Belk on Business: Recent Episodes
Josh Belk
Joshua Belk and his firm, Lodestar Tax and Consulting has been specializing in tax consultation, planning and preparation, business consultation and structure, and fractional CFO services since 1998. In addition to helping businesses and business owners reach their financial goals, Josh also helps to educate them in the complex matters of the business world which at times can be tedious for a business owner.
Basis, Limitation of Losses and Additional Tax Exposure – Belk on Business – Episode 190
There are a number of ways that one can look at a company’s balance sheet and determine the health of the business and financial discipline of the business owner. One way is to look at the shareholder’s basis in the company, handling of debt and it’s methods or process of making distributions.
Most small businesses owners run their business checkbook like their personal checkbook. Not only can this be detrimental to the financial health of the company but also can create unexpected tax issues (and asset protection issues). Also, the shareholder needs to be aware for tax planning purposes when they can recognize losses and when they can take distributions without an additional tax exposure.
Basis in an entity (tax implications for this podcast will be primarily focused on an entity taxed as an S Corp) is a number that you must track. There are two types of basis, stock basis and debt basis.
Stock basis is calculated as follows:
Cash and property contributed
Plus/minus: Net income/loss
Minus : distributions
There is no such thing as sweat equity. The stock must be purchased via cash or property contribution. To create basis for someone who worked to earn shares, they should receive compensation then purchase the shares to establish basis.
Debt basis consists primarily of either loans by the shareholder or payments on company loans by the shareholder.
If you have a negative stock basis, there will be a limitation on losses and if any distributions were taken in excess of basis will be taxed as ordinary income. You could end up in a situation where you can’t recognize the losses and distributions taxed as ordinary income.
Loans must be bona fide loans which among other things, must include the following:
- expectation of payment
-Loan terms (loan amount, payment amount, interest rate, maturity date)
-Remedies for default
-The loan must be truly intended to be a loan
-Whether shareholder is subordinate to general creditors
-Enforcement by the lender (shareholder)
If a shareholder makes a payment on a company loan, it increases the shareholder’s debt basis. Simply being a guarantor on a loan does not generate debt basis.
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Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/spPBRuCJo2c
The Power of Ownership with Justin Roethlingshoefer – Belk on Business – Episode 189
Order Justin’s book here: https://www.amazon.com/Power-Ownership-Redeem-Relentless-Pursuit/dp/1394230028
Learn more about Justin and Own It: https://justinroethlingshoefer.com/
JUSTIN ROETHLINGSHOEFER is the co-founder of OWN IT Coaching, a multiple seven-figure coaching company. As a former performance coach in the NCAA and NHL, through OWN IT he has made the same ecosystem that is usually only available to the best athletes in the world now available to you. Utilizing best in class testing, technology, and coaching he and his team have been able to transform the health and lives of hundreds of thousands of leaders throughout the country while empowering them on their journey and making the complex topic of health simple, actionable and personal. He is a speaker and the host of The OWN IT Show podcast. Justin is the author of three other bestselling books including The Athletic Performance Blueprint and OWN IT.
“Ownership is the intersection point of responsibility and accountability”
Topics:
-Changing our mindset from accepting normal to living differently to achieve success
-Types of stress and its impact
-How to tell what our bodies are telling us
-What is HRV and why is it such an important metric?
-The four pillars:
1)Fuel – nutrition and genetics
2)Build – a stronger foundation for better health
3)Repair – the 3-2-1 rule
4)Renew – Life by Design Habits
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Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/WgpkgdruuFo
Communication and Culture – Belk on Business – Episode 188
A business owner can communicate concrete guidelines that people must conform to or use proposals to start conversations. The proposals are then used to ask questions, promoting curiosity, innovation, and collaboration.
Communicating with complaining will cripple culture. This leads to a culture of individuals blaming instead of taking ownership or finding areas to improve. Communicating with criticism or condescension leads to a culture of contention. A bad culture can lead to employees attacking others, usually the weakest link in the chain resulting in the breakdown of the entire organization. No innovation or collaboration results in the team members feeling siloed, unable to resolve issues whether internally or with the customer.
Communication with collaboration leads to a culture of community. Help to bring along those who may need assistance, asking for help, leaning into others' ideas to resolve problems, coming up with creative solutions to resolve problems or innovative ideas to bring more profit or impact to the organization.
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Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/LscVBb1ILAo
Indicators of Financial Issues – Belk on Business – Episode 187
There are indicators that reflect when there is a financial issue with the business.
1)Inability to pay bills on time – this will hurt the reputation or brand of the business. A business needs to keep good relationships with its vendors, partners and team members.
2)Ignoring the budget or not making the proper revisions on the budget
3)Not having any savings for emergencies or growth
4)Debt/liabilities increasing due to inability to maintain operating expenses
5)Owner shifting to draws or paying employees as contractors to reduce payroll tax exposure
6)Focusing only on profit = failure to invest in culture and impact to fulfill purpose
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Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/sSKn4XFEAAs
Money Handling Mistakes Pt 2 – Belk on Business – Episode 186
There are many mistakes a business owner can and does make, some which could be fatal to the business either directly through mismanagement of the finances or indirectly through failure to follow proper internal controls or following basics of asset protection. Best to run finances in a proactive manner, not a reactive one making tweaks and not major adjustments which can shake a business and its culture to the core.
1) Ignoring the numbers – for many businesses, especially in the first phase of business ignores the accounting/finance function of the business until either they are needed for loans or taxes. This results usually in overpaying taxes, inability to have an understanding of what is and isn’t working in your business and an inability to plan effectively towards profitability and scaling. Can also result in making poor financial decisions such as purchasing items just for tax deduction purposes or purchasing what the business doesn’t really need.
2) Not budgeting or cash flow planning – budget is developed around goals/projections along with cash flow projections so to be able to hit metrics, determination of when or will we run out of cash, when can we hit savings metrics for scale or improvements, cash flow needed for taxes, equipment, personnel, savings and crisis planning. Cash needed for emergencies and opportunities (this usually should be reflected in retained earnings, not debt).
3) Failure to review financial reports – lack of internal controls around accounting and finance – review payables, receivables, bank statements and credit card statements periodically. Review helps reduce potential for fraud.
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Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/khBtrCub9NQ
Money Handling Mistakes – Belk on Business – Episode 185
There are many mistakes a business owner can and does make, some which could be fatal to the business either directly through mismanagement of the finances or indirectly through failure to follow proper internal controls or following basics of asset protection.
1)Co-mingling of business and personal finances – this goes beyond paying personal bills with the business checkbook but can pierce the corporate veil.
-Asset protection issues – creates a risk exposure
-Internal control issues – creates a risk with banks and regulators
-Loss of self confidence and confidence others have in you
-Decreased business value – don’t know true business performance whether it is paying personal bills and trying to expense them in the business or pulling cash out of the business beyond payroll and properly determined and documented distributions
2)Mismanagement of debt – debt stress tests the business and will magnify any other financial mismanagement mistakes
-Need profit to cover payments
-Best startups not take on any debt if at all possible
-For all businesses - only take debt on assets with greater book value (not FMV) than corresponding loans
3)Mismanagement of Spend
-Outspending cash inflow
-Not following a properly designed budget or not having a budget at all. Budgets should be designed around goals
-Buying what you don’t need or failure to plan - Rent vs buy (overspending on real and personal assets or properly analyzing if it is needed at all), tax planning or management (payroll, sales, income), planning and saving for growth or seasonal or market fluctuations
-Establish retained earnings for emergencies and opportunities
-Review payables, receivables, both bank and credit card statements (subscriptions or other unneeded spend can be identified – fraud minimized)
-Don’t purchase large nonperforming assets just to reduce tax exposure
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Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/nh41AdbMgxo
Board Member Qualities – Belk on Business – Episode 184
Qualities as a Board Member:
-Experience
-Perspective
-Careful listener
-Willing to be contentious
-Finds satisfaction in the endeavor
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Corporate Transparency Act – Belk on Business – Episode 183
In 2021 as part of the National Defense Corporation Act, the Corporate Transparency Act was enacted. Its intent was to protect national interest against money laundering and financing of terrorism. The objectives to help prevent the misuse of certain types of entities (namely LLCs, corporations and partnerships) by “bad actors” by collecting beneficial ownership information of any entity organized in the US and to create a database of the information in a manner that is useful.
The BOI report (beneficial ownership information) is to be filed with the FINCEN (financial crimes enforcement network) which is part of the US Treasury Department by any reporting company. A reporting company is any company (namely LLCs, corporations and partnerships) that registers with a state’s secretary of state (or state equivalent) or a foreign company registered to do business in the US. Trusts are generally excluded from needing to file the report since they aren’t registered with a state’s secretary of state.
Not all entities are required to file the report. There are 23 exemptions which are mostly companies that are already under some anti-money laundering legislation (mostly financial institutions, government agencies, insurance companies) as well as nonprofits, larger companies, subsidiaries, public utilities, and inactive businesses.
A large operating company is one that has over $5mil in gross receipts in the previous year, has over 20 full time employees and has a physical office in the US.
A beneficial owner is one that has control in an entity. Generally, if an individual owns over 25% of the entity or has substantial control over the entity (has decision making responsibilities such as a senior officer, has board representation or certain financial arrangements). If a trust has substantial control over an entity, the trustee would be considered a beneficial owner.
