The First 90 Days – Book Highlights Michael D. Watkins – Harvard Business Review Press   “Transitions into new roles [work responsibilities] are the most challenging times in the professional lives of leaders.” Whether you have new employees or promotions at your business, new roles, new responsibilities, and new opportunities are a transition. Making that transition successful is the purpose of The First 90 Days. Nearly 75% of more than 1,300 HR leaders surveyed agreed that the “success or failure during the first few months [90 days] is a strong predictor of overall success or failure in the job”. The goal in every transition is to reach the break-even point as quickly as possible. That’s simply contributing as much value to your organization as you have consumed. You want to cross the gap from net consumer of value, to creating value. What can we learn from book? One key transition trap is unrealistic expectations. If you don’t understand the expectation of the role, or set expectations that are unrealistic, you can think you’re doing well, yet fail to meet those expectations. Negotiate and clearly understand these expectations, make certain there’re realistic. Failing to achieve the break-even point, and failing to meet expectations can derail the best intentions. Here’s the other side of the story. If your employees can easily achieve break-even and exceed expectations, your transition is likely to be successful. The book outlines the importance of planning your transition and setting goals to do the right things. Here’s are 10 steps the book advises those involved in a transition to follow in order to achieve rapid momentum in a transition, reaching the break-even point quickly and exceeding expectations. 1. Prepare yourself – think the transition through, visualize the successful transition. 2. Accelerate your learning – learn everything you can about the business: markets,…

Preface: An often bewildering and overlooked area of tax compliance is sales and use tax. This blog is to increase the awareness of addressing these risks in a proactive manner with your tax advisor(s).   Ascertaining Before Audit Your Business Sales and Use Tax Compliance Risk(s) Is Advised Sales tax is an increasingly important tax compliance area for many businesses. Sales tax can be charged at more than just the state level. 45 states impose sales and use tax on purchases of tangible goods, and 4,696 cities and 1,602 counties also impose sales tax. If you’re conducting business across state lines, you should assess your nexus for jurisdictional sales and use tax compliance risk(s). More importantly for your customers, these sales tax deductions continue to be an itemized deduction on Schedule A with passage of 2015 “tax extenders” bill, coined the Protecting Americans from Tax Hikes (PATH). Sales tax is often assessed on the retail level for sales of inventory or services, or transfers and exchanges of taxable inventory or services. All sales are presumed taxable at the retail level unless proven otherwise. Sales tax is added to the price of the product or service and remitted to the state by the seller who charges and collects the tax, e.g. your business purchases a new snow blower from Millers Hardware Superstore, sales tax is charged on the sale, and the seller, Millers Hardware Superstore, remits that sales tax to the state. The complexity begins with special sales tax rules state-to-state specific on inventory items or services. Investing in sales tax compliance assurance is advised for every business. Use tax on the other hand, is a tax on the use or consumption of a taxable item or service that no sales has been charged or paid. The tax often applies to purchases…

Preface: Stepping outside the office, we take a quick look at a 1,300 year old Japanese business… that has outlasted some of the most powerful empires. How did they do they accomplish it?   Hoshi Ryokan a traditional Japanese Inn One specific dream, one night, 1,300 years ago, was the start of one of the world’s oldest businesses. Hoshi Ryokan a traditional Japanese Inn, launched from Taicho Daishi’s dream, has been a family managed business since 718 A.D. The Inn is currently in its 46th generation of Hoshis, with Zengoro Hoshi preparing to transition the business to his grandson.   The Hoshi family credits the success of the business and transition longevity to clear succession rules with each passing generation, as well as instilling a motto in each new generation “study the water running down a small current”. The ideology is among other things to be a small but powerful business. The power of the water was the successful origin of the spa Inn. Taicho’s dream told him specific details where a special hot-spring was located that would serve the village people forever. Taicho sought the help of villagers to locate the hot-spring; the village sick who immersed themselves in the water soon found their health was immediately restored.   While many businesses stories are not that unique, we can learn from the Hoshi Ryokan family succession plan that strict training in family protocol, values and personal ethics has ensured the success of the business transitions for over 1,300 years. The protocol includes a strong set of ethics and values. Each generation has had its own set of idea’s but the Hoshi family hasn’t waivered from their commitment to family succession for 1,300 years. The family knows what made them successful, and they (the Hoshi family) is not permitted to…

Preface: Form 1099 filing is required for IRS compliance. Most every business must file Form 1099-MISC yearly. This blog is written to provide greater light on the importance of Form 1099.   Understanding the Importance of Preparing Forms 1099 for your Business An appreciation for preparing Forms 1099-MISC promptly is rarely a high priority for many entrepreneurs. Yet, every business is required to file them for payments greater than $10 on royalties, or $600 for rents, services, prizes, or say attorney fees. Filing Form 1099-MISC documents and verifies reportable business expenses for tax deductions, and also helps the IRS monitor cash flows. Exceptions for Form 1099-MISC filings include payments to Corporations, or an LLC that is taxed as a C or S Corporations. A W-9 Form, Request for Taxpayer Identification Number and Certification is often issued to the 1099-MISC recipient for the required filing information such as social security number or business employer identification number and other pertinent information including address and telephone number. Forms 1099-MISC must be issued to vendors before January 31 of the tax year. If you don’t plan to file the Forms 1099-MISC for your business, your tax accountant will need to prepare the Forms 1099-MISC. Penalties for failure to file Forms 1099 are calculated upon when you file [late 1099s are serious business]. Penalties begin at $30 per form, and increase. To whom do you issue a Form 1099? Generally, independent contractors, and non-employee compensation paid for services on behalf of your business, e.g. subcontractors, must receive a Form 1099 if they are paid more than $600 during the tax year. This includes mechanical work or say landscaping services. Director fees paid to for board members must be reported on Form 1099-MISC too, and issued when members receive more than $600 for board services during the tax year….

A Prosperous and Happy New Year to you! As the New Year dawns, may it be filled with the promises of a brighter tomorrow. Happy New Year!  

Preface: A unique perspective on how technology is improving the agricultural business in developing countries …this paper presents the results from…providing mobile-phone consultations for farmers to receive expert advice from agronomists and peers. One agronomist can handle 2000 farmers. The charge is $0.53 a month to breakeven. Farmers appear willing to accept the advice without understanding why the advice is correct. Respondents on average are 36 years of age, have approximately 9 years of education, own roughly 6.5 acres of land, and earn on average $288 per month. The Value of Advice: Evidence from Mobile-Phone Based Agriculture Extension  

Preface: Gerald Celente is forecasting some serious concerns for 2016. We’ll see in only 365 days if his forecasts are accurate. Gerald Celente: Trends research analysis expert, futurist, keynote speaker, and Institute Director, Gerald Celente is trusted by many large corporations as the foremost authority on trend forecasting, research, and analysis…. He is the author of Trends 2000 and publisher of the Trends Journal…… Published and documented evidence proves that his institute has produced the most accurate, timely and comprehensive forecasts.… He is the world’s only analyst who covers 300 diversified trends fields. 2016 Trends – Gerald Celente ….THE LAST WORLD WAR: If trend lines drawn since 2001’s War on Terror are not reversed, World War III will not only be a Top Trend of 2016 – it may be the last world war. ….HUMAN WAVES: Throughout 2016 and for years to come, millions of refugees will flee war-torn nations looking for safety. Millions of migrants will leave economically depressed countries looking for work. …GLOBAL RECESSION: Where are equity markets headed? Will wages rise? Will retail sales rebound? … the $225 trillion debt bubble will burst and a global recession/depression will prevail. …SELF SUSTAINABILITY: Countries hampered by trade sanctions and/or failing economies with ample human and natural resources will build self-sustaining economies by manufacturing and growing what they need and trading within their borders. For people working in low paying jobs and want better quality of life, self-sustainability/voluntary simplicity become viable options. …GOLDEN OPPORTUNITIES: Merger and acquisitions in 2015 broke new records. However, the bigger the bigs get, the more opportunities they create. What they are and how to take advantage of them is a top trend for 2016. ….BREEDING ROBOTS: In 2016, robots become mainstream, transforming many aspects of daily life. Next year will be the benchmark to measure how much learning and experience humans will eventually morph away from, as robots more progressively assume those…

Preface: Accounting software solutions for businesses are a key financial decision. Businesses are yoked with the software decision they make. This blog outlines the value of making that decision appropriately. Choose an Effective Solution When Implementing New Accounting Software in your Business. Choosing an appropriate accounting software solution for your business is like buying the right horse. The opinion on the right choice is different for everyone. Implementing appropriate accounting software in your business requires thorough software due-diligence….due diligence on features like user friendly-ness, custom reports and understanding of current and future scalability. The cost of accounting software includes more than software licenses. Implementation requires training staff, migration of data, and system optimization. That cost can often exceed most financial forecast expectations. More importantly, errors in implementation, and cost cutting often lead to ineffective training and/or implementation, can producing months of skewed financial reports, with management working without accurate financial instruments, resulting in lackluster financial reporting or performance for the period. Accounting software should have a track record of working successfully for your industry. If you’re a small cash basis construction business say QuickBooks will probably work just fine. You can track projects in say Excel and invoice customers, track expenses paid, and business performance with ease. Say you’re a mid-level business ($7m+ or revenues), you will want to migrate with software that can manage workflows, and business intelligence on manufacturing and/or distribution. If you’re thinking QuickBooks with modules, implementation is increasingly more complex than simple installation of the software. There is no need to be dazzled with software features you will rarely use for your business. When you shop for software focus on practicality. What yearly upgrades are available? What are the upgrade costs? More importantly, what customer service backs the software to promptly answer questions or solve problems? To choose…

Preface: Transfers of business interests should be well-planned. This blog provides a precis of planning a transfer of ownership hypothetically for less than fair market value. What can it look like?   Planning Transfers of Family Business Interests for Below Market Value After years of building your business, maybe you’re working to retire and let family control your ownership? If you are transferring a business interest to family or a key-person, you should understand the appropriate steps in a well-planned transfer of interest with a transition advisor, business appraiser, tax accountant and attorney. This blog is to highlight for business owners an appropriate planning precis of a business transfer. For sake of conversation let’s say alias Delmar has an electrical business, Lancaster ProElectric with revenues in-excess of $3,000,000 per annum, with three family members who work in the business with him. Let’s say Delmar owns 100% of the S-Corporation. Delmar thinks he should retire and transfer the business to three family members. The first step in the transfer should be for Delmar to contact a transition advisor to provide counsel and oversight, to along with facilitating the transfer, retain value before, during and after the interest transfer. A transition advisor can help Delmar develop expectations, i.e. new key-person expertise in the business, and provide objective counsel to the transition. Working together with the transition advisor, Lancaster ProElectric could next obtain an appraisal of the marketplace business value. This is a valuation of assets, cash flows, and say goodwill that can consider relative value calculators e.g. key persons – Lancaster ProElectric may have experienced technicians, or a project manager, with signature project experience that permits Lancaster ProElectric to competitively bid on a variety of projects. An appraisal of the business should be obtained for purposes of properly valuing the business. Often times, these transfers…

Watson welcomes you to Cognitive Business! It’s here. The possibilities are infinite. Practical decision – To raise or not to raise interest rates? Watson continues to get smarter every day…. “solving problems that haven’t been solved before” We are in uncharted territory, and we need to understand that business is about change in ways we never before imagined.