A Family that operates a business often faces additional challenges of maintaining family relationships separate from business roles and responsibilities. The family may start with a strong parental leadership but as the kids become adults and start to take over the roles and responsibilities can become confused resulting in family strife.
I liked the article posted by Entrepreneur Magazine, by Lisa Evans “Father and Son Business Owners Share Their Secrets to Success” because it provides four simple and doable steps to helps family members keep the business separate form family.
To read the article Father and Son Business Owners Share Their Secrets to Success
BY LISA EVANS | June 14, 2013|
http://www.entrepreneur.com/article/226984#ixzz2WV9vpdF4
Thursday, August 22, 2013
Sales Tax and Discount Vouchers
In a recent discussion on redeming discount vouchers such as Goupon we came across the following discussion paper published by Washingotn Dept of Revenue.
Dept of Revenue paper on Discount Vouchers
Use of web-based deal-of-the-day vouchers,that may be redeemed for personal property and services at a discounted price may be subject to sales tax on the sale of the discounted coupoun. It also explains how taxes apply on redemption of these discount vouchers. As a general rule, the retailer is required to collect retail sales tax based on the total amount paid for the voucher, plus any other consideration received by the seller (e.g., cash, check, or credit card amount). Read the refrenced special notice for additional details
Dept of Revenue paper on Discount Vouchers
Use of web-based deal-of-the-day vouchers,that may be redeemed for personal property and services at a discounted price may be subject to sales tax on the sale of the discounted coupoun. It also explains how taxes apply on redemption of these discount vouchers. As a general rule, the retailer is required to collect retail sales tax based on the total amount paid for the voucher, plus any other consideration received by the seller (e.g., cash, check, or credit card amount). Read the refrenced special notice for additional details
Wednesday, August 14, 2013
Understanding the Balance Sheet
As a business advisor, I have assisted business owners to gain a better understanding of financial statements. They typically wanted to know how to make better us of the information contained on their balances sheet.
A good balance sheet can reveal subtle trends of increasing debt, inventory control problems, and cash flow problems. Additionally a balance sheet is required when seeking a business loan approval and used in determining the value of your business. Owners need to be aware of their current payable balances due and the current assets available to cover those bills. Lenders look at your balance sheet to determine your existing capital structure or the ratio of debt to equity to determine if you can support additional debt.
Balance sheets are a record of your financial status at a specific time. Comparing balance sheets across different times will reveal trends in your business enabling you to take timely corrective actions. Following are a few simple ways to use the balance sheet to understand financial trends of your business.
1. Compare this month to last month: check balances of current asset accounts for cash, accounts receivable, inventory, and current liability accounts for accounts payable, taxes payable, payroll payable. Calculate a Quick Ratio by dividing the total CASH + Accounts Receivable by the total current liabilities. A low Quick Ratio indicates pending trouble in paying your bills. A Quick Ratio greater than 1 to 1 is desirable, indicating sufficient ability to pay your bills.
2. A common problem for small business is cash flow, while the profit and loss statement shows a profit there is no cash in the bank. Common places to look for what happened to the cash are the accounts receivable, inventory. If the amounts in inventory and or accounts receivable are increasing then more of your cash is tied up until inventory is sold or customers pay their bills.
3. Another method for determining how much cash you should hold in the bank is to calculate working capital needs by subtracting total current liabilities from total current assets then divide by sales.
4. Inventory efficiency can be monitored by calculating inventory turnover. Divide cost of goods sold as shown on the profit & loss statement by the value in inventory. If the ratio is 2 then each dollar of inventory worked twice, if the ratio is 6 then each dollar worked much more efficiently at 6 times.
5. In the equity section of a balance sheet the line for Retained Earnings is a track record of your business performance, adjusted for amounts taken out by the owners. Retained earnings also represent the amount of value re-invested in growing the business.
6. Efficiency of your business can be measured in several ways. A ratio measuring sales to assets indicated how hard your assets are working. Low sales to assets ratio may indicate you have too much money tied up in assets. Return on Equity, pretax profits divided by net worth, reports the earning benefit of your investment in the business.
A good balance sheet can reveal subtle trends of increasing debt, inventory control problems, and cash flow problems. Additionally a balance sheet is required when seeking a business loan approval and used in determining the value of your business. Owners need to be aware of their current payable balances due and the current assets available to cover those bills. Lenders look at your balance sheet to determine your existing capital structure or the ratio of debt to equity to determine if you can support additional debt.
Balance sheets are a record of your financial status at a specific time. Comparing balance sheets across different times will reveal trends in your business enabling you to take timely corrective actions. Following are a few simple ways to use the balance sheet to understand financial trends of your business.
1. Compare this month to last month: check balances of current asset accounts for cash, accounts receivable, inventory, and current liability accounts for accounts payable, taxes payable, payroll payable. Calculate a Quick Ratio by dividing the total CASH + Accounts Receivable by the total current liabilities. A low Quick Ratio indicates pending trouble in paying your bills. A Quick Ratio greater than 1 to 1 is desirable, indicating sufficient ability to pay your bills.
2. A common problem for small business is cash flow, while the profit and loss statement shows a profit there is no cash in the bank. Common places to look for what happened to the cash are the accounts receivable, inventory. If the amounts in inventory and or accounts receivable are increasing then more of your cash is tied up until inventory is sold or customers pay their bills.
3. Another method for determining how much cash you should hold in the bank is to calculate working capital needs by subtracting total current liabilities from total current assets then divide by sales.