For entities that were created prior to 2024, the BOI report must be filed by January 1, 2025. For entities created after January 1, 2024, the entity has 90 calendar days to report. Entities created after January 1, 2025 will have 30 calendar days to report. If there are changes to the beneficial owners, an entity will have 30 calendar days to file an updated report.
The following information will need to be provided:
1)Full legal name of the entity
2)Trade name/dba for the entity
3)Address
4)State of formation
5)EIN
6)Full legal name of beneficial owners
7)SS# and date of birth
8)Residential address
9)Active passport or driver’s license
Penalties for not filing are up to $500 per day up to a maximum $10,000. Criminal penalties can also apply.
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Entity Compliance in 2024 – Belk on Business – Episode 182
As we begin a new year, think about where you conduct business at the state and local level (physical location, on site sales, online sales, remote employees)
1)Register your business with any state you conduct business that requires registration (income tax, local tax, sales tax, payroll tax, etc.)
2)Annual report requirements with the Secretary/Department of State
3)Obtain licenses, permits, registrations with local municipalities
4)Corporate Transparency Act – Beneficial Ownership Reports with the FinCEN division of the Department of Treasury
5)Generate a list with timeline reports need to be filed and paid (payroll taxes, sales tax, federal tax returns, state tax or franchise tax returns, other state and local filings)
6)Know what triggers a compliance action (new employee, new type of revenue stream, new business location, locations where selling products or providing services, remote and online sales)
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YouTube: https://youtu.be/z1LFYsR-oCY
When is my Business Considered a Hobby? – Belk on Business – Episode 181
IRS Section 183 outlines what activities not engaged in for profit and the tax implications. The IRS states that a business has to be carried out “in a businesslike manner” with “complete and accurate books and records,” says the IRS. The taxpayer must put in time and effort “to show they intend to make it profitable,” and has to depend on income from the activity for their livelihood. Section 183 says that if an activity is a not-for-profit hobby, then the taxpayer can’t take deductions for it.
The IRS also says a business must show a net profit for three out of its first five years of operation, otherwise the agency considers it a hobby for tax purposes. This rule is not the only deciding factor when making the analysis.
There are other considerations such as:
Did they make a profit from a similar activity in the past?
Does their current endeavor profit in some years and by how much?
What is the activity and why are they doing it?
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YouTube: https://youtu.be/0RJLwfUHq9g
J.D. Rockefeller, Purpose and Numbers – Belk on Business – Episode 180
John D. Rockefeller considered the wealthiest American in US history defined part of his purpose as follows: “It has seemed as if I was favored and got increase because the Lord knew that I was going to turn around and give it back”
It was said by historian Michael D. Simmons that Rockefeller was “singularly gifted to acquire massive amounts of wealth precisely to use the money to do God’s work in the world. Rockefeller always adverted to his own adherence to the doctrine of stewardship – the notion of the wealthy man as a mere instrument of God, a temporary trustee of His money, who devoted it to good causes.”
Rockefeller started his professional career as a bookkeeper. He has a fascination with numbers and understood that knowing and understanding them was paramount in measuring performance, identify opportunities and plan for the future. He talked about how he put faith in the numbers. They provided the following:
1)Guided decisions
2)Saved ones from fallible emotions
3)Gauged performance
4)Expose fraud
5)Ferrets out hidden inefficiencies
He was quoted as saying, “In an imprecise world, they rooted things in a solid empirical reality”.
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Top Common Bookkeeping Issues – Belk on Business – Episode 179
1)Invoice and receipt tracking
2)Handling of expense reimbursements
3)Proper classification of employees
4)Monthly reconciliations
5)Data handling
6)Sales tax and income tax exposure
7)Handling of petty cash
8)Too few or too many accounts
9)Handling bookkeeping internally without oversight or review
10)Ineffective communication
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2023 Year-End Tax Planning – Belk on Business – Episode 178
Topics:
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Ordinary and necessary expenses
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Hiring minor children
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Business travel
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Classification of expenses
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Business start up and expansion
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Bonus depreciation
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Augusta Rule
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Auto expenses
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Meal expenses
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Home office deduction
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Retirement accounts
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Section 105 medical plans
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Health savings accounts
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Defined benefit plans
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Business structure and taxation
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ROBS
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Tax loss harvesting
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Real estate taxation
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Real estate professional status
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Material participation
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Solar and other investment tax credits
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Form 8300
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2024 Beneficial Ownership Information filings
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Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/hPFa9e0nmN0
Five Plans Everyone Needs – Belk on Business – Episode 177
1)Spending plan
2)Compensation Plan
3)Savings Plan
4) “What if” Plan
5) Debt elimination plan
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Reasons Businesses Fail Pt 4 – Belk on Business – Episode 176
1)Poor management or leadership of team
2)Poor treatment of customers and/or vendors
3)Lack of diversity of thought
4)Not focusing on and leading with your differentiator
5)Failure to plan for your future or the future of the business
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Reasons Businesses Fail Pt 3 – Belk on Business – Episode 175
1)Not enough knowledge of the numbers
2)Poor tax management
3)Poor decisions regarding debt
4)Wasteful spending
5)Failure to protect equity
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Reasons Businesses Fail Pt 2 – Belk on Business – Episode 174
6)Not taking ownership
7)Failure to be purposeful regarding work-life harmony
8)Poor time management
9)Failure to take adequate risk
10)Poor evaluation of customers
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Reasons Businesses Fail Pt 1 – Belk on Business – Episode 173
1)Losing sight of purpose.
2)Stop investing and developing.
3)Poor leadership and management
4)Spending time on tasks that we aren’t good at or don’t push the business forward.
5)Failure to be kind.
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Meaningful Communication with Team Members – Belk on Business – Episode 172
Much of our communication with our team involves tasks and the best leaders and managers also spend quality time having conversations with team members on what matters most to them. Most employees want to please their employer if the vision is clear and the culture is one that includes good collaboration and sincere care.
Topics to include to have meaningful conversations with team members:
1) Metrics that matter to the company – what KPIs are they responsible for and how does their role in the company play in the company’s performance. Am I just a pawn in someone else’s game or does what I’m doing matter?
2) What goals do you have that we can help you achieve? What career path does the individual desire? Some are happy with a low stress, repetitive workflow and others want to be challenged and pursue promotions within the company. Try to have a good understanding whether the employee truly desires to stay at your business long term. If your business is a steppingstone for the employee, allow them to do so and use them to train their successor.
3) How do we get our customers? Whether through marketing channels, networking, referrals, etc.) What is the lifetime value of a customer? This can help the employee understand how their service impacts the company if that customer is lost or retained.
4) Value and respect of time.
5) Educate instead of telling. Allow for feedback, don’t create unhealthy competition in roles that would create discouragement instead of motivation.
6) Communicate what you are trying to say multiple times in multiple ways.
7) Have impact moments with your team instead of using surveys or lengthy meetings to get feedback as to whether there is alignment with the company’s vision and goals.
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YouTube: https://youtu.be/XpzadOpLZS8
IRS and Taxpayer Service Improvements – Belk on Business – Episode 171
The Inflation Reduction Act provided about $79 billion in long term funding for the IRS. The primary goals were to improve phone and correspondence response, increasing audits on taxpayer making over $400,000.
The IRS has begun initiatives to improve how it serves and communicates with taxpayers, especially for low- and middle-income families and small businesses:
1) Improving the audit process for these taxpayers by more audits to be correspondence audits handled through phone and email with a single IRS representative using an improved case management system currently under development
2) Improved systems to allow taxpayers and their representatives to access their records
3) Using more and improved technology to move from paper to digital (tax returns and correspondence) – already seeing this with the IRS to accept more forms electronically as well as the IRS using more secure email and systems for communication
4) Simplifying and speeding up the installment agreement process – IRS initiative for taxpayers to be able to establish an agreement with a singular phone call to the IRS and minimize any need for production of documents or negotiating.
Concerns:
1) The IRS has not and is not currently working with professional organizations that work with taxpayers in developing and executing the initiatives. Further, no plans as far as proper independent assessment of the effectiveness of the initiatives in the future.
2) With the improvement with more technology and more centralization of data, there isn’t clarity on how the IRS plans on protecting taxpayer data and how it plans on collecting and using taxpayer data
3) Proper recruitment and training of employees, not only on understanding the tax code, IRS policies and procedures but also use of the technology
4) Will the systems provide better transparency and communication with Congress, other government departments and taxpayers?
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IRS Enforcement and Improvements – Belk on Business – Episode 170
The tax code and implementation are to get us as taxpayers to act in a certain manner. Last year the IRS was granted an additional $79 billion in funding over the next ten years. Broken down into the following areas:
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$46 billion for enforcement “to determine and collect owed taxes, to provide legal and litigation support, to conduct criminal investigations (including investigative technology), to provide digital asset monitoring and compliance activities, to enforce criminal statutes related to violations of internal revenue laws and other financial crimes, to purchase and hire passenger motor vehicles.”
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$25 billion for operations support will support taxpayer services and enforcement programs, including “rent payments; facilities services; printing; postage; physical security; headquarters and other IRS-wide administration activities; research and statistics of income; telecommunications; information technology development, enhancement, operations, maintenance, and security; the hire of passenger motor vehicles.”
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$5 billion – system modernization funding will go towards several projects, including “development of callback technology and other technology to provide a more personalized customer service but not including the operation and maintenance of legacy systems.”
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$3 billion – taxpayer services programs such as “pre-filing assistance and education, filing and account services, and other services.”
