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Advice from CPAs

Ten Ways To Protect Your Business. Advice from CPAs. Business Plan. Reflects your goals for the company Identifies steps necessary to accomplish them Plan describes: Where you company is today Where you want it to be tomorrow How you plan to get it there. Financial Aspects.

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Advice from CPAs

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  1. Ten Ways To Protect Your Business Advice from CPAs

  2. Business Plan • Reflects your goals for the company • Identifies steps necessary to accomplish them • Plan describes: • Where you company is today • Where you want it to be tomorrow • How you plan to get it there

  3. Financial Aspects • Getting started • Financing sources include: • Angel Investors • Venture Capital Firms • Local Banks • Small Business Administration • Determine the loan schedule that best fits your needs

  4. Debt and Equity Financing • Debit Financing – loans must be repaid • Commercial, savings banks • Credit unions • Equity Financing – selling all or part of • your business to others • Capital firms • Employee stock ownership plans • Joint venture or licensing agreements

  5. Cash Flow • Effective cash management enables you to increase • and invest your money • Work with your CPA and review financial statements • Simple ways to improve cash flow: • Bill customers at the time of transaction • Offer discounts for early payments

  6. Annual Budget • Create an annual budget and review it • Budget allows you to: • Compare performance to projections • Communicate your expectations

  7. Marketing • Customer loyalty is key • Promotional efforts to raise your visibility • Customize advertising to niche markets • Identify and respond to emerging trends • Set up joint promotions • Become involved in local business associations • Give speeches in your community

  8. Legal Structure • Sole proprietorship • Partnership • General • Limited • Limited liability company • C or S corporation

  9. Legal Structure • Sole proprietorship – one-person business • Do not need to file any papers to set up • All business income and losses are reported on personal tax return • Partnership – owned by two or more people • General – responsible for operations and personally liable for debts • Limited – minimal control over decisions, but not responsible for debts

  10. Legal Structure • Limited liability companies, or LLCs – owners pay • taxes on their share of the business income • Corporation – separate from people who own, • control and manage it • S corporation – stockholders pay income taxes on business income on personal tax returns • C Corporation – company is taxed on business profits

  11. Managing Business Risk • Types of Insurance: • Group, life and health • Casualty and theft • Disability • Workman’s compensation • “Key man” • Liability • Automobile • A CPA can appraise your business to assess risk

  12. Managing Your Workforce Effectively • Determine the need for adding a position • Follow federal and state hiring guidelines • to avoid violating discrimination laws • The job description is an important tool • What is your responsibility as a business owner? • Clearly communicate philosophy to employees • Provide regular evaluations • Carefully document legitimate reasons for termination

  13. Effectively Using Technology • Is your technology serving the needs of your • business and customers? • Businesses can deduct new equipment purchases • Government allows you to recoup depreciation • deductions not taken from prior years • May want to consider leasing equipment

  14. Succession Planning • More than 70% of family-owned businesses • DO NOT survive from founder to second generation • Planning should begin 5 years prior to leaving • Tax saving strategies are an integral part • Life insurance is an important planning tool • Create incentives to retain key employees • CPAs can provide invaluable advice

  15. Fraud • A number of ways to reduce the risk • Conduct audits to uncover irregularities • Separate your recordkeeping functions • What should you do if you discover a discrepancy? • Call your bank • Check your credit report every six months • Be sure you have virus protection on your computer

  16. Using Professional Advisors Effectively • How can you find a CPA? • Ask business associates, friends, state CPA society • Legal guidance may be necessary • Screen before hiring • Conduct an in-person interview • Ask for written proposal outlining objectives • Make sure fees and expenses are listed

  17. Thank You!

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