Category Archives: Money Management

The ABC’s of business financials.

Improve your odds of business success by understanding your financing needs as well as the options that are available to help you start, manage and grow your business.

What is your exit strategy? #smallbiz

by Kelly Deis of SoundPoint Consulting

Most business owners transition out of a business only once in their lifetime. Few have been so lucky (and talented) to have built and exited from more than one company. And, for the majority of owners 80% or more of their net worth is tied up in the business.

It makes sense that a business transition should be one of the more thoughtful and deliberate decisions of a business owners’ working life. After a transition is complete, an owner does not want to be saying, “I wish I knew then what I know now.”!

The best way to accomplish a successful transition is to develop an exit strategy based on the owner’s personal and business goals and to commit the action items required to achieve the objectives to paper. This is known as an Exit Plan. And without it, the owner may not know what to expect, much less what is possible in a business transition.  Continue reading

Understanding Product and Customer Profitability: A Key to Strategic Growth

by Kelly Deis of SoundPoint Consulting

Ever wonder where you are making money or (gulp) losing money? Any business can benefit from understanding it’s product and customer profitability.

If you are a:

  • Contractor – are you making money on residential or commercial contracts?
  • Vet or doctor – are diagnostic services or treatment services more lucrative?
  • Winery – is the 750ml bottle of house wine or the Reserve 1.5L magnum more profitable?

There is huge value to understanding your product and/or customer profitability – it can help set your strategic direction as well as develop new products, marketing campaigns, loyalty programs, incentive plans, and cost reduction initiatives.

Imagine boosting by your lowest margin products by 10% – what a difference that would make to your bottom line!  Continue reading

What Tax Records Should You Keep… And For How Long?


Except in a few cases, the law does not require any specific kind of records. However, you may want to include all of these items, no matter what process of recordkeeping is chosen:

  • Business checkbook
  • Daily summary of cash receipts
  • Monthly summary of cash receipts
  • Check disbursements journal
  • Depreciation worksheet
  • Employee compensation record
  • Any financial statements

Also, be diligent in keeping these records as well, whether it be the original source documents OR electronic copies:

  • Gross receipts
  • Inventory
  • Expenses
  • Travel, transportation, entertainment & gift expenses
  • Employment taxes
  • Assets
  • Cancelled checks

Continue reading

Ask SCORE: How much does it cost to hire an employee?

by Joseph G. Hadzima Jr.

Employment costs fall into several broad categories:

Recruiting Expenses.

Finding technically qualified people who can function effectively in a rapidly growing start up venture is not easy task. In an earlier column we discussed the economic alternatives for head hunting. For this column it suffices for me to remind you to be sure to devote the time to make sure that your hires are as close to perfect “10s” as possible. Anything less will be a drag on your business.

Basic Salary.

Basic salaries vary all over the place depending on the industry and a variety of other factors. There are data that can help you calibrate an appropriate base salary. For example, the Massachusetts Software Council puts out an annual Compensation Survey and there are similar publications in other industries. Be sure to establish rational salary ranges given your growth plans. This means that in most cases there should not be great salary differentials between early hires and later employees- any “risk component” of being an early hire should be made up in the equity compensation component.  Continue reading

Ask SCORE: As a business owner, how should I pay myself?

This is an excerpt from an article by Hal Shelton for Read more here.

Pay Strategies

Depending on the maturity of your company and your plans for the business, you may adopt different compensation strategies.

  • Start-up mode: It is typical for a start-up to be cash-flow negative in its early months, if not years. This results from one-time start-up expenses like buying equipment, building out a facility, stocking inventory, marketing to attract customers, building products or websites, legal and accounting costs, and rent and utility deposits. Also at start-up, there are no or few customers. As such, during these times, your compensation will be light as there are no funds to pay more. Hopefully, you had prepared a business plan, including a cash-flow forecast, so you knew the range of your compensation during this period, and if there was not enough to “live on,” you have made other arrangements.
  • Lifestyle vs. ramp and sell: If you intend to own and operate your company for many years, which is what 95 percent of entrepreneurs plan, then you will want to develop, over time, a predictable compensation plan both to meet your personal needs and be predictable for yourself and the company.

