| Dear Mark,
"In an era of perpetual challenges our
actions define us" were the words I opened the
North Fulton Business Expo with on March 19,
2010. I strongly believe in this statement;
both on the challenges we face as well as the need
to find solutions.It is within this context
that I have begun to see small business owners'
attitudes change.
Last fall the attitude was "when will 2009
end because 2010 is going to be so much
better!" However, 2010 has not lived up to
small business owner's expectations and they seem
be mentally waning. I encourage you to
stay focused and positive, yet stay grounded to
reality. Make the sacrifices (life-style and
business-style change) sooner rather than
later. We need to be more innovative and
stay solution focused! We can make it
through this!
Best of Luck,
Mark Wyssbrod, CPA
|
|
Small Business Environment Update
Three Steps You Can Take to
Better Your Small Businesses
Position |
|
 Revised forth quarter 2009
GDP (Gross Domestic Product) numbers are out and
they are lower than previously reported.
Why? The answer is something most of us have
felt for months, but did not want to admit
to. It appears GDP growth was revised down
and is not expected to explode to the upside
because most small businesses have not taken part
of the recovery. Large corporations have
recovered: revenues have stabilized, gross profit
growth is expanding, cost cutting appears to be
over (including firing), financial institutions
are lending and profits are recovering. On
the other end of the spectrum is small
business: revenues are struggling to
stabilize, profit margins are shrinking, cost
cutting would continue if possible, banks are
nowhere in sight (unless you like jumping throw
hoops) and profits are still struggling.
It appears we have
learned the Federal Reserve and US Government are
good at manipulating the business environment for
large corporations. This gives them control
over the large corporations. However, the
Federal Reserve and US Government have not been
able to figure out how to stimulate the small
business economy. I wonder from time to time
if there is a business revolution occurring to
more and larger corporations and less small
businesses.
How can we small business
owners survive another 3 to 5 years? The
good news is large corporations seem to have
finalized the down sizing of their labor
force. Employees employed by large
corporations feel confident their job is
safe. Why is this good news for small
business? When employees are secure in their
employment they begin spending again. A lot
of small business revenue is tied to consumer
spending.
What actions can you take to
better your small businesses position? (By
the way, individuals can take similar steps)
1) Form a Board of
Advisors
-
Everyone needs
accountability
-
Be certain to have
individuals with different backgrounds,
experience and expertise
-
Don't include friends just
because they are friends - this isn't a reason
to go have a beer - this is to save and better
position your company
2) Focus On Gross
Profit Margin & Net Profit
Margin
-
Gross Profit Margin is
Revenues less Direct Costs
-
Net Profit Margin is Revenues
less all Costs
-
In an environment were you
cannot control your revenues you need to be able
to control costs and margins
-
Review your manufacturing
and/or your operating procedures - can you be
more efficient?
3) Create and Stay
Within a Budget
Want to learn more?
Contact Mark and your Pro@ctive CPA Team for an
advisory meeting at (770)
664-8583. |
| Small Business
Forecast For 2010
Is Opportunity
Knocking? |
 Foreclosures and bankruptcies
will continue to increase and will be
significantly higher than 2009 amounts
Opportunity: Purchasing
assets (primarily real estate) at significant
discounts
Commercial property will face
more challenges feeding into more loan issues for
banks
Opportunity: Purchasing
commercial real estate and commercial loans from
failing or failed banks at a
discount
Unemployment will remain high
9-10%
Small business historically
generates 70% of growth creation. We cannot expect
unemployment to decrease until we find out how to
get small business stabilized and then growing
again.
Opportunity: You
can hire more qualified employees for lower
wages.
Lending
Small business should expect to see
continued challenging in seeking finance.
Expect to pay more for a loan through loan fees,
costs of preparing a business plan, cost of having
representation (CPA, attorney, etc.) with you at
loan meetings
Opportunity:
If you are able to receive financing lock an
interest rate and make sure the long is long-term
(i.e. 5+ years) This way you do not have to worry
about a renewal in the short-term. Also, think
before pre-paying your loan - you may not get the
money
back. |
| Tax Payment
Reminder
This One Almost
Goes without Saying |
|
April 15 - Individual and Partnership Tax
Returns Due
April 15 - 1st quarter 2010 Estimated tax
payments Due |
|
| IRS Circular 230
disclosure: To ensure compliance with
requirements imposed by the IRS, we inform you
that any U.S. federal tax advice contained in this
communication (including any attachments) is not
intended or written to be used, and cannot be
used, for the purpose of (i) avoiding penalties
under the Internal Revenue Code or (ii) promoting,
marketing or recommending to another party any
transaction or matter addressed
herein | | |
|
| Financial
Ratio of the Month - General & Administrative
Payroll To Sales |
|
This ratio can inform you how efficiently
your labor is operating. Management can use
this ratio for rightsizing their labor
force.
G&APR to $ = General &
Administrative Payroll / Sales
What should your ratio be? It
really depends on your
industry! |
| Contact Information
11770 Haynes Bridge
Road
Alpharetta, Georgia
30009
phone:
(770)
664-8583
fax:
(678)
762-9413
web:
|
| |