Objectives from IRS Strategic Operations Plan, 2023:
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Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible
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Quickly resolve taxpayer issues when they arise
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Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address the tax gap
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Deliver cutting-edge technology, data, and analytics to operate more effectively
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Attract, retain, and empower a highly skilled, diverse workforce and develop a culture that is better equipped to deliver results for taxpayers
Issues:
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How will the IRS protect taxpayer rights?
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The IRS will need to hire more employees which begs the question of how will they find personnel, train them effectively and implement properly?
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There isn’t enough funding for improvement of taxpayer services past the first four years
What does the additional enforcement action mean for us as business owners:
1) Keep proper books and records – know what records you need to keep, how long and how they should be documented. Use technology where possible.
2) Use a licensed tax professional experienced in your industry.
3) When utilizing tax strategies, make sure you understand the pros and cons and use well vetted and reputable individuals and companies for placement of capital.
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YouTube: https://youtu.be/PBL2ZBdLsbo
Land Trusts with Attorney Joseph Seagle – Belk on Business – Episode 169
Joe Seagle is a legal “GPS” for real estate investors and high worth individuals. Mr. Seagle’s law firm and land trust company supports real estate investors, developers, brokers, property managers, and private lenders on their land trust, private lending, and entity formation needs. Practicing law since 1996, he is licensed in Florida, North Carolina, South Carolina, and the District of Columbia. He is also a licensed Florida title insurance agent. More information regarding Attorney Seagle and land trusts, go to his website at mylandtrustee.com
1) There is a lot of confusion regarding trusts. Could you give us a high-level overview of trusts and in what situations they are most useful?
2) Should land trusts be used for an individual’s homestead property or should they only be used for investments properties?
3) Are there any types of investment property types that should not be placed into a land trust?
4) Is a land trust primarily an anonymity tool, asset protection tool or estate planning tool?
5) How does a land trust provide anonymity?
6) How could a land trust provide asset protection?
7) Are there any tax implications for putting a property into a land trust?
8) What protection would an LLC provide over a land trust and is it better to have an LLC be the grantor and beneficiary of the trust instead of an individual?
9) What happens to the property in the land trust if the grantor and beneficiary either ceases operations (if a business) or passes away (if an individual)?
10) What potential land mines or issues could arise if using land trusts such as the lender executing a “due on sale” clause and what is the best way to maneuver through them?
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Mindset of Money: Equity and Business Maintenance – Belk on Business – Episode 168
- How are we managing equity?
Are we bringing in equity participants because the business model is broken (can’t pay operational bills or make debt payments)
Ability to pay yourself a reasonable salary for the services you are providing to your business (does it align with what it would cost to replace your position in the business, and does it cover your personal expenses?)
- How do we handle surplus and reserves?
Able to execute a savings plan to have a comfortable amount of cash in reserves (ideally three months of operating expenses)
Purposeful planning for savings and reserves (goal at Lodestar to purchase larger location)
- Are we able to maintain the business?
Able to invest adequately in the business to properly maintain real and personal property as well as keep the business up to date technologically.
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Are we receiving referrals from existing clients?
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Is our best bringing us their best?
Are you top performing team members bringing you top performing prospects. Team members bringing to us quality people for positions in the company is a picture of a healthy business culture.
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Mindset of Money: Debt– Belk on Business – Episode 167
1) How are we using debt?
2) Debt and bank accounts
3) How are we managing debt?
4) Paying operational debt
5) Fixed assets, depreciation, and loans
6) Owner loans and seed money
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Mindset of Money: Cashflow – Belk on Business – Episode 166
1) Cash flow is rarely defined properly, if defined at all
2) Cash flow statements – coordination and control
3) Cash inflow – good or bad air
4) Free cash flow – measurement of business health
5) Operating cash flow ratio
6) Three metrics to review weekly
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Mindset of Money: Purpose before Profit – Belk on Business – Episode 165
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Your purpose is your legacy.
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When we focus on purpose, people then process, profits will follow.
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Confront the work.
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Mindset of Money: Purpose First – Belk on Business – Episode 164 1. Planning begins with purpose.
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To make purposeful plans, we must first understand our purpose.
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To make purposeful progress in business, we need to know our current position.
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When we know our purpose, it fuels our motivation and becomes the foundation of our vision.
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Growth and Team Development – Belk on Business – Episode 163Once the business is growing and many of the foundational elements have been addressed, the logistics of the business, as it relates specifically to team members, must be continually maintained.-The decision of whether to focus on fewer, higher-paying customers or many lower-paying customers should not be a distraction. The owners and sales team must clearly understand who does and who does not meet the requirements to be a customer. Always be quick to say “no” to someone that isn’t a fit. If you attempt to take on everything, your processes will fall apart and you will lose your ideal clients while trying to serve those who aren’t-Put in processes, utilize technology, and adequately train your team members to allow them to become more efficient at their work and how to have a project management mindset. Training should not only focus on how to do the work, but also on how to manage energy and focus. This may require bringing in outside advisors to address these topics. These types of meetings will strengthen the culture and bring the team closer together.-Always be looking for ways to provide solutions that are transformational.-Establish performance metrics to gauge client satisfaction.Subscribe on these platforms:Apple Podcast: https://apple.co/2Zp6hgj Spotify: https://lnkd.in/gcWDnFZStitcher: https://bit.ly/34aRgO2YouTube: https://youtu.be/y0_74aEFcSI
Proper Business Growth – Belk on Business – Episode 162
Growing a business is not easy. There are always hurdles that range from marketing on one end of the spectrum to meeting or hopefully exceeding customer expectations on the other.
To properly grow a business, there are steps both foundationally and logistically that need to be addressed. This week we will talk about the foundational, next we will discuss some of the logistics as it relates to team members.
Foundationally, the following needs to be analyzed at each step of the growth process:
-Is the avatar clearly defined and does our messaging and fulfillment process align with the avatar. Is there a specific industry or type of client that you are uniquely able to reach
- Be selective and purposeful as to the work or client you take on. Not every opportunity is a good opportunity. Wisdom in business (and in life) is knowing what to say “no” to.
-Have personnel that is in alignment with and is dedicated to the product and customer. Whether dedicated personnel for particular clients or in general personnel is involved with clients as a whole, personnel must be on board with the culture and message.
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Qualities of an Effective Team Member – Belk on Business – Episode 161
-Ability to work independently and collaboratively.
-Mindset is team before individual.
-Comfortable working in the gray areas.
-Can manage stress.
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Onboarding to Relationship – Belk on Business – Episode 160
-Set objectives
-Define deliverables and timelines
-Assign responsibilities
-All involved in the process receives regular status updates
-Project leader focuses on implementation not with day-to-day tasks
-Document client’s policies, processes and approval hierarchies
-How do we improve the business?
-Set quantifiable objectives and how progress is measured and communicated
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Meeting Participation – Belk on Business – Episode 159
When in a meeting, regardless of whether you are holding the meeting or are participating otherwise in the meeting, a few questions to consider as to how and when to participate.
1) How do you show up prepared?
2) Is what you’re saying on point and necessary?
3) Does what you’re saying bring a different perspective to the topic?
4) Is what you’re saying supported by facts or feelings?
5) How do I say what needs to be said in a concise manner?
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Charitable Giving Strategies – Belk on Business – Episode 158
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Contribution Limits
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Qualified Charitable Contributions
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Bunch giving / prefunding
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Donor Advised Funds
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Private Foundations / nonprofits
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Legacy or Planned Giving / Charitable Remainder Trusts (CRUT / CRAT)
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Accountable Plans for Business Expenses– Belk on Business – Episode 157
Some employees will regularly or occasionally pay for expenses for their employer’s business out of pocket and usually have an expectation to be reimbursed. In this podcast, Josh talks about accountable plans, the rules surrounding the plan, rules around documenting expenses and how it can be beneficial to business owners and employees alike.
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Handling Understaffing Issues – Belk on Business – Episode 156
1) It takes time to find the right team member
2) Communicate with your team more frequently
3) Don’t force the work
4) Cross-train
5) Consider outsourcing
6) Use automation where possible
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Preparing for Tax Preparation – Belk on Business – Episode 155
1) Any changes in family status
2) Change in job
3) Change in address
4) Unemployment
5) Retirement contribution or distribution or rollover
6) Social security benefits
7) Bought and/or sold stocks, bonds, mutual funds, etc
8) Virtual currency/cryptocurrency
9) Distribution from inheritance or trust
10) Made or received any gifts over $16,000
11) Property purchased, traded or sold
12) Business records
13) Lawsuit settlements or prizes received, lottery or gambling income
14) Rental income/expenses
15) Health insurance paid, marketplace, medical, dental and drug expenses, medical mileage by month
16) State income tax paid, property taxes, sales tax/excise tax paid on vehicles
17) Home mortgage interest
18) First time homebuyer that took distribution from IRA or repayment/recapture of 2008 credit if home has been sold or change in use
19) Charitable contribution information
20) Educational expenses
21) Student loan interest paid
22) Child or care for disabled dependent
23) Energy credit
24) Bankruptcy
25) Debt forgiveness or property abandonment
26) Any correspondence from the IRS or state
27) Information on foreign accounts
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Finding a Tax Professional for your Business – Belk on Business – Episode 154
1) Make sure your professional is licensed.
2) Do your research.
3) Does the preparer know and use technology for productivity, accuracy and efficiency both internally and for advisory purposes?
4) How responsive are they to client needs?
5) Are they able to make the complex simple.
6) Do they have a good internal culture at the firm level?
7) Are they able to deliver high quality work in a timely manner?
