While starting your business is often nerve racking and challenging, it is also highly rewarding. At the end of the day, I know that my efforts really impacted someone’s life. At closing time I can stand on the street, look at our office, and take satisfaction knowing that I am creating something that will hopefully be around in the future (just like these guys).

1st Walgreens Drug Store

I can’t say that I felt the above on a daily basis when I was working in corporate. However now I can’t envision living my life in any other way. So if you are just starting the action phase of your journey know this; it’s rough out here, but you can make it. Just take your time, prepare as outlined above and make sure you have a little faith.

Until next time…

Common misconceptions when setting up a business (theformationscompany.com)
15 Questions with the CEO – Ogochukwu Agu of “Beddings’n’Beyond” (whootafrica.com)

By Administrator|2020-09-21T12:36:21-06:00July 14, 2013|Categories: Who's The Boss?|Tags: do you have what it takes to be a CEO, do you have what it takes to start a business, Entrepreneur, Self-employment, Start Up, Startup company|Comments Off

Why I’m Not Your “Typical” Accountant

When you tell people that you are an accountant, the image that pops in their head often looks like the one above. Some older gentleman wearing a pressed white shirt, spectacles, a green visor sitting under some intense light immersed in calculation. All of the above hint at an individual who, while quite intelligent and diligent about their work, is probably not viewed as the life of the party. But why is this the image that comes to mind? Where is the social accountant? Where is the person who likes to go rock climbing on the weekends? Where are the real men and women who represent the accounting profession?

Ready to hit the zip line!

Truth be told, the image classically associated with accounting professionals is actually just stereotypical. Now what do I mean by that? Well, a stereotype is a thought that may be adopted about specific types of individuals or certain ways of doing things, but that belief may or may not accurately reflect reality. The reason this image has persisted so long is largely based on historical grounds. However, the reality of the current accounting profession is that most people have “another side” to them which isn’t reflected when they are with clients and colleagues. The same would be true for me as well.

In this post I talked a lot about how I got into the profession (which was kind of by accident) as well as some of the things I like to do in my spare time. But what I wanted to focus on today is the why behind why I don’t fit the mold so to speak.

I’ve always had a business mind. Back in my younger days, I use to do yard work for our neighbors. They had a pretty big house and converted much of their yard space into gardens. The one in front was full of flowers and the one in back had vegetables and other plants. One day I was working with the owner’s wife and she asked me what I wanted to be when I “grew up.” Without hesitation I spouted off something to the effect of I wouldn’t mind owning a landscaping business, a car wash, a towing company, etc. Why I didn’t mention going to college still escapes me, but apparently I was focused on starting something.

TSU class ring day with Pres. Jack Magruder

If you fast-forward to my time in college and graduate school, one trend always tended to emerge. While I was good at my accounting classes, I almost always did better in my business classes. Whether it was business strategy, economics or investment theory, I simply was always able to grasp the concepts and meld them with the associated financial impact. What this means is that I not only understood the accounting side of the transaction, I also got how it related to the business. Thus, over the course of my 13 years in Corporate America, I ended up moving more towards the business side of the financial house (e.g. Sr. Financial Analyst, Manager or Financial Planning & Analysis) and farther away from the accounting side.

Most “typical” accountants get business in general, but sometimes get too entrenched in making sure all the numbers tick and tie. While this is part of making sure your financials are solid, it’s not what most business owners are looking for. Many want someone to give them insights on what they see; not simply regurgitate what happened last month. They also want someone who understands all the business functions and knows why marketing spends so much money (i.e. because sales don’t happen without it and no sales means no bookkeeper/accountant). I was fortunate enough to work on cross functional teams in my corporate days thus I get how the puzzle fits together. Unfortunately, not all financial professionals do.

I steal from the best and forget the rest. What I mean by this is that when it comes to business, I look for what works and discard what doesn’t. The key with this (for me) is that it doesn’t make a difference what industry the concept is used in, so long as it’s the best one.

For example, in the insurance industry it is known that you must manage the customer relationship if you want to be successful. I mean, what’s the difference between one insurance provider and another? Not much to the untrained eye. But what will keep you with your agent given that everything else is equal across all providers? The way that they treat you when then deliver service and how they engage with you when they aren’t. This is why you get a birthday card, a calendar for your refrigerator and those monthly newsletters each year. All of the proceeding are ways to keep you feeling as if your agent cares about you AND keep them top of mind whenever someone asks you “do you know a good insurance agent?”

