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Dear Mark,
The New Year is a time many people decide to
make personal changes. In this economic
environment change is what most businesses need as
well. Businesses need "change" from coinage
(revenue) to slimming down the debt on the balance
sheet to changing a business strategy. An
old football saying is "offense fills seats, but
defense wins championships." The business
translation could be making sales drives revenues
(which is fun and exciting to most business
owners), but your financial position keeps you in
business during tough times (which most business
owners do not understand or don't want to
understand).
Since 2005 my message has been one of
defense. 2010 requires a new strategy as
well and it is time to play offense.
Although the economic environment will remain
tough, business owners cannot keep their heads
down. Business owners need to look up with
their eyes wide open in order to spot
opportunities. The opportunities should be
numerous and the volatility of the opportunities
may continue to be high (peaks and valleys).
2010 will be a year to keep your heads up and
eyes open. Stay focused!
Sincerely,
Mark Wyssbrod, CPA
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| What Economic
Drivers Affect Your Business?
Three
Strategies to Prepare for the Long
Haul |
 From 1982 to 2007 the U.S.
economy had an unprecedented expansion. The twenty
five year period was driven by innovation,
economic global expansion, favorable economic
policy, increase in population and expansion of
debt. These five economic drivers are now fading
quickly. During this period most of the
current professional started their careers. The
resulting concern is the current professionals are
not trained to offer advice in anything other than
a near perfect economic environment. What
can you do about it?
Understand and Plan for a More
Realistic
Environment
- From 1982 to 2007 their were only 16 months
of recession (just over 5% of recessionary
times).
- The 100 year period before 1982 saw about 40
years of recession to 60 years of growth (around
40% recessionary times).
- Going forward a realistic environment would
be recessionary times greater than 10%, but less
than 40%
- At a minimum that is twice the amount of
recessions we are use to experiencing and
something that needs a plan to get
through.
Hire a Group of Professionals Who Can
Help Your Business Achieve its Goals
- The number of years of experience, while
important, should not be a determining factor
- Choose the professionals with the right
experiences and, perhaps more important, the
right philosophies
- Hire professionals who will give you an
unbiased and truthful view of your business
- Hiring friend and family could be
dangerous if they are afraid to hurt your
feelings with tough news or view about your
business
- They may sugar coat a message when you need
to hear the reality of your
situation
Determine the Economic Drivers for
Your Business
- Are tax rules and regulations effecting
demand (solar, cash for clunkers, housing
credits, etc)? If so, what drivers will
replace them once the tax incentives expire?
- Determine who your customers are and who
your customers' customers are. What
affects their economic landscapes?
|
| Tax Payment
Reminder
4th Quarter
Estimated Tax Payments Due by
1/15/2010 |
|
 Be certain to remit your
estimated tax payments and vouchers by January 15,
2010. Additionally, please keep a copy of
your checks and vouchers for your records and
forward a copy to Pro@ctive CPA for our records.
Remember your Pro@ctive CPAs offer year end
tax planning which allows us to make the most of
the tax rules and regulations depending on your
goals and we can re-calculate your estimated tax
payments to allow for a more breakeven
scenario. |
|
| 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 -
Debt to
Equity |
|
The Debt-to-Equity ratio (DtE) indicates
the composition of a company's total
capitalization. This includes the
balance between money or assets owed versus the
money or assets owned by a business.
DtE = Total Liabilities / Total
Equity
Creditors prefer a lower DtE ratio since it
is an indicator to financial risk. A lower
ratio may also allow you to survive more
challenging
times. |
| Contact Information
11770 Haynes Bridge
Road
Alpharetta, Georgia
30009
phone:
(770)
664-8583
fax:
(678)
762-9413
web:
|
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