8) Do they have a network that can support and assist both them and you for execution of strategies, processes, etc?
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Ten Organization Tips before Year End – Belk on Business – Episode 153
1) Best path to peak performance is addressing physical, emotional and spiritual needs before the professional every day
2) Organization is a mindset and process
3) Have a process for tracking transactions
4) Have a process for documenting and sharing records, receipts and tax documents
5) Keep the processes simple
6) Use technology
7) Have a set time weekly you work on the finances
8) Have a set place you keep required paper records
9) Talk to attorney and accountant about recordkeeping requirements
10) Have a year-end call with tax professional, attorney and financial planner
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Social Media: The Enemy of Contentment – Belk on Business – Episode 152
1) Comparison (with others) is the enemy of contentment
2) Social media can result in distractions and a lack of focus
3) Social media platforms can end up being a place of competition instead of collaboration
4) Social media keeps us from making best use of our time
5) Social media can put us seeking temporary dopamine hits instead of working on ourselves
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Civil Tax Fraud – Belk on Business – Episode 151
As we begin to see a trend with the law passed this week which has funding for the IRS for increased enforcement action, business owners can use the common areas the IRS as a learning tool to make sure their manner of action, bookkeeping and record keeping is handled in a way to improve the probability of a properly prepared tax return. The tax code in 1955 was 929 pages and today it is over 6,600 pages.
Following are some of the most common, not all, of the areas the IRS generally reviews when looking for fraudulent intent:
1) Dealing in cash - Have a good point of sale system in place, invoices, sequential receipts and always reconcile cash to receipts. Never pay employees, contractors, or vendors in cash
2) Failure to file tax returns – file every year in a timely manner
3) Filing false documents including false tax returns - properly record and report income and expenses and properly issue W-2s, 1099s, etc.
4) Understating income – keep books, invoice clients, document intercompany transactions
5) Keeping inadequate records – understand what the IRS requires as far as record keeping. Keep all receipts, bank statements, credit card statements and make sure receipts are documented correctly. Keep meeting minutes.
6) Giving implausible or inconsistent explanations of behavior – business activities should align with the business purpose
7) Concealing income or assets – using offshore accounts, fictitious names, diverting income to personal accounts instead of into the business account.
8) Engaging in illegal activities
9) Supplying incomplete or misleading information to a tax return preparer – a tax return is the responsibility of the taxpayer, not the professional.
10) Providing testimony that lacks credibility
11) Failing to cooperate with tax authorities
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Five Cs of Business Failure – Belk on Business – Episode 150
Five reasons a business fails:
1) Commitment/Complacency
2) Compromise
3) Compassion
4) Cashflow
5) Conversion
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Prioritizing Financial Direction – Belk on Business – Episode 149
Business owners must evaluate at minimum annually which financial goals will take priority while attempting to balance the other areas to keep the business fiscally responsible.
1) Cash flow for operations and debt obligations
2) Owner’s compensation
3) Equity participants (shareholders, partners)
4) Bank or lender requirements
5) Tax minimization
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Fund Investing with Jack Krupey – Belk on Business – Episode 148
Jack Krupey has been investing in both real estate and distressed debt since 2001. He has built long term relationships with experienced real estate developers, sponsors, and syndicators over his 20-year career. Jack leveraged the 2008 financial crisis as part of a private equity fund that yielded impressive returns off of distressed and restructured debt. He repositioned properties as well as modified and restructured loans for borrowers.
In 2014, Jack entered into a partnership with a large private equity fund and led the asset management arm of the firm that made over 3 billion dollars in purchases of non-performing and re-performing mortgage debt between 2015 and 2019.
An entrepreneur by nature, Jack decided to start JK Asset Management to focus on alternative assets such as value-add multifamily real estate. He then launched the JKAM Diversified Real Estate Fund in September 2020 and is launching a 2nd Diversified Fund in 2022.
Connect with Jack: https://jkaminvestments.com/
1) Tell us about your journey into the world of private equity
2) Why did you decide to start your own fund as opposed to working for another fund company or fund manager?
3) What types of assets do you put into your funds?
4) How does someone setting up a fund go about finding assets, whether nonperforming notes, performing or distressed properties?
5) Why would someone want to invest in a fund as opposed to purchasing a property themselves?
6) What are some of the potential tax benefits someone could receive from investing in a fund (high W-2 income, real estate professional, passive v. active investing/funds)?
7) Many investors get into funds for the tax benefits in year one and for the quarterly payments. Others are looking for a place to put 1031 money, others looking to invest the funds and either looking for appreciation and/or quarterly payouts. How does one go about finding the best place to have this conversation and find a fund that aligns with their financial goals?
8) You’ve worked with entrepreneurs from those operating a startup, to those running a profitable 7, 8 or 9 figure business. What are the top reasons you’ve seen on why a business will succeed or fail?
9) What is the best way for people to connect with you?
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Stepping up the Leadership Game – Belk on Business – Episode 147
1) Expand your network beyond region and profession. Will bring new ideas, perspectives, and challenges
2) Move beyond having mentors and have coaches that will hold you accountable. Coaches provide honest and timely feedback.
3) Shift mindset from focusing on profit to leading with passion and vision. What do you want to be and experience? Focusing on passion bring energy that attracts relationships.
4) Spend time every day improving your skill set. Have focused and purposeful time of improving every day through articles, podcasts, blogs, webinars, and continuing education.
5) Reflect each day on failures. Document what you learned. Think, reflect, plan, and execute. This will bring growth.
6) Invest and train your team to lead clients through influence. Be vulnerable as to your leadership journey, your passion, and your vision. Keep the vision in front of them. Invite them into the story.
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YouTube: https://youtu.be/isCU0nyZ-e8
Maximizing Growth and Profit with Pam Jordan – Belk on Business – Episode 146
Pam Jordan is a no-nonsense financial expert and speaker. Pam specializes in analyzing and streamlining the backend of fast-growing companies as well as efficiently creating more profit and strategic growth. Pam can translate the hidden message your numbers are saying about your business. Pam can be reached at www.pamjordan.com
1) Tell us a little about your journey from working for a company that went up in flames, to working with business owners to put out those flames in their business.
2) Many business owners get into business pursuing freedom. Those owners don’t realize they are going to go from working for a business owner and working 40 hours a week, to working for potentially hundreds of people working 80 plus hours per week. How do you help a business owner define freedom, determine their purpose, and leave a legacy?
3) What role should a fractional CFO or CFO consultant play in the entrepreneur’s journey?
4) We hear the phrase “know your numbers” often. What does that phrase mean?
5) Another phrase we hear often is, “business owners should work on the business and not just in the business”. What does that mean and how does a business owner move from being a full-time owner operator, to being able to spend the necessary time working on the business?
6) What numbers should a business owner know and be monitoring as an indicator that will move them from the profit stage to scale stage of business?
7) You speak of a business needing to undergo an “expense audit” to increase profitability. What does that process look like and what should be implemented as a result?
8) Every business owner will exit their business at some point. If a business owner is looking to eventually sell their business, what should the business owner be monitoring and managing to increase the value of their company?
9) You’ve worked with entrepreneurs from those operating a startup, to those running a profitable 7, 8 or 9 figure business. What are the top reasons you feel a business will succeed or fail?
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YouTube: https://youtu.be/JyF66-bdqxM
The “Be’s” of Business Relationships – Belk on Business – Episode 145
To be effective in business relationships, there are a few “be’s” we should consider:
1) Be present in the moment
2) Be authentic /be vulnerable
3) Be honest
4) Be grateful/be complimentary
5) Be kind
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Internal / External Alignment – Belk on Business – Episode 144
There will be parallels or alignment between how you conduct your business internally with culture and team and externally with clients if your business is going to strive.
Four areas of alignment:
1) How easy is it for clients to do business with you and how easy it for employees to work with you. (communication and technology) Where to you place people in the office so they can communicate easily and work together, how do clients schedule time with you and what platforms do you use)
2) What differentiators are there between you and your competitors in your product and/or service and what differentiators are there in your culture and as an employer? (value, relationship, service). What makes you unique? How do you develop and educate? (Situation with bankers working with clients). How do you innovate? How do you lead (inspiration, empowerment, motivation)? How do you communicate?
3) People do business with you and want to work with you internally and externally because of relationships. This will lead to referrals both from clients and from team members.
4) Does your culture, branding message and execution align? Do they set expectations that are met and exceeded?
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YouTube: https://youtu.be/3butz95x7_g
Family, Dreams and Resiliency with Sean Thomson – Belk on Business – Episode 143
Join my conversation with Sean Thomson of Thomson Multifamily Group as we discuss working with family, Sean’s blueprint of putting dreams into action and the importance of resiliency for success in business.
Sean can be reached at: https://www.thomsonmultifamilygroup.com/
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S Corporation Payroll Guidelines – Belk on Business – Episode 142
IRS requires owners of an entity taxed as an S Corporation to take a salary if the owner does anything more than contribute capital.
The IRS defines reasonable compensation as “the value that would ordinarily be paid for like services for like enterprises under like circumstances”
IRS recommends considering the following when setting an owner’s salary:
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Duties performed
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Volume of business handled
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Character and amount of responsibility
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Complexities of the business
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Amount of time required
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Cost of living in the locality
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Ability and achievements of the individual performing the service
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Pay compared with gross and net income of the business
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Distributions to shareholders
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History of salaries paid to other employees
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Company policies regarding wages
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Processing Entrepreneurial Frustration – Belk on Business – Episode 141
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Do we have the right people in the right roles in the business? Need to consider whether people are truly where they want to be in the business.
