Use an ESOP to Blunt the Fiscal Cliff Tax Increases OPEN's finance expert Mike Periu on Employee Stock Ownership Plan (esop) to Blunt the Fiscal Cliff Tax Increases. Starting in January, capital gains taxes on investments held more than a year will increase to 20 percent from 15 percent. An additional 3.8 percent tax on unearned income also goes into effect at the start of the year. Business owners who want to take equity out of their companies or that have been unable to sell their businesses … [Read more...]
Use a Sales Wedge to Close With a Big Customer
When large contracts are not landing, use the sales wedge strategy to connect with reluctant clients. Conducting a sales review helps you evaluate which strategies work to win new business. A technique called the sales wedge helps to connect with reluctant clients when large contracts are not landing. I recently reviewed the sales process for my company's large transactions. We go after big contracts, which tend to have longer sales cycles. Some of the largest proposals were taking longer … [Read more...]
Don’t Underestimate How Much Capital You Need To Grow
Not preparing a proper budget can have catastrophic consequences on your business. How much capital you need to grow? I recently had the pleasure of speaking at the Craft and Hobby Association’s (CHA) Winter Conference in Anaheim, California. The CHA represents small businesses in the craft and hobby industry which together generate around $29 billion in domestic revenues. I was energized by many of the participants who attended my address as they told me about their plans to move forward “full … [Read more...]
Creative Accounting Causes Problems For Groupon
Find out how Groupon is paying for its creative accounting practices, and what this will mean for the company. I recently wrote about Groupon’s planned initial public offering (IPO) and the operational and financial data provided by the company in its Securities and Exchange Commission (SEC) filings—it was quite an eye-opener. Towards the end of the article, I discussed some of Groupon’s accounting practices which were considered untraditional. Now, the company is paying for this creativity. … [Read more...]
A Closer Look At The Groupon IPO
With the recent Groupon IPO announcement, Groupon's financials are now public domain. What can we learn from their S-1 filing? As small businesses across the country evaluate the risks and benefits of group coupons and discount sales, it would be wise to peek under the curtain of Groupon, the company that launched the craze. There aren’t many opportunities to do this, especially with companies that are privately held because there is no requirement for them to disclose anything about their … [Read more...]
Reality Check for Your Small Business Accounting
Working with small business owners can be more interesting than watching the latest mystery thriller on Netflix. Owners are far more complex than movie characters. The stories of how they got started and how they stay in business can beat any movie plot. And sadly, the downfall (in cases where there are downfalls), can be caused by the most unlikely circumstances. It really makes for great storytelling! On a recent occasion I met a business owner whose company had gone through an … [Read more...]
Making Conservative Choices in Accounting
When many people think of small business accounting, they think “boring.” They picture an emotionless drone in a poorly lit room entering numbers into a dusty journal or perhaps an outdated computer. It is the antithesis of marketing and sales, which is considered the “sexy” part of business. While accounting may not be the most exciting area of business, it is certainly far removed from the caricature that many portray. Accounting involves critical thinking and strategic decision-making … [Read more...]