So what does that have to do with me? All of the above are marketing tools adapted from another industry and applied to our practice to help us keep our clients engaged. Do they work? I like to think so as we have a pretty high client retention ratio. But what’s different about this is that not all accountants conduct their marketing in this manner. Some think that advertising in the yellow pages is the way to go. Some feel that splashing your name all across a golf tournament is the trick. Me? I think advertising where your competition isn’t or doesn’t focus is how you gain the business that they’re neglecting. If you want to get mediocre results (no matter what the topic/activity) just do what everyone else does. Thus, we always look to emulate the best companies out there, even if it’s viewed as unconventional or unorthodox for a financial services firm. Bet that would make that stodgy green visor CPA roll over in his grave huh?

I like to let my personality show. While I like to consider myself a relatively intelligent person, I do like to do things that are outside of what I’ll call intellectual endeavors. I participated in sports while I was in high school, and while I wasn’t any good at most of them, I still liked the thrill of competition. This passion for a challenge is prevalent in my business dealings as well as my hobbies. Whether it’s weightlifting, cycling, riding motorcycles or playing a good ‘ol game of tag with my daughter, I like to have fun.

Having a little weekend fun!

In addition to the above, I also like people. I mean, you can’t really be effective as an accountant if you don’t like people or you feel that they are always getting on your nerves. Thus I like talking to people, learning what makes them tick, what’s going on in their lives and just bouncing ideas around. While you might not see me shutting down the party or dancing till the cows come home, I do like to mix and mingle with people every once in awhile. I mean hey, you can’t expect me to use my brain all day dealing with numbers and business problems and then not have an outlet to decompress right?

Sunset dinner with the missus.

All of the above are just simple examples of what goes on in my life. What’s more important is that if my clients ask, I have no problem telling them about what I do outside of work. Why? Read the last point.

I like to share. While I tend to do my best thinking and problem solving when I am by myself (i.e. typical introvert), I can’t function without some interaction from others (i.e. classic extrovert). Thus, I strive to achieve a balance between my need for inner quite and my desire to be active and have fun with other folks. The end result is what you see in this blog; me sharing my life with you, my friends, teammates, colleagues and anyone else who happens to stumble upon it.

Do I mind sharing what I do outside of business? No. Many people view accountants as intellectual, emotionless, lumps of goo that have no life outside of crunching numbers. By sharing my escapades, it proves that I am human and that I am no different than they are. It offers them a glimpse into my life and what makes me tick. Do most stereotypical accountants do this? I wouldn’t know; but that’s because I’m not your typical accountant!

Hey, even us accountants have a fun side.

Until next time…

By Administrator|2013-06-26T12:15:35-06:00June 26, 2013|Categories: Who's The Boss?|Tags: fun accountants, is your accountant boring?, Jared Rogers, not your stereotypical accountant, stereotypical accountant, why do accountants wear green visors|Comments Off

12 Ideas That Don’t Work In Business Anymore

We recently came across an article which discussed a dozen public accounting ideas that don’t work anymore. The article begins by mentioning a sermon that Rev. Robin Meyers preached where he warned that there may be an eighth deadly sin: nostalgia. You know, that feeling of fondness and good memories of a time since passed; usually quite some time ago. What was being suggested is that maybe by holding on to those “good ‘ol days” (which may not have been really all that good), we are actually delaying making the significant changes needed to address modern/future realities and challenges.

So with that said, we got to thinking; what are some things that don’t work in business anymore? What are some things that CEOs and workers cling to that should really be abandoned in today’s times? Back when Jared worked in the consumer package goods (CPG) industry, he said they lived and operated by one phrase. Innovate or die. What does this mean? Well, if your competitors are always looking for and introducing the next big thing each year, you better do the same or you’ll get left in the dust. To that end, if your business isn’t keeping pace with customer/consumer preferences and demands, you might as well just close up shop right now.

Here are twelve things that business owners need to know just don’t hack it in today’s day and age:

Build It and They Will Come. The days of simply opening up a store or retail location and having customers flock to you ended in the 1950’s and it’s not coming back. Today’s consumer has a plethora of information at their disposal (mobile access to providers, customer reviews, competitor pricing, etc.) to help them pinpoint who they will purchase from. The more important goal is to make sure customers can find you when they do their search. In short, make sure you are doing your marketing.

Expecting That Clients Will Stay With You. In our industry, many tax professionals don’t feel too compelled to offer “exemplary” service. Don’t get us wrong, you’ll have a decent experience, but you just may not get the red carpet rolled out for you. The reason is that many feel their clients won’t leave because it’s too much of a pain to switch accountants, tax preparers, etc. If you treat your clients like this, don’t be surprised when that up and coming competitor down the street steals them away from you.