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Do we have the right technology and are we using it correctly?
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Are we training properly? Learned that teaching something once or twice isn’t sufficient. Repetition is the key to learning.
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Are we consistent with deliverables? . Most clients prefer something consistent and comprehensive over cutting edge and customized.
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Dealing with Entrepreneurial Frustration – Belk on Business – Episode 140
As entrepreneurs we can get to a position where we are frustrated, feeling sorry for ourselves, questioning whether those around us understand at all the burden and stress of owning a business.
How to deal with frustration during a stressful season:
1) You don’t have the time to focus on what went wrong. Decide what is top priority and conquer
2) Schedule a time to process what happened, how I ended up here. Develop the list of facts, not emotions, of what occurred and its impact on the business
3) Develop a plan that still empowers the team that provides systems and processes that addresses the problem
4) Schedule a meeting with the team to walk through the journey, present the facts of the situation and its impact on the business. Discuss solutions with the team.
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Preparing for an Economic Crisis – Belk on Business – Episode 139
Prepare for an economic crisis resulting from high inflation, market crash, bank runs, national debt default which generally results in a material devaluation of currency by doing the following:
1) Invest in foreign markets that are in a healthy economic position or market cycle
2) Invest in assets with reliable cash flow
3) Diversify savings across different asset categories (currencies, precious metals, stock market, ETFs, real estate, cryptocurrencies, etc.).
4) Maintain some liquid assets
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Taxation of Short-Term Rentals – Belk on Business – Episode 138
Note: Not giving specific tax advice. Meant to be a high-level primer of some of the basics. Consult your own tax professional for specifics as it relates to your tax situation.
Generally rental income from single family rentals in a traditional sense if a residential property is considered passive. Not subject to self-employment tax and has loss limitations based on hours of activity, real estate professional status and tax structure.
Short-term rentals (Airbnb, VRBO, etc.) are
1) Active is rental period is less than seven days or less than thirty days and significant personal services are provided by you or on behalf of the owner of the property to make the property available for rent.
2) Active – can use any losses to offset other non-passive income if you materially participate in the activity
3) Test for active participation:
a) more than 500 hours during the year
b) individual’s activity and activity on the owner’s behalf constitutes substantially all participation in the activity
c) more than 100 hours during the year and individual’s activity is not less than the participation of any other individual
4) Providing services includes concierge services, conducting guest tours, providing meals/entertainment, providing transportation, providing other hotel-like services. Repairs and maintenance or admin work such as paying bills are not considered services.
5) If active and providing services, the activity goes on Schedule C of personal tax return (if sole proprietor or SMLLC) and subject to self-employment tax. If passive, goes on Schedule E
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The Five Mutuals for Effective Business Relationships – Belk on Business – Episode 137
1) Mutual core values – commonality of purpose and values that underly manner of operating and relating
2) Mutual respect – individual/company hired for skillset. Is there a trust when there is a lack of clarity or understanding?
3) Mutual listening – both parties let the other finish thoughts, listen to understand, not to react. Good communication across platforms
4) Mutual agreement – deliverables and expectations
5) Mutual understanding – no perfect relationship but willingness to work together through difficulties to achieve success. Both parties desire to see the other succeed.
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Relational or Transactional Business Model – Belk on Business – Episode 136
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Evaluation of business model and core values – all decisions in business from what we do to why we do it to with whom we work should filter through core values
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A transactional business model is built on the short term. It is a model that the business does whatever it takes to make a sale many times neglecting what the customer really wants or needs. A transactional business model is focused purely on profit resulting in poor relationships with customers, employees and vendors. They advertise and market consistently.
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A transactional business model works best if price is the main decision point of the prospective buyer. When a customer is purchasing mostly on price, they will generally return. A relational business model is broader as to its approach and focuses more on overall customer satisfaction and experience.
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A relational business model starts with a goal of building a long-term relationship with the client by determining what the client truly needs and wants and putting the wants and needs of the business secondary.
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You allow the customer to buy on their own terms (no high pressure or manipulating or scare sales tactics)
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Valuing and cultivating the relationship comes first in a relational business model. The transactional business generally just meets the minimum expectations of the customer. In a relational business model, you will deliver value first, under-promise as opposed to over-promise and even easily tell a client that you may not be the best option. You will have resources and referrals that align with your core values that can help the client achieve their results or goals.
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A relational business model may not hit profitability as quickly as a transactional one, however, a relational business has a much higher probability of achieving profitability and impact in the long term.
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A relational business model generally has a much better internal culture which can make a greater external impact in the community it serves.
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A relational business model will generate loyal customers that send you referrals that come to you already understanding a little how you make people feel.
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Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/_-BOTCtB-vQ
Clear Numbers, Clear Direction – Belk on Business – Episode 135
1) Clear vision and goals - know where you are going so you know what to measure
2) Clear picture - have a process in place to provide a clear picture of the numbers – a budget to control the numbers with performance indicators that measure and direct performance
3) Clear decisions – use the numbers as a tool in decision making
4) Clear direction – unleash your company’s earning potential with strategic approaches, systems and advisors
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/MzI_fvndcyo
belkonbusiness #business #joshbelk #podcast #clarity #numbers #control #finances #accounting #kpis #performance #indicators #vision #goals #decisions #direction #earning #potential #strategy #systems #advisors #entrepreneur #entrepreneurship
Looking to the Future – Belk on Business – Episode 134
1) Do you have a clear vision of what your business looks like 5-10 years in the future?
2) Do you have or can you develop the talent and leadership necessary to get you there? Most of the people (customers, vendors and advisors) who helped you get to where you are at now may look much different than those who will help you get to where you want to go.
3) Determine the type of client or customer that will help you get there
4) What specific operating system needs to be implemented?
5) What processes and technologies are needed to get you there?
6) What marketing and sales plan is needed?
7) What elements of your culture are essential to get you there (training/learning, confidence, and accountability)?
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/BfkMNGPKHig
belkonbusiness #business #joshbelk #podcast #future #leadership #entrepreneur #entrepreneurship
Caring for Your Website with Robert Simmons – Belk on Business – Episode 133
Connect with Robert regarding his Website Partner Program: https://thehatmen.com/
Here With the Ears YouTube channel: https://www.youtube.com/c/HereWithTheEars
Robert joins the podcast today to talk about the importance of having a website, what information should you have on your website, how to communicate through a website, the importance of speed and serving the user and its impact on search engine optimization and conversion, and how he developed a website partner program to make sure your site is and remains compliant and secure. Lastly, Robert talks to us about perseverance in business.
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/qT_KIW2msOA
belkonbusiness #business #joshbelk #podcast #robertsimmons #thehatmen #websites #seo #marketing #communication #conversion #compliance #security #entrepreneur #entrepreneurship
Measuring Employee Satisfaction - Belk on Business – Episode 132
Less than 20% of employees feel their leaders communicate well
Less than 20% of employees feel their leaders provide enthusiasm
Less than 25% of employees feel their leaders measure performance in a way that motivates them
What KPIs are you measuring for satisfaction?
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Employee fulfillment or satisfaction should be measured by asking employees how satisfied they are with the current workplace, how well does the workplace meet your expectations and how close is the workplace to an ideal one?
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Factors that impact satisfaction are opportunity, mission and values, rewards and recognition, organizational structure, leadership style and skills and business competitiveness
The more an employee makes, the less increases in pay impact satisfaction in the workplace
Invest in employees in a way that engages them. Putting people in a place where their skills meets purposeful experiences and relationships. A place where their emotional paradigm, purpose and knowledge intersects.
More people want growth or development over promotions, rewards and recognition.
Act as a coach with your team members, not as a boss or manager. Provide feedback, care and purposeful development over just instructing, informing and general training.
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/3IV9PQQtzTI
belkonbusiness #business #joshbelk #podcast #entrepreneur #entrepreneurship #employees #development #team #communication #enthusiasm #performance #kpis #satisfaction #opportunity #mission #values #rewards #recognition #emotions #purpose #talent #skills #competitiveness #management #coaching #knowledge #promotion
On this podcast, we discuss the role that debt plays in our personal finances and business finances, the emotions surrounding debt, mindsets regarding debt and the road to either bondage or freedom. The podcast concludes with the two practical action items every business owner needs to possess a proper paradigm towards debt and achieve financial health in the long term.
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/PVyC5Wg_ELk
belkonbusiness #business #joshbelk #podcast #debt #bondage #freedom #finances #financialhealth #entrepreneur #entrepreneurship
Becoming Your Own Administrator and Trustee on Your Retirement Account with Saen Higgins – Belk on Business – Episode 130
Connect with Saen and become your own retirement plan administrator: www.qrpcall.com
Saen Higgins, owner of Association for Optimum Achievement since 1996 is the world’s most sought-after teacher and public speaker on the topic of Tax Deed and Tax Lien Certificate investment. He started his career in finance as a stockbroker. Later became a financial planner and developed his own strategy investing in tax lien certificates. Saen’s passion ranges from assisting clients build and protect their wealth to photography and family.
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Tell us a little about your background
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In your journey, while a financial planner, you discovered an overlooked way an individual can generate income using tax lien certificates and tax deeds. Tell us about that journey and how it became your passion to the point you developed an entire education and coaching program.
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While someone is accruing wealth, they need to make sure they are protecting their wealth. What is the role of retirement accounts in asset protection?
