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Dear Mark,
Many small businesses feel that the past 18
months have been a rollercoaster ride when it
comes to the economy. The twists and turns and
sudden drops that companies have experienced are
enough to leave anyone wondering if the ride is
over. So, is the ride over?
It's hard to say. The economy and stock
market are showing mixed signals which are
challenging to interpret. Some economic data shows
results that are on the upswing while others
indicate more turbulence on the horizon.
How can you make sense out of such
conflicting opinions? We can help.
We spend over eight hours a week
studying economic and tax updates as well as
reading tax court cases. We try to
understand if the information is written by an
independent or biased source. Then we
compile the major underlying themes in an
article. The articles are meant to help you
prepare yourself and your small business for the
future. Although some of the topics seem as
scary as a 200-foot straight down vertical drop
they do provide solutions to better position
yourself and your business.
We perform this due diligence and ongoing
research at no extra charge for our clients.
It is one of the ways we work hard to try to help
you and your business succeed. We hope you
can help someone or an organization to make a
difference in the coming months.
Sincerely,
Mark Wyssbrod, CPA
|
| A Discount from
the Stock Market and Small Businesses
Four
Suggestions to Help Small Businesses
Survive |
 As the nightly news and
newspapers remind us every day the stock market
has increased over 50% from its March 2009
lows. Additionally, many economists are
suggesting the Great Recession is over. The
Great Recession is a good description for what
happened to large corporations. However,
small businesses have been hit much harder and
received less (to no) help to survive from the US
Government. When reviewing definitions of a
recession and a depression, a majority of small
businesses have been in a depression and may
remain in that state for many more months.
What can a small business do during this
timeframe to make the most of the
situation?
- Make sure you have the right mind set to
improve your situation. The past two
years have been full of many ups and downs for
small business owners and many of them are
mentally exhausted. It is important to
stay focused and positive, but grounded when
moving forward.
- Make adjustments to your business
model. The business model of the early
2000s no longer works, especially the ones which
include little to no equity, lots of debt, and
growing sales by over 10% a year.
- Consider a merger with a competitor or
like-kind business. Businesses have been
faced with lower revenues, but have the same or
higher overhead. By merging companies you
may be able to get back to a solid revenue
footing and decrease business expenses by having
one overhead instead of two.
- Manage your changes effectively and do not
be afraid to revise your changes on a regular
basis.
f you are interested in learning more you can
read our article "Are You Prepared For The Coming
Challenges? for additional
information. |
| We Don't Like to
Blow Our Own Horn, but...
Pro-Active Tax
& Advisory Solutions Recently Won an
Award! |
 Pro-Active Tax & Advisory
Solutions recently won the Five
Star Wealth Manager Best in Client
Satisfaction Award. This nomination appeared in
the October Issue of Atlanta Magazine.
This is a great honor for us and important to
our Clients. It means that our firm provides the
highest quality service, looks out for our
client's best interest, understands tax and
business strategy as well as how they relate to
the current business environment.
We are grateful for the Award and look
forward to continuing to serve our client's in the
same way that earned us this prestigious award in
the first place. |
| How To Prepare for
Inflation
Strategies for
Staying Ahead of the
Curve |
 As we discussed in last
month's update, inflation may be an issue in the
economy over the next several years. Since
we released our October update inflation has begun
to be a topic on the news (Yahoo!Finance, CNBC,
etc.). To learn a little more about
inflation, what it means and potential solutions
read on! What does inflation mean to you?
Higher Costs - Higher prices
for goods and materials and potentially higher
prices for services.
- Business Issue: Higher prices for
goods and materials could mean lower gross
margin which could hamper profitability
- Solution: Begin to become more
efficient in your work process through new
machinery and processes. The new
efficiencies should increase your gross margin
in the short run and stabilize your gross margin
once inflation begins
Higher Interest Rates - To
strengthen the value of the dollar which can help
stabilize the cost of materials the US Federal
Reserve will increase interest rates. In the
early 1980's the federal reserve increased
interest rates over 18% in order to curb
inflation.
- Business Issue: Lines of credit
and other debt financing could cost considerably
more with higher interest rates (current rates
are around 6-8%)
- Solution: Lock in interest
rates now for the next 5 or 10 years (over the
long-term)
- Solution: Reduce debt to avoid
interest payments in the first place, however in
economic theory debt is reduced in real dollars
in an inflationary environment (i.e. you could
purchase a Coke for five cents in the 1940s, now
that some Coke is over $2 at restaurants)
- Solution: Lock in low mortgage
rates for your home. With home prices
fluctuating (and potentially heading lower) it
may be a good time to take equity out of your
home and lock in a low interest rate. Do
not spend the equity, but reposition it in other
investments. Discuss with your financial
planner and be comfortable with the risks
involved.
There are many other factors in which
inflation can effect affect your business and
personal financial position. To learn more
please schedule an appointment with
us. |
|
| 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 -
Accounts Receivable
Days |
Accounts Receivable Days (ARD)
reflects the average length of time between sales
and receipt of payment. It is different than
Accounts Receivable Aging Summary which indicates
the time an invoice is outstanding.
ARD = (Accounts Receivable / Sales) x
365
ARD can be a barometer of your overall
liquidity. The lower the ratio the
better! |
| Contact Information
11770 Haynes Bridge
Road
Alpharetta, Georgia
30009
phone:
(770)
664-8583
fax:
(678)
762-9413
web:
|
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