Not Making Your Company 24/7 Accessible To Customers. We’re not saying that you have to interact with your customers in the wee hours of the morning. We’re just saying that you need to give them a way to contact you when it’s convenient for them. It’s solely up to you if you want to return their calls at 2AM, or have an email auto responder at least tell them someone will contact them first thing during business hours. But not having a mechanism for the girl who works the graveyard shift to let you know she’s unhappy during her lunch break isn’t acceptable.

Refusing To Embrace Technology. If you still rely on yellow page ads to bring you business, we have some news for you; no one uses the yellow pages to find providers anymore. Technology has made it so much easier for people to interact with one another. It’s also made it more instantaneous. Refusing to embrace current trends only does one thing; accelerate the decline in your revenue and ultimately your business.

Not Making Your Website Mobil Friendly. We’re just as guilty of this as anyone else; but we realize that it needs to be fixed and are working on it. The truth is, many consumers access your website from their phone or other mobile device. If your website doesn’t look correct when they pull it up, what type of impression are you sending? Remember; always put your best foot forward.

Not Offering Flexible Work Solutions. Certain professions are really big on “face time” or the amount of time you actually spend in the office. Given that this is 2013 and the various technological advances that we have made in the past 10-15 years; there really is no reason why you need to be in the office ALL of the time. If employees can’t work remotely, can’t take work home with them and can’t schedule non-critical work around their lives, don’t be surprised when they go and work for your competitor who does offer these things.

Believing That You Don’t Have To Offer Competitive Benefits. Some “Old Timers” in every company or industry always seem to believe that the “new way” of doing things is just a fad. Unfortunately, denying current trends exist is just not good business sense. Thus, if your company isn’t trying to be competitive in this arena, be advised that your employees may not be sticking around too long.

Not Offering A Casual Work Environment (Occasionally). Only bankers and those who entertain clients wear business professional dress all the time. Since the early 2000’s many companies offer a business casual environment with Friday even being a day where employees can dress down. Remember, it’s sometimes the little things that make your employees happy. Something as simple as altering the dress code when you aren’t meeting with customers can actually go a long way.

Believing That Talented Young Staff Will Wait Their Turn. Do talented athletes wait their turn to enter the professional arena? Do gifted individuals waste their brain cells attending all years of college when they know more that all the professors combined? So the question becomes why would you think your talented young staff would wait to attain roles that they are currently ready for? The best thing to do is identify your company’s next bright stars and begin to groom them and put them through their paces. If you don’t, you may wake up one day and find them as your competitor!

Expecting That Employees Will Stay With You. The day of company loyalty went out the door the day that companies started focusing on “shareholder value” as their guiding light. Employees nowadays have a lifespan of about 3-5 years before they are on to the next company. Now this doesn’t mean that you shouldn’t focus on developing your staff, or neglect succession planning. However, it does mean that you shouldn’t be surprised when one of your prized managers comes and tells you their leaving for their “dream job” in Hawaii.

Seniority Based Rewards System. Do you remember that college professor you had that was absolutely horrible? You know the one who did your education a disservice and should have been fired years ago? Oh yeah, Your State University wouldn’t let them go because they had tenure (i.e. seniority). Quite simply put, rewarding people SOLELY because they have been around since dirt was invented is NOT a good way to operate. A better way is to reward those who do a good job AND stay around for the long haul.

Earning The Right To Give Upward Feedback. Listen, we all have the right to praise and criticize (objectively of course). But the notion that feedback should only travel downward or laterally (as in the case of your peers) is not conductive to developing a world class operation. Everyone should have the right to give their opinion. If you not comfortable hearing what the entry level staff think, then offer them an anonymous way to do so via one of these platforms. Did you think we were going to say use a suggestion box? Please go back and read point number four!

Until next time…

How can graphic designers snatch Customers from Competitors? (dunnedesign.co.uk)
Facts of Business Life: If You Don’t Market Your Business, You Don’t Have One (business2community.com)
3 Types Of Employee Engagement And Its Result (goulddesigninc.wordpress.com)

By Administrator|2020-09-21T12:14:27-06:00June 20, 2013|Categories: Business Talk|Tags: antiquated business ideas, antiquated business practices, business tips, importance of technology in business, old business habits, outdated business management, things that don't work in business, things that no longer work in business|Comments Off

Federal Tax Lien Help

Occasionally someone will call our office freaking out about an IRS letter stating that a lien is being filed against them. In this post, we’ll discuss what a lien is and isn’t and how to deal with it.

What does a lien actually mean/do?

When you owe back taxes to the IRS, they will generally file a tax lien notice against you. Tax liens are a matter of public record and available for anyone to look up. They are typically filed for any balance due that exceeds $10,000. However, new tax liens are usually filed for less than that amount if you continue to pile on additional tax debt in the future.