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Most people use a broker, third party administrator or custodian for their retirement accounts. Is this necessary and what are the hurdles one faces when dealing with third parties, especially if they are wanting to self-direct their retirement?
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You have worked with bankers and attorneys to develop a solution to the problems one faces when working with third party administrators and custodians. Could you tell us about this solution?
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How can a person invest their retirement funds?
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What can one do within this structure?
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What responsibilities do I have within this structure?
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There has been a lot of talk about setting up an LLC and having a checkbook IRA which has drawn the attention of tax courts and Congress. Is having a checkbook IRA a good idea and how does becoming one’s own custodian and trustee differ from having a checkbook IRA?
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Please tell us a little about prohibited transactions and what should some practically do to make sure they avoid any prohibited transactions?
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You’ve worked with hundreds of entrepreneurs from solopreneurs trying to figure out how to become profitable to 7, 8 and 9 figure businesses. From your experience, what are the top reasons why a business succeeds vs. fails?
-
If someone wants to reach out to you, how do you prefer they connect with you?
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/H5Q7VS3eDXk
belkonbusiness #business #joshbelk #podcast #saenhiggins #retirement #qrp #401k #sep #taxdeed #taxlien #investing #finances #wealth #administror #trustee #selfdirected #retirementplan #realestate #entrepreneur #entrepreneurship #powerroom
Setting Benchmarks to Reach 2022 Goals
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One can have resolutions or even goals for your business but benchmarks and timelines for success need to be set
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What does success look like for you?
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Focus on the identifying the person you need to be so to reach the goals you have set.
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Set up personal and business calendars and budgets that direct you towards hitting benchmarks.
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/L9pGXzJtVLI
belkonbusiness #business #joshbelk #podcast #entrepreneur #entrepreneurship #2022 #accounting #budget #kpis #benchmarks #cashflow #development
21 Year-end Tasks for 2021 - Belk on Business - Episode 128
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Review licensing requirements – business, sales, and industry specific licenses
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File annual reports with your state’s secretary or department of state and/or make any necessary amendments for changes (address, officers, etc.)
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Hold annual board meeting and prepare and file meeting notes
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Conduct inventory count as of December 31
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Review large purchases for capitalization requirements. Review fixed asset count
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Review aged accounts receivable for bad debt or collection
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Review accounts payable for any possible adjustments
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Review other current liabilities (payroll and sales tax)
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Confirm loan balances
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Review personal vs. business nature of transactions
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Review and properly book any funds received through grants or federal/state relief
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Reconcile all bank and credit card accounts
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Reconcile prepaid accounts and accruals such as payroll
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Reconcile point of sale reports with revenue and deposits
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Make sure all bonuses, retirement or other employee benefit requirements are paid according to employee contracts or company policies
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Compare budget to actual and trending to identify any material variances and abnormalities
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Reconcile PTO balances for any liability adjustments
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Scan or file all receipts and supporting documents
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Generate backups of all important data and retain pursuant to data retention policies
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Prepare budget for next year
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Review policies and procedures
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/nqRm5i8Xjv0
belkonbusiness #business #joshbelk #podcast #entrepreneur #entrepreneurship #yearend #2021 #accounting #compliance #budget #policies #procedures
God as my CEO with Glenn Stromberg with Stromberg Investment Group
Glenn for four decades has been a leader in manufactured homes on land, “the best kept secret in real estate investing” changing the conversation and paradigm of how investors and homeowners view mobile homes. Additionally, Glenn works with investors in building and maintaining wealth through real estate.
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You are originally from the Chicagoland area. This area is known mostly for having hard-working, blue-collar workers. Your dad instilled in you a work ethic that you took with you into your entrepreneurship journey. Please tell us about your journey from Chicago to starting your investment company.
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You are known for leading with authenticity and trustworthiness. What core values should a business owner possess if he or she is going to succeed for decades in business?
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What can you share from your journey to help an entrepreneur that is struggling to see a profit?
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What can you share from your journey to help an entrepreneurship that is working to scale the business?
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You’ve been an entrepreneur and investor through a number of business cycles, including the 2008 financial crisis. How should a business owner prepare for the next recession or crisis?
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You have been and are a leader in changing the conversation and paradigm as it relates to mobile home both as a residence and investment. How does someone become a leader in changing a paradigm?
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The first time I heard you speak, you talked about mobile homes and your journey but what was more intriguing to me was the philosophy you hold in your business and personal life, talking about God’s role as a CEO. As we enter 2022, what can we learn from this that we all should consider as it relates to how we run our businesses and live our lives?
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You’ve worked with hundreds of entrepreneurs from solopreneurs trying to figure out how to become profitable to 7, 8 and 9 figure businesses. From your experience, what are the top reasons why a business succeeds vs. fails?
-
If someone wants to connect with you or learn more about what you do, what is the best way for them to connect with you?
Connect with Glenn Stromberg: https://www.stromberginvestmentgroup.com/
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/t_7J9ApDMuk
belkonbusiness #business #joshbelk #podcast #glennstrombert #stromberginvestmnets #wealth #investments #mobilehomes #ceo #success #entrepreneur #entrepreneurship #powerroom
Tom Laune with Bulletproof Wealth – Tom is described as “The leader in guiding real Estate investors to become their own banker”. He does this by solving the problem of low returns and increased taxes when storing money in a traditional bank by creating a line of credit using specially designed life insurance.
We hear a lot about legacy strategies but a lot of misunderstanding as it relates to what this actually means and what such things as “overfunded life insurance” or “infinite banking” mean and how they work.
1) What is infinite banking?
2) Who should be using this strategy?
3) IRA/401(k)s can be used to lend to others but can’t be used in my own company without serious tax implications. How does this strategy allow me to use my cash to grow my company?
4) Besides lending to my company, what are the other ways I can use the money?
5) What are the tax implications both with the premium payments (both the premiums and paid in additions) as well as the principal and interest loan repayments?
6) Your Bulletproof Wealth program is more than an infinite banking program but takes a more holistic approach to one’s financial legacy. What is involved in building Bulletproof Wealth?
7) You’ve worked with hundreds of entrepreneurs from solopreneurs trying to figure out how to become profitable to 7, 8 and 9 figure businesses. From your experience, what are the top reasons why a business succeeds vs. fails?
Connect with Tom to Bulletproof your Wealth: https://bulletproofwealth.info/
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/pCDvbTELXi8
belkonbusiness #business #joshbelk #podcast #tomlaune #bulletproof #wealth #infinitebanking #investments #lifeinsurance #wholelife #legacy #finance #success #entrepreneur #entrepreneurship #powerroom
Conversation with Andrew Cordle as we discuss the reasons businesses and business owners succeed or fail, hurdles a business owner must face to scale a business and the use of media for branding. Andrew is among many things an entrepreneur, speaker, author and wealth strategist. Host of Money Is podcast and a owner of a number of different types of companies from tech, collectibles to real estate. His number one strength is building relationships and connecting people.
Connect with Andrew on Instagram: https://www.instagram.com/andrewcordle/
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/jbYZkAFbjnU
belkonbusiness #business #joshbelk #podcast #andrewcordle #success #scale #branding #socialmedia #entrepreneur #entrepreneurship
Rules to Determine if Employee or Contractor
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Business owners attempt to avoid the additional work of paying someone as an employee as well as making FICA contributions and unemployment tax by classifying workers as contractors instead of employees.
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The penalty for misclassifying a worker as a contractor instead of employee can be up to 35% of the payments made to the wrongly classified worker plus interest.
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Independent contractors paid over $600 must be issued a 1099-NEC by January 31 each year. A business should be collecting a W-9 from the contractor before paying the contractor so to have the contractor’s name, social security number or employer identification number and address. A 1099-NEC should be issued to all individuals, partnerships or LLCs taxed as a disregarded entity or partnership.
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To determine how an individual should be classified, the IRS has a form to assist in determination. IRS Form SS-8 provides factors the IRS uses to determine how an induvial should be classified. These factors include:
o Do you or can you require the individual to comply with instructions as to the when, where and how of the work?
o You train the worker to perform services in a particular manner
o You integrate the worker’s services into your business operations
o You require the worker to render services personally; the worker can’t hire others to do some of the work
o You hire, supervise and pay assistants for the worker o Your business has a continuing relationship with the worker or work is performed at frequently recurring intervals o You establish their hours of work or require the worker to devote the majority of the work week to your business o The worker provides services on your premises o You require the worker to do the worker in a sequence that you set or require the worker to submit regular reports as to the work performed o You pay the worker by the hour, week, or month unless they are installment payments agreed to in the worker’s contract o You pay for the workers business or traveling expenses o You furnish tools, equipment and materials o You have the right to discharge the worker at will and the worker has the right to quit at will
In order to prove a worker is an independent contractor:
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Have a written contract that specifies the responsibilities of both parties, how payment is to be determined for each job and include language that the contractor can hire his or her own assistants
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Require the contractor to furnish the tools, equipment and material needed for the job
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Make it clear the contractor is free to offer services to other businesses
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The contractor does most, if not all the work, at their own location
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Pay for work by the job, not by the hour, week or month
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Require the contractor to submit invoices for each job before you make payment
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Require the contractor to show proof of a business license and insurance
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/rnTJ07KLs9o
belkonbusiness #business #joshbelk #podcast #tax #taxes #employee #contractor #compensation #taxlaw #taxrules #payroll #employment
Enhancing Brand Awareness
1) Focus your efforts on your niche’ – have you identified your audience? Do you know your audience?
