Preface: This week we will hear from NOW CFO on insights regarding CFO Consulting that works to reward entrepreneurial decisions.   What are some mistakes small businesses sometimes make without a Chief Financial Officer?   How can bad accounting lead to bad decision?   What is a rolling cash forecast?          

Preface: Ineffective leadership and poor decision-making are often the results of a leader’s inability to notice important information in the world around them. So how can a leader identify and evaluate the information that is really important? And how can these skills improve the outcomes of key decisions and negotiations? Harvard Business School Professor Max Bazerman has spent a decade of research in applied behavioral psychology, focused on understanding how even the most successful people fail to notice important details–and how they can learn to avoid their irrational cognitive “blind spots.” In this interactive Harvard Business Review webinar, Bazerman provides a guide to breaking bad habits and spotting the hidden details that will change your decision-making and leadership skills for the better. Bazerman teaches you how to pay attention to what didn’t happen, acknowledge self-interest, invent the new choices, and realize that what you see is not all there is. Entrepreneurs must understand the power of noticing. Webinar: The Power of Noticing: What the Best Leaders See

Preface: What can seem to be a very easy tax filing, can be increasingly complex when a  tax feature like an installment sale is applicable. Appropriately Planning Installment Sales Can Prevent Tax Hazards Installment sales are a common tax management and tax reduction feature in taxpayer sales of major property assets. Yet, too often, taxpayers do not understand the hazards and risks inherent in installment sales that can result from improper or misunderstood tax planning. An installment sale is simply the sale of property where you receive at least one payment after the year of the sale. Form 6252 is applied to installment sales to calculate things like gross profit and percentages of installment sale income per year. Three parts exist to an installment sale: a) interest income, b) return of your adjusted basis in the property, c) gain on the sale. Each year you receive payment, you must include in income both the interest income and the segment that is your gain on the sale. The gain simply your adjusted basis subtracted from the sale price. Interest is the accrued for the time value of the note. If you’re unfamiliar with installments sales, here is how they work. Let’s say you sell a tract of land for $500,000. If your basis 20 years ago was $100,000, the gain is $400,000. If the installment sale is for a period of five years, then equal payments will be made of $100,000 per year. The gain of $400,000 would also be taxable over 5 years, or $80,000 per year. The benefit of the installment sale is that depending on tax attributes, a larger portion of the sales capital gains can result in lower tax, given the income is in a lower bracket (or say maybe exempt from capital gains tax), e.g. in…

Preface: It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed. After a hard-hitting sequence of scandals, poor decisions, and unfortunate events, Frankfurt-based Deutsche Bank shares are now down -48% on the year to $12.60, which is a record-setting low. Even more stunning is the long-term view of the German institution’s downward spiral. With a modest $15.8 billion in market capitalization, shares of the 147-year-old company now trade for a paltry 8% of its peak price in May 2007. ?Is Your Business Prepared?        

Preface: Net Investment Income Tax is an IRC code section applicable to certain passive earnings. Taxpayers should be aware of this tax and its relevancy to their tax attributes.   Net Investment Income Tax and Application of IRC 1411   IRC 1411 created a new tax code section for taxable years beginning in 2013. This new IRC code section is a tax on net investment income. The net investment tax is a 3.8% Medicare surtax assessed on passive and unearned income, e.g. any income that is not part of an active trade or business. The net investment tax applies to individual taxpayers, estates, and trusts. Earning thresholds apply to the applicability of the tax. Individuals with income in excess of $250,000 and married filing jointly taxpayers are subject to the tax, and say $200,000 for single filers. Three categories of income are subject to the net investment tax 1. gross income from interest, dividends, annuities, royalties, and rents unless, from ordinary business, i.e. bank earnings or active real estate rental enterprises are not passive while interest income on an investment portfolio is subject to the tax. 2. gross income from trade or business that is passive with respect to the individual taxpayer, estate or trust, or trade or business in financial instruments or commodities, e.g. earnings from a passive interest in a partnership is subject to the tax. 3. net gains attributable to the disposition of property other than property held in a trade or business that is not a passive activity or trading business, e.g. gains from the sale of partnership, gain on sale of a second property, or S corporation stock interests. For active traders, the determination of the activity being in financial instruments or commodities is made at the entity level that produced the income. Real estate…

The Mackay MBA of Selling in the Real World The book in a few words: The Forum Corporation in Boston studied 341 salespersons from 11 different companies in 5 different industries. Their purpose was to determine what separated the top producers from the average producers. When the study was finished, the results were startling. It was not skill, knowledge, or charisma that lead to the sales strata, it was all one trait: honesty. When a customers trust salespeople, they buy from them! There are however other traits that support stellar salespersons. These traits include a driven personality, positive attitude, appropriate preparedness, reputation, good first impressions, goal setters, service mentality, great listener, sense of humor, and continual pursuit of excellence. A salesperson tells, a good salesperson explains, and a great salesperson demonstrates. You are never too old to be a student of life, and a good student of life always does the required homework. Your businesses sales team should understand that they are not simply an employee. No one owes them anything, i.e. a paycheck, they must own their work and strive to enhance value every day, hone competitive advantage, learn, adapt, and help the company succeed. With that attitude, they too will succeed. Confidence matters. A professor stood before his 30 senior molecular biology students before the final exam. After a brief conversation talking about med school, the pressures to keep up the highest GPA, and his confidence in what they had learned, he made this offer to his students – anyone who would prefer not to take the exam would get an automatic B grade. After final opportunities passed, seven students remained. The professor handed out the final exam. There were two sentences typed on the paper: “Congratulations, you have just received an A in this class. Keep believing…