Continue reading

Budgets are good, dashboards are better.

by Kelly Deis of SoundPoint Consulting

It’s that time again. Fall is in the air and the kids are back at school. With a new year right around the corner, now is a great time to take stock of your company’s financial well-being.

Here are some thoughts on financial reporting to consider as you plan your business for the coming year.

Perform a Financial Review

First, take a look at your current financials to make sure they are in order. If there are historical errors, fix them. Make sure the Balance Sheet is correct (you’d be surprised how many businesses do not have proper Balance Sheet accounting).

Make sure your chart of accounts makes sense and helps you manage your business. Do you have expense items in your Costs of Goods Sold, or vice versa? Are the categories well-defined and consistently used? If not, make changes for the new year.

You need a good clean starting point to move forward.  Continue reading

Will your business pay for your retirement?

by Kelly Deis of SoundPoint Consulting

The big question that many small business owners, closing in on the end of their working years, are asking is…WILL the sale of my small business help fund my retirement needs?

The statistics while currently on the upswing do not paint a great picture for business owners hoping to cash out with a lump sum necessary for retirement. Here are some statistics to consider:

  • There are approximately 28 Million Small Businesses in the United States (Source: Business Insider)
  • 43% of small business owners have no formal financial plan (Source: Exit Planning Institute)
  • 5,409 businesses sold in first three quarters of 2013 as tracked by (
  • $180,000 – Average Sale Price for small businesses sold in first three quarters of 2013 as tracked by (
  • 26.7 million – the number of businesses employing 19 people or less – (US census data)

Continue reading

Why you shouldn’t do your own bookkeeping.

by Jerry Slade, ByTheBook Keepers, Inc.

In the early 80s, I think it was, I was approached by Intuit to be an Alpha contributor to their brand new program called QuickBooks.  I was happy to participate in the program as I was “doing” bookkeeping for a few Tax clients at the time and nothing else was very good for Bookkeeping then.

QuickBooks turned out to be a great program for larger “small businesses” and companies with an experienced accountant on board, but it was mostly sold to small business owners who were told they could do their own bookkeeping.  Many could and still do, but……..why?  Continue reading

How to pay business debts you can’t afford.

by Jerry Silberman, CEO and Founder Corporate Turnaround


Click to download PDF.

The U.S. Small Business Administration reports that approximately 40,000 businesses close their doors or file for bankruptcy each month. Many of these companies were mired in debt and didn’t have a viable plan to work themselves out of it. All they had were hopes that things would get better. If your business is experiencing problems with debt, read on so you don’t become a statistic.

Corporate Turnaround has helped thousands of businesses get out of debt. The strategies in this guide have been instrumental in reaching over 25,000 affordable settlements for our clients. Now we are sharing our most closely guarded secrets with you to help you work your way out of debt on your own.

Why? Because if you can afford 8% a month or more to pay off your problem debts, you should be able to satisfy your creditors on your own. If you think you can’t afford 8% a month, this guide will give you other viable options as well. In any case, reading the guide will help you better assess your situation and options.

Getting your business out of debt on a limited budget requires a methodical, disciplined and patient approach. If you are willing to spend the time and effort necessary to honorably repay your creditors to the extent you are able, then this guide can help. Go through this guide completely to get a good understanding of what to expect and what to do.

You’ll see the criteria to use in determining whether you can manage your debt settlement on your own or if you need to take alternative action. You’ll learn how to create a budget to enable you to meet your post-settlement obligations. You’ll determine which debts are your “problem debts” and craft your own settlement offers for creditors. You’ll find out how to best present your hardship to make it easier for a creditor to accept any of your settlement offers.

You may decide that it’s best to close your business because even if your debt problem can be properly addressed, you still won’t be able to make a profit going forward. But some business owners do not have this freedom of choice. Often, their fate is tied to the business and they can’t just walk away–they’ve signed contracts with banks, suppliers, landlords and finance companies for which they may be personally liable. You may have no choice but to try to work things out. If the debt is too heavy, you may need professional help. If the situation isn’t so bad, you may be able to work things out on your own.

The most dangerous option is to do nothing. Without making a decision, the company can sink deeper into debt and it could be only a matter of time before creditors seize your assets and put you out of business.