2) Social media content should be short and relevant to your audience whether written content, videos or infographics
3) Use blogs and newsletters to provide longer form content to get into the details of what you’ve learned that can help your audience
4) Write articles for industry publications
5) Manage your online reputation. Ask for reviews. If you produce content, people will criticize you and even troll you. Don’t respond. Allow for those you receive value and are your fans post reviews.
6) Speak at events that reach your audience, whether at a local meetup or larger national stage. This places you as the expert and forces you to improve your craft and fully develop your thought process and implementation of ideas.
7) Produce educational videos and webinars.
8) Sit on advisory boards
9) Host a podcast
10) Write a book
Subscribe on these platforms: Apple Podcast:
https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/kkfOiBAJ4EU
belkonbusiness #business #joshbelk #podcast #focus #effort #niche #audience #avatar #socialmedia #content #relevant #articles #publications #reputation #reviews #value #speaking #expert #thoughtprocess #education #educationalvideos #webinars #advisory #advisoryboards #brand #brandawareness #awareness #book #writing
The Intersection of Business and Personal
Your personal life effects your business and to be effective in using your business to make a personal impact, one must manage the business and personal effectively. There is no such thing as work – life balance, only work – life fluidity f
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How you show up effects your culture – bad culture results in high turnover, poor attitudes and poor performance.
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The areas in your personal life that has a direct impact on your business performance and culture are:
a) Adequate sleep
b) Proper diet
c) Regular exercise
d) Healthy relationships -
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To be effective in impacting employees, clients and even vendors, the extent of your ability to coach them on how to practically use the skills you’ve developed will determine the extent of your impact.
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Many business problems stem from the personal. If you can’t manage your personal finances, it will result in you draining your business of cash. If you can’t manage effectively your relationship with spouse and children, you won’t be able to manage effectively your business relationships with employees and clients.
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The degree you are able to make an impact in the lives of others is the degree we are willing to make ourselves uncomfortable.
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Consider hiring a coach or coaches that have a holistic approach, that understands health, relationships and business and how they interact.
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/lWwYQn54rO4
belkonbusiness #business #joshbelk #culture #performance #impact
Depreciation for Real Estate with Tom Olson - Belk on Business - Episode 121
Active Turnkey Podcast: https://www.youtube.com/channel/UCbD9r69ntVcU8KEiGNUEODg/videos
Subscribe to Belk on Business on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/MUpfWdZVW_8
belkonbusiness #business #joshbelk #tax #accounting #finance #realestate #realestatetaxation #passiveincome #activeturnkey #podcast #depreciation
Profit First with David Richter – Belk on Business – Episode 120
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What is profit first?
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What mistakes to business owners make consistently?
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What does it mean to “know your numbers”?
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What numbers should a business owner by looking at?
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What are a couple things a business owner should start doing today to improve the financial health of their company?
David’s book “Profit First for Real Estate Investors” can be ordered online on Amazon.
Link to David’s Simple CFO Solutions website and more information on the book:
https://simplecfosolutions.com/profit-first-david-richter/
Subscribe to the Belk on Business podcast on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/DysTicWo7jA
belkonbusiness #business #joshbelk #podcast #profitfirst #entreprenuer #entrepreneurship #numbers #finances #financialhealth #davidrichter #simplecfo #simplecfosolutions #lodestar #lodestartax
Don’t Eat the Fruit
“Don’t capture the spoils of your wealth. Eat some fruit, save some fruit, give some fruit and plant seeds”
1) Cultivate the tree – tree needs water and sunshine. Water by developing and investing in yourself and the skillset of you and your team. Sunshine represents self-care, getting proper rest and exercise.
2) Personal financial principles … Post tax … budget, save, give, and invest. Within the investing percentage – apportion to aggressive, moderate, conservative. Diversify with investments
3) Businesses can take a similar approach – budget, save, give, invest. Budget to include owner salaries, operation costs, inventory needs and planned expansion or scaling. Saving should include funds needed to expand or scale beyond planned expansion in the budget. Plan for giving. Investments should be diversified.
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/L0OhBtsA4E0
belkonbusiness #business #joshbelk #podcast #wealth #cultivate #team #investing #diversification #budget #save #give #invest #scaling #expansion
Mindset to Exit
1) Humility – ability to take direction to address leadership weaknesses (internal) and issues related to the business (external)
2) Holistic understanding of all aspects of the business – management, marketing, operations and finance
3) Honesty as to performance – numbers don’t lie - in time all strengths and weaknesses will be identified and it’s best to be transparent about them.
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/wTGa9AogWv4
belkonbusiness #business #joshbelk #podcast #mindset #exit #exitstrategy #humility #leadership #holistic #management #marketing #operations #finance #honesty #performance #numbers #strengths
Deeper into the Numbers
• Cash - Were internal controls related to cash followed? Was spend approved following internal processes? No one should have unilateral control over cash…different person for approval, spend and reconciliation processes. Is there a cash overage or shortage based on projections? Review spend against budgeted thresholds. Review spend on the balance sheet.
• Inventory balances – Were internal controls related to inventory followed? Purchase orders approved, random verification of items purchased either on the floor or sold or obsolete.
• Review collection cycle – aged accounts receivable balances Review accounts receivable. Is the collection cycle improving or lengthening? Is our sales and collection process clear? Do we need to send clients to collection? Do we have the right clients?
• Review debt (short term and long term) – Review credit card balances, lines of credit as well as long term debt. Were these accounts reconciled and all debt paid according to terms? If there was an increase or new accounts, was there adequate approval and reasoning for the increase?
• Review liabilities to ensure adherence to compliance (payroll tax and sales tax filed and paid timely)
• Confirm transactions of a personal nature to ensure proper accounting treatment to the equity section. Is owner(s) taking cash from the business? Asset protection or compliance issues.
• Review recurring expenses – are there opportunities to decrease expenses? Are there recurring expenses or contracts that need to be ended. Review accounts such as utilities, rent, computer and internet, dues and subscriptions and insurance. Be aware of lapses contract periods or a vendor change.
• Review Gross Margin – a material fluctuation may indicate categorization mistakes or flaws in inventory management. • Review customer acquisition costs – marketing and sales process working or needs improvement?
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/xYQN9DGV5do
belkonbusiness #business #joshbelk #podcast #numbers #cash #internalcontrols #process #inventory #collections #accountsreceivable #debt #credit #liabilities #expenses #grossmargin #customeracquisition
Money Is ... with Andrew Cordle
1) What Money Is
2) What our spending tells us about ourselves
3) The love of money
4) Simon the Sorcerer
5) What money can't buy
6) The results of greed
7) The fallacy of generational wealth
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/x6kY-KxB6UI
Full Money Is interview: https://www.youtube.com/watch?v=pQfKwq0INMc
belkonbusiness #business #joshbelk #podcast #success #andrewcordle #moneyis #greed #wealth #money #spending
Why Business Owners Succeed w/ Andrew Cordle
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/wxUn8ROn6SQ
Full Money Is interview: https://www.youtube.com/watch?v=pQfKwq0INMc
belkonbusiness #business #joshbelk #podcast #success #andrewcordle #moneyis
Client Onboarding
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Consistent and comprehensive process for the team
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Relevant and comprehensive to the client
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Timely – schedule soon after sale
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Organized – script and process for the meeting
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Personal feel for each client
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Exceed client expectations
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/JxrB0qDZ3oM
belkonbusiness #business #joshbelk #podcast #client #onboarding #relevant #comprehensive #timely #organized #process #scheduling #expectations
Financial Metrics for Scaling
- Product/service deliverability – speed which work is completed and customers receive deliverable within expected time…measure of efficiency
2. Inventory turnover ratio = cost of goods sold over average inventory
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Payback period = customer acquisition costs over monthly revenue times gross profit percentage
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Client margin = revenue – employee wages – other direct costs divided by revenue
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Brand demand and brand trust (lifetime value of customer increasing, monthly recurring revenue increasing, retention increasing, customer acquisition costs decreasing, conversion rate increasing) Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://lnkd.in/gcWDnFZ
Stitcher: https://bit.ly/34aRgO2
YouTube: https://youtu.be/CYpdLWNyNmI
belkonbusiness #business #joshbelk #podcast #finances #metrics #accounting #profit #product #service #deliverables #inventory #ratios #payback #clients #margin #brand #lifetimevalue #revenue #acquisition #costs #conversion
Financial Metrics for the Profit Phase
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Retention rate and churn – Retention rate - customers that keep using your product or service over an extended period of time and make repeat purchases. Net negative churn - the revenue gained is higher than the revenue lost from churn. A business that can’t replace customers or revenue faster than it loses customers or revenue will eventually become unprofitable
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Gross profit percentage – the revenues need to be growing at a higher percentage than the cost of producing the product or service
-
Operating profit percentage – Gross profit less operating expenses – if increasing, profit is increasing
-
Owners pay at a reasonable level that supports lifestyle and tax exposure
-
Tax exposure - tax exposure and strategies analyzed quarterly
-
Financing costs – impact of interest and collection costs monitored monthly and reviewed quarterly or annually depending on the type of business
-
Average revenue and profit per customer– know what type of customer provides the most profit so you can focus more of your marketing to reach that customer and focus development
-
Average revenue and profit per product/service offering – focus development in these areas. Evaluate complementary products and services. Subscribe on these platforms:
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belkonbusiness #business #joshbelk #podcast #finances #metrics #accounting #profit #retention #retentionrate #churn #revenue #grossprofit #ownerspay #taxes #finance #devlopment
Branding
1) What exactly is a brand and how is it different than marketing?