Use Your Head to Get Your Foot in the Door The book in 500 words. In his book, Use Your Head to Get Your Foot in the Door, Harvey Mackay gives invaluable advice on keeping, obtaining, and thriving at a job. There are as many ways to make yourself indispensable as there are reasons for your boss to cut you loose. You’ve just got to be observant enough to see opportunity. First, you start working half days. It doesn’t matter what half. There are 24 hours in a day and it doesn’t matter what half  of those you spend at work. Volunteering is the first step towards opportunity. What does your boss hate? Volunteer to do those tasks. First, you will gain additional expertise, and second, your boss will think twice, before making you walk out the door. Be optimistic. It’s not always easy, but it pays off. Help build the company and rebuild. Persevere and think of ways to solves problems, and improve efficiency. Educate yourself, look at resumes of those positions you aspire too, and stock up on relevant reading. In today’s environment, it’s not that you can’t find the knowledge; it’s likely you simply don’t take the time. The reason why so many people are part of massive company cutbacks is often that they did not take the initiative themselves to redefine their own jobs and make them more relevant. What are you doing today that is more or less important than several months ago? What are things your boss does that drains his or her energy? What are customers complaining about? What can you do about it? If you lose a job, remember, He or she who burns bridges better a very good swimmer. Discouragement on the loss of a job is too often a reality. You…

Preface: There more to investment real estate management than property maintenance and tenant management, here’s a tax perspective. Investment Real Estate Management: A Tax Perspective Proper investment real estate management for business owners can pay-off big. If you’re privy to the advantage of proper tax planning before making taxing decisions, it can often put some big tax savings in the pocket of the well-advised. To understand the advantage of proper tax strategies for investment real estate management, read further. Say a business owner is planning a $4m investment in a new facility for their developing business; the first pertinent tax planning item is the importance of a cost segregation study. A cost segregation study is a process of identifying personal property assets that are components in real property (the building); then segregating the personal property from the real property for tax purposes. While “property” may appear homogenized in definition to many business owners, for tax purposes there is a significant difference in the lingo between “real” and “personal” property.  The purpose of the cost segregation study is to abbreviate the depreciation time for tax purposes and therefore, accelerate the expense, resulting in more tax savings. The primary goal of the cost segregation study is to identify construction and building items that can be depreciated at an accelerated rate, e.g. 5, 7 or 15 years, and applicable bonus depreciation vs. the 39 years for the non-residential real property. The abbreviated depreciation period(s) obtain a greater immediate tax benefit  and expense for the investment real estate management portfolio, i.e. depreciation of say maybe 40% of building in 7 years vs. 39 years. Often, a construction engineer will prepare and review the cost segregation study for appropriateness of depreciation methodologies on the building components. The cost segregation study includes a nonintrusive yet detailed knowledge of…

  Preface: 1904, George G. Marvin arrived in tiny Warroad, Minnesota, to take a job managing a grain elevator. The area was a booming lumber center, providing pulpwood for paper mills. Recognizing an opportunity, George Marvin established the Marvin Lumber & Cedar Company in 1912. Honest and hard-working, George earned respect across the northern woodlands. He believed in the sanctity of a handshake and often loaned money to farmers and lumbermen who needed to get through the winter when work was scarce. The only record of the transaction would be a penciled note in George’s black pocket notebook. The need for year-round employment in sparsely populated northern Minnesota would become a recurring theme in the Marvin company history. During the Depression, George Marvin quietly helped his community. He provided Christmas trees for every family in Warroad. He delivered 100-pound bags of flour to needy families. One year, when crops were poor and farm families were near starvation, George arranged for each family to sell a truckload of pulpwood to a local paper company. Years after the Depression ended, stories began quietly circulating about George Marvin’s most magnificent gesture to his neighbors – one he never sought to take credit for during his lifetime. A local bank had failed. All the farm mortgages would come due immediately. Without the cash to pay off their mortgages, dozens of farmers would lose their land. George bought the bank, held the mortgages and the farmers paid him back over time. But George Marvin also was a shrewd businessman. Seeking a way to keep his lumberyard workers busy during the slow winter months, he designed a machine that turned scrap lumber into wooden stakes. Marvin sold the stakes to the state highway department. George Marvin set an example of hard work, ingenuity and integrity. But…

Preface: Sale strategies for your business are key. Everything else is an expense. No sales, no business. Tons of sales, tons of business. Do you every ask this question: how do we get tons of business?   What is the Best Strategy to Increase Sales?   The success of your business depends on sales revenue; how often do you strategize and carefully plan your approach to successfully sell your product or inventory as an entrepreneur? Whether your business is selling first-rate car polishes, premium ice-cream, or appetizing Dutch style soups, your customers ultimately buy from you because you are simply meeting or fulfilling what is considered a very important need…you say, is it really that simple?   Customer-Centric Sales   If you want to increase sales volume, map the issues and concerns that your clients and customers experience, in a customer-centric grid. Striving for customer-centric sales begins from building trust and credibility. The first step towards a successful sale is to ascertain exactly what your client or customer is looking for i) what is the need? ii) How can you meet it? Consistently meet a need, and revenues will accordingly build.   What is the need….and how can you meet it?   For customers and clients the definitions of “need” has a wide distribution curve; but consider i) why do they need your product or service?  ii) Why should they consider buying it from you? iii) How does taking the receipt or invoice from you, benefit them most?   Selling a commodity differs from selling a collectible; and as an entrepreneur, understanding why someone thinks they may need what you sell may be as easy as listening to them tell you what they want. In some instances, though, you may need specific inquiries.   Customer-centric selling is more than strategy or theory, it is…