4. Inventory efficiency can be monitored by calculating inventory turnover. Divide cost of goods sold as shown on the profit & loss statement by the value in inventory. If the ratio is 2 then each dollar of inventory worked twice, if the ratio is 6 then each dollar worked much more efficiently at 6 times.
5. In the equity section of a balance sheet the line for Retained Earnings is a track record of your business performance, adjusted for amounts taken out by the owners. Retained earnings also represent the amount of value re-invested in growing the business.
6. Efficiency of your business can be measured in several ways. A ratio measuring sales to assets indicated how hard your assets are working. Low sales to assets ratio may indicate you have too much money tied up in assets. Return on Equity, pretax profits divided by net worth, reports the earning benefit of your investment in the business.
Tuesday, June 11, 2013
Who runs your business if something happens to you?
We all believe ourselves to be invincible. Yet accidents and serious illness happen. This story from newsobserver.com is just one example how quickly you can be out of action for a prolonged time.
The simple solution is to have a clear understanding and in writing instructions to a successor.
The simple solution is to have a clear understanding and in writing instructions to a successor.
When you are the key to your business very existence then key-man insurance might also be a good idea to consider for added financial protection.
Friday, June 7, 2013
Washington Health Plan Finder
Countdown to Coverage
To help you understand the upcoming changes associated with the Affordable Care Act and the new options that will be available through the online health insurance marketplace, we are pleased to present a new webinar series titled “Countdown to Coverage.”
The series, which runs from April to July, will include eight webinars that will walk you through the impact of the federal health care law on Washington State, how Washington Healthplanfinder works and where individuals can go for additional assistance to enroll in an appropriate health plan. A more detailed schedule is included below for your reference.
http://wahbexchange.org/countdown-to-coverage-webinar-series/
This fall, Washington residents will have a new way to find, compare and enroll in health insurance. It's called Washington Healthplanfinder, and it gives individuals, families, and small business owners the confidence to choose the plan that best fits their needs and their budget. Washington Healthplanfinder offers:
•Apples-to-apples comparisons of health insurance plans
•Financial help to pay for copays and premiums
•Expert customer support online, by phone, or in-person through a local organization, insurance broker or agent
http://www.wahealthplanfinder.org/
To help you understand the upcoming changes associated with the Affordable Care Act and the new options that will be available through the online health insurance marketplace, we are pleased to present a new webinar series titled “Countdown to Coverage.”
The series, which runs from April to July, will include eight webinars that will walk you through the impact of the federal health care law on Washington State, how Washington Healthplanfinder works and where individuals can go for additional assistance to enroll in an appropriate health plan. A more detailed schedule is included below for your reference.
http://wahbexchange.org/countdown-to-coverage-webinar-series/
This fall, Washington residents will have a new way to find, compare and enroll in health insurance. It's called Washington Healthplanfinder, and it gives individuals, families, and small business owners the confidence to choose the plan that best fits their needs and their budget. Washington Healthplanfinder offers:
•Apples-to-apples comparisons of health insurance plans
•Financial help to pay for copays and premiums
•Expert customer support online, by phone, or in-person through a local organization, insurance broker or agent
http://www.wahealthplanfinder.org/
Tuesday, June 4, 2013
Customer Loyalty Program
I found these blogs on Intuit' Small Business Blog. They offer several tips to implement customer loyalty program via social media.
Friday, May 10, 2013
Sell Value, Not Low Price
Improve your sales with value based on quality and service. Customers will pay up to 14% more for quality and 10% more for great service. Let’s call service and quality the Value Proposition, a statement that describes the unique value your business offers and separates you from the competition. A strong value proposition that clearly set your quality and service can result in your ability to obtain a better price.
Creating a value proposition can be achieved with the following basic business activities.
Become a trusted advisor. Provide knowledge about your products, your industry and the ability to help the customer resolve their problem. Validate your trusted advisor relationship with integrity offer accurate information on products and services.
Understand the customer’s situation. Listening to your customer, don’t be in a hurry to sell a solution before you have a clear understanding of what the customer is trying to tell you .
Be easy to deal with. Customize solutions be flexible and creative allow adaptions of products and service. Partner with customers in creative problem solving. Many innovative new products were invented as a result of solving a customer problem.
Confirm the proposed solution. You offer great service and quality so you can reduce any perceived uncertainty the customer may have by offering no hassle return policy, guarantees, warranties or exchanges.
Reinforce the relationship. Ask your customers simple feedback questions about delivery of services or products. Asking customers will reinforces positive experiences and help you to immediately identify and correct any complaints, thus turn a potential unhappy customer into a happy customer.
Creating a value proposition can be achieved with the following basic business activities.
Become a trusted advisor. Provide knowledge about your products, your industry and the ability to help the customer resolve their problem. Validate your trusted advisor relationship with integrity offer accurate information on products and services.
Understand the customer’s situation. Listening to your customer, don’t be in a hurry to sell a solution before you have a clear understanding of what the customer is trying to tell you .
Be easy to deal with. Customize solutions be flexible and creative allow adaptions of products and service. Partner with customers in creative problem solving. Many innovative new products were invented as a result of solving a customer problem.
Confirm the proposed solution. You offer great service and quality so you can reduce any perceived uncertainty the customer may have by offering no hassle return policy, guarantees, warranties or exchanges.
Reinforce the relationship. Ask your customers simple feedback questions about delivery of services or products. Asking customers will reinforces positive experiences and help you to immediately identify and correct any complaints, thus turn a potential unhappy customer into a happy customer.
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