LLC Archives | Page 7 of 7

CPAs help Emerging Small Businesses with their Tax Strategies

A recent Los Angeles Times article discussed why emerging small businesses need to engage in tax planning. The article rarely alluded to CPA’s as the solution. Instead, the article attempted to educate the small business person with some facts that a CPA could tell them in five minutes.

As a CPA, musicians used to be that my biggest challenge. With the advent of new technology, and so many people going into business, the challenge has changed to “ma-pa businesses. Musicians, of course, have the reputation of wanting to play their music and not be bothered with the mundane business end. That is still true in my CPA practice, but at least some musicians ask questions and want to understand what is happening with their money, and why. As a CPA, I applaud this.

In regards to ma-pa businesses, they are experts at the service or product they provide to the public. They seen to focus on two things: “What are my sales?” and “Do I have enough money to make payroll?” They are too inundated to engage a CPA strategist to help them plan for the future. (Read the E-Myth for a good example).

As a CPA, another issue with ma-pa businesses, is that they may not listen to tax advice. Some business owners tend to think that a CPA is against them because we tell them that they cannot deduct personal expenses. These deductions can be very dangerous for the business owner, and CPAs since we sign the tax returns. Secondly, it is bad from a business planning strategy because the business owner can never know the true health of their business. Lastly, hiding personal expenses in a business also reduces the small business owner’s income when it comes time to qualify for a loan. There are legal ways which CPA’s reduce taxes.

CPA’s can make a huge difference in a new business if brought in early. That is why many new business owners have taken advantage of our free one hour consulting offer.

Think of Your Business Clients as “Fans” and You, a Rock Star

Music Think Tank posted an article, How Well Do You Know Your Fans? that define different segments of a band’s fan base. As you read the article, substitute the word fan for business client. We all have business clients that appreciate our services on different levels. Levels of dependability, confidence, and of course honesty. Business clients can be classified in similar groups as rock fans. The questions to ask as a business owner is why are some clients more dedicated than others? What did I, as a business owner do that impressed clients to be loyal to me as some are. Lastly, once you have answered these questions, adjust your strategy in business client relationships and procurement. Learn by the mistakes when losing business clients, and duplicate the attributes you possess with those who are your greatest fans.

Are You Skating to Where the Puck is Going to Be?

“I skate to where the puck is going to be, not where it is.” –Wayne Gretsky.

This may be an overused quote, but it speaks volumes about why businesses, products, and careers strategies fail. I remember when ET hit the movies. As you well know, it was a monster hit. At the same time, I had a movie producer client who was intrigued in another script he had received because “it was just like ET.” I said to myself, “We already have an ET.” Well, the copycat movie was never made.

So much of strategy is based on copying what others have done successfully. That is not “strategy;” that is “similarity.” The link below tells the story of the imminent demise of the CD, and how companies are strategizing to squeeze every drop of life out of it before it succumbs to new technology. When you duplicate what others have done, you become a commodity. In the end, nothing will different you from others; just price. That is a red (full of sharks), not blue ocean strategy. To develop this blue ocean you must focus first on what you are delivering to your consumer, or business. Second, you must take a hard look at what consumers want, and what they are getting that they don’t want. This strategy will lead you to your blue ocean. Don’t let your strategy be swept away by copying others.

BMI article: Bye Bye CD

Strategic Planning with Cheap Technology in the Entertainment Industry

An article by Brian Stelter appeared in the New York Times about the iPad use in the entertainment industry.

Pitching Movies or Filming Shows, Hollywood is Hooked on iPads

The article demonstrates how creative types are altering their strategies by leveraging the iPad technology to display ideas of movie characters, locations, and actors. This strategy is very elastice because its limitation is the creative ability of the user. Whether it is college students carrying digital textbooks, doctors carrying patient records, or producers carrying the daily shootings, the strategy has changed. When I first started using a personal computer in the 1980’s, Lotus 123 was the big time saver. You would enter your row of numbers and click total. Nevermind that the red “WAIT” sign would flash twenty times, Lotus 123 was the greatest invention.

But there was a problem. I was constrained in developing my work strategy by Lotus 123’s functionality. All it could do was mathematical functions. But now, we are at crossroads where a disparate list of technologies have come together. The problem of limiting your strategy by the computer’s functionality has shrunk dramatically. Now, instead of the user’s strategy being limited by the equipment, the equipment is limited by the user’s strategy and abilities.

So, what does this mean to every business person and artist? It means that you should not look to technology to execute your strategy, but develop your strategy to execute the equipment’s capability. Do not do things the old way, but imagine a new way of doing things.

So, how do you start? Well, the first way is to step into the shoes of your customers. What are they looking for in a service of product? What should they be looking for, but have ignored it because nobody has offered it in such a way?

One of many theories is the Blue Ocean Strategy. Southwest Airlines sought to offer air transportation at the cost of a car rental. As history shows us, they were able to accomplish this and grab market share.

The next step is to build a strategy with milestones and metrics so you can honestly monitor your execution.

The last step is to alter your tactics in order to accomplish your goal.

Don’t Drop all 20th Century methods of Business Generation because we are in the 21st Century

This Wall Street Journal article offers examples on how business that tried social networking (SN) and search engine optimization (SEO) prospered when they combined them with old tried and true methods of generating business. SN and SEO are a great way to build a bigger fishing net, but you must throw the net out in a school of fish and personally reel it in. Good old fashioned busines sense can go a long way.

https://online.wsj.com/article/SB10001424052702303436904575570842639137342.html

Need Help Choosing a Retirement Plan? Use this Interactive Tool to Help you Decide

Retirement Plan! I can’t even make ends meet. I can’t use bread and butter money to stash away for the future!

Sometimes, that is statement I hear from individuals and business owners. So many just struggle through the daily grind, and don’t think about their retirement. Some small business owners think they have a good plan, i.e., place the entire risk on their business. When they are old enough they will sell the business to finance their retirement. Both of these positions are alarming, and are missing the biggest advantage to a retirement plan: time. When you invest tax deductible money in a retirement plan, it grows tax free over many years. If done correctly, compounding growth can set you up for a nice nest egg when you need it.

Ok, so I got your attention, sort of. But which retirement plan? Well, the AICPA has launched a nice tool to help you decide. Check it out.

https://www.choosingaretirementsolution.org/