So what exactly is a tax lien? Basically, it’s a claim against your property. A tax lien takes a higher priority over most other kinds of liens, and after 180 days jumps ahead of some lien types it doesn’t automatically supersede. A Federal tax lien will not jump in front of a mortgage, or a local property tax lien, but it can jump ahead of just about everything else.

The important aspect of a Federal tax lien is that it covers ALL of your property. For example, the mortgage on your house is usually only secured by the house itself. But when it comes to a tax lien, it is actually “secured” by everything you own. This means the clothes on your back, the money in your checking account, your retirement accounts and even your paycheck. That’s right; a Federal tax lien provides the government with the ability to claim your paycheck. That doesn’t mean they’re going to take it, it just means that they can.

A Federal tax lien also shows up on your credit report. This can impact your credit score, and make it difficult to obtain employment, as many employers will use this information in their hiring decisions.

It is important to understand that a lien is NOT a levy. A levy is an administrative order directing a 3rd party to physically hand over cash or property to the government that is covered by the lien. Thus, for 99% of people, a Federal tax lien is actually harmless, and has zero impact on their life or business. Sometimes, however, the lien itself creates a bad situation. In those cases, there are things that can be done with the lien that can help put you in a better position.

Lien Withdrawal

In extremely rare circumstances, it may be possible to obtain the complete removal of a Federal tax lien. In order to achieve this, the taxpayer (or their hired professional) must demonstrate two things:

The lien is creating an undue economic hardship upon the taxpayer
Removing the lien will help facilitate collection of the tax debt

Basically, you have so show the IRS that the pure existence of the lien will cause a dramatic loss of income. For a business, a lien may interrupt a factoring agreement or a line of credit, which is required for them to operate. For a person, the existence of a lien might mean the loss of a security clearance, and therefore loss of a job.

Typically, if one can prove the first bullet, then they can often prove the second. For example, if a business continues to operate, and you get to keep your job, then you both can make payments to the IRS, which is what is meant by “facilitate collection.”

Lien Subordination

Another tactic that one can sometimes take is to keep the IRS tax lien in place, but subordinate the government lien to some other lien. When we do this, we essentially get the IRS to place themselves in second priority position, underneath somebody else.

The most common reason for doing this is to place the IRS lien secondary to a bank financing lien, such as a factoring agreement, line of credit, or an operating capital loan. Many banks will cut off funding on a loan or line of credit if they are not in first position. Thus, subordinating the tax lien keeps the bank happy by keeping their lien in first priority over the IRS. This keeps you operating, and thereby “facilitates collection.”

Lien Discharge

It is not uncommon for somebody to have one particular asset that is worth a bit of money. Sometimes selling that asset can bring in enough money to help pay down the tax debt, or selling the asset will eliminate the monthly payment on the asset, thereby allowing you to put that money towards the IRS bill each month. See how this all keeps coming back to that “facilitating collection” point mentioned above?

Let’s say you own a vintage 1957 Chevy. It’s worth $60,000 but you still owe $25,000 on it. You’re currently making monthly payments of $500 toward the balance owed. You obviously don’t want to sell this car, but it will make life a lot easier if you did, since you owe the IRS $100,000 and they are going to start taking your paycheck via wage garnishment if you don’t do something.

So, you decide to sell the Chevy. The problem is that the IRS lien prevents you from selling it. Not only does your loan company have a lien on the car, the IRS lien covers it, too. Thus, we need to remove the IRS lien in order to sell the car. The process of removing the IRS lien from this one piece of property is called a lien discharge, and you obtain a Certificate of Discharge releasing this one asset only from the lien.

With the Certificate of Discharge in hand, you can sell the car. This in turn allows you to pay off the loan without the IRS making a stink about that $25K going to the bank. Furthermore, you then you have $35K profit from the sale that you give to the IRS, plus free up $500 per month to pay the government. This is not an ideal scenario for most people, giving up a beloved possession. But it’s far better than the IRS seizing 70% of your paycheck every month.

Conclusion

By itself, an IRS tax lien itself really has no teeth. It’s the things that come several months after the lien filing (e.g. a tax levy) that really cause trouble. However if you have a tax lien, it’s probably best to deal with it using one of the options above. Especially if the path to resolving the tax debt itself involves doing things with assets, banks, keeping financing open or preventing the loss of your job or business revenue.

By Administrator|2013-06-11T13:17:05-06:00June 11, 2013|Categories: IRS Talk|Tags: dealing with tax liens, how to deal with a tax lien, tax lien help, tax lien subordination, tax lien withdrawl, what is a tax lien?|Comments Off

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