2) I happen to like my branding, how do I know when I need to update my brand’s image?
3) What questions do I need to have answered when developing a brand? (mission, core values, color theory)
4) What role does my company’s story play in my brand image and messaging? (tell story in video)
5) What role should my customers play in my brand image and messaging? (brand is for the customer, ask good questions, how do you feel about the people, the brand)
6) How do I know if my brand is communicating the message I want it to deliver? (by its success…strong following such as Apple, Starbucks, etc.)
7) How do I increase brand recognition? (make client feel like they connect with the brand…do they feel like they connect?) 8) When do I need a personal brand or should I just use my company’s brand on everything I do?
Manny can be contacted at https://www.crownmediagroup.com/
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belkonbusiness #business #joshbelk #podcast #brand #branding #marketing #branddevelopment #brandimage #brandrecognition #personalbrand #lodestar #lodestartax
Financial Metrics for the Growth Phase
The growth phase is the second phase or stage of business’s life cycle. Sometimes called the perseverance or survival stage. The main problem a business in this stage faces is understanding the relationship between revenue, expenses, and cash flow. The entity usually has enough revenue to match expenses but struggles with enough cash flow consistently to cover debt obligations and finance growth. Returns on time and capital are marginal and the owner is still filling many seats in the business. The primary KPIs a company in this phase needs to monitor are KPIs that drive growth – how are we reaching prospective customers and how are we monetizing them? From a financial perspective, some of the most metrics a company in this phase should be monitoring:
-
CLV:CAC – lifetime value of the customer to customer acquisition cost ratio. Generally, this ratio, in many industries, needs to be 3:1 for sustainability. Determine what the ratio is in your industry and modify as necessary for your particular business for business sustainability. (customer lifetime value is average sales amount times number of transactions times gross margin times retention rate) (customer acquisition costs is total expenses to acquire customers divided by total number of customers acquired)
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Monthly recurring revenue increasing. MRR generally will increase when there is a repeatable sales strategy, understanding your most effective lead channels and addressing pain points in the sales funnel. Sales and fulfillment processes should be documented, followed, and improved.
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Gross margin increasing. Gross margin is your net revenue less the cost of goods sold. Net revenue is your gross revenue less discounts and returns. Cost of goods sold are the costs directly related to the production of the product or service (generally material and labor). If your gross margin is increasing, you are able to keep more of your capital to pay administrative costs, debt obligations and for future investment. This can be done in several ways such as changing the pricing model, decreasing churn, decreasing discounts, decreasing returns, decreasing costs to produce the product or service, increase efficiency and good internal systems and processes to control inventory.
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Break even point – there are three general methods to calculate the break even point but generally this is the amount of revenue needed to cover both fixed and variable costs.
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Cash runway – the length of time which a company can remain solvent. Answers the question… how long can we operate with the cash we have? Calculation (cash/burn rate). If this number is not lengthening, the business will not progress to the next stage and will eventually regress to the start-up phase and most likely fail altogether. The break even point focuses on the P&L whereas the cash runway will pull in the cash needed to pay debt obligations as well.
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Financial Metrics for the Startup Phase
-
Budget to actual spend. The business in the phase needs to establish a budget on how it is going to spend the funds invested or raised for the timeline the owners have established for this phase.
-
Revenue – this includes not just top line revenue but also measuring monthly recurring revenue. How much revenue is needed to make this business profitable and how much revenue and revenue growth is needed to reach the point to where this enough revenue to cover costs?
-
Burn rate – how much cash am I spending each month
-
Cash runway – the length of time which a company can remain solvent. Answers the question… how long can we operate with the cash we have? Calculation (cash/burn rate)
-
Customer acquisition costs – how much does it cost to acquire a customer?
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Customer lifetime value - what revenue will be generated from each new customer? If recurring, monthly recurring revenue churn (amount lost due to cancellations, returns or bad debt) is part of the calculation
-
Recovery time – how long does it take for us to recover the cost of acquisition?
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Gross margin – revenue less cost of goods/services sold – this margin needs to be high enough to cover administrative or overhead costs for the company to be profitable
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Reaching Customers through Emotion - Belk on Business - Episode 108
Foundationally, a business to succeed in the long term must deliver to the customer what they want. To either help them tell their story or add value to their story. In my accounting firm our goal is to “serve clients by helping them develop and understand their financial story in a holistic manner”.
If we are going to reach our prospective customer, we need to first determine how we are going to insert our product or service into the customer or client’s story. If our client is value driven, that conversation and method of reaching the customer is going to look a lot different than one that needs more personal attention and is willing to pay a higher price.
Bottom line, are you looking for a transaction or a relationship with your customer? This will determine how you will reach your customer. When you build relationships and properly cultivate them, referrals come easy, and you don’t need to spend much on traditional advertising methods. If you are transactional, you still need to understand what role you play in the customer’s story and reach them where they are at.
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belkonbusiness #business #joshbelk #customerservice #advertising #marketing #emotion #podcast #customerrelations #finances #story #value
The Hiring Process with Austin McCurdy - Belk on Business - Episode 107
Topics Covered:
-
Core values and culture
-
Employee quality vs. pay
-
Hiring from within or outside the company
-
Predictive indicators
-
Interview process
Austin McCurdy, Owner, Sharper Personnel
austin@sharperprocess.com
https://sharperprocess.com/personnel
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Structure and Taxation for Real Estate Investors - Belk on Business - Episode 106
Ful Active Turnkey Podcast: https://www.youtube.com/watch?v=itBnrvKVJyc&t=1759s
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Cutting Costs
-
Develop a budget with savings plan and follow it. What gets ignored will never be followed.
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Evaluate your physical footprint – remote working, use of space, negotiate lower rate, purchase location.
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Evaluate staffing needs – how much time are your employees spending on essential vs nonessential activities (use software to track), make good hires (spending more on good employee will reap greater benefits than paying less to try to save costs), get rid of dead weight (entitled employees).
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Do you have a product or service you can use to barter with client or vendor?
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Evaluate vehicle costs – do you need it?
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Negotiate with suppliers and seek alternatives – eliminate vendor dependency.
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Evaluate effectiveness of marketing/advertising – stop what isn’t working
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Insurance costs – shop policies annually, multi-lines discount, personal and business with same company).
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Implement effective tax strategies
-
Lower debt options (credit card, LOC, refinance).
-
Use cloud-based software to reduce IT costs.
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Paying Myself as the Owner - Belk on Business - Episode 104
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What is the entity structure? Single member LLC/sole proprietor…cannot have payroll, only draws. Set aside 25-30% minimum for taxes. Guaranteed payments for multi-member LLC owners or partners of partnership, not payroll. LLCs taxed as S-Corp or S-Corp…owner should be on payroll, distributions as approved and documented by owners
-
What do other businesses in my industry and market pay for the position? What would it cost to replace me in the business?
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What do I need to support my lifestyle? Am I taking draws beyond my payroll on a regular basis to support my lifestyle or am I paying personal expenses with business funds?
-
Does the IRS care?
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Getting the Team to Think Like CFOs - Belk on Business - Episode 103
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Ask questions that make them think beyond the transactional. Get them to think with a strategic lens. Be transparent with numbers so they understand their role in the overall financial picture of the company to create a buy in .
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Teach them to look for ordinary moments all can learn from that can result in an increase in profitability or efficiency.
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Balance people skills with head down work ethic. What opportunities do they see that can be communicated with the client?
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Put focus on the client relationship first and the deliverable second. Relationships allow for deeper conversations and a higher and longer return on investment.
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Be patient with your team. This process will take time. Invest in planting seeds that improve culture. Give plenty of examples in meetings with your team of how the thought process works.
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Eliminating Competition - Belk on Business - Episode 102
“At the end of the day people won't remember what you said or did, they will remember how you made them feel.” -Maya Angelou
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When you get a hold of people’s emotions, they will flock to you. people are ruled by their emotions
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People want to feel positive, happy, and accepted
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You don’t need the best product or service but have to have a product or service with a brand with messaging that makes people feel a certain way
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Issues In Your Business from a CFO's Perspective- Part 3 - Belk on Business - Episode 101
1) Where to invest cash to increase revenue?
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Cost per lead
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Invest in infrastructure (point of sale system to increase efficiency)
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Invest in developing your people to increase knowledge, efficiency and improve problem solving skills
-
Sales training
2) Pathway to obtain more money to invest in growth? How much is needed?
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Operational costs low, sales up, cash flow strong – indicator for scaling
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Business line of credit vs equity investors vs venture capital – investors can bring connections and advice in addition to cash
-
Break even analysis to determine cash needs
3) Scenarios
- What if scenarios to determine how decisions can impact budget, revenue and expenses, scaling, refinance or sell, market opportunities, scaling opportunities
4) How do you get customers?
- Referrals, network, more from existing customers (retention), partner with other businesses, online presence (website, SEO), content production and distribution, community
5) What does it cost to service customers?
6) What are operational and fixed costs
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Issues In Your Business from a CFO's Perspective- Part 2 - Belk on Business - Episode 100
Issues:
1) Sloppy record keeping
2) Fiscal management
3) Revenue and profit projections
4) When to hire?
5) Where to cut costs?
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Issues In Your Business from a CFO's Perspective- Part 1 - Belk on Business - Episode 99
1) Lack of internal controls - who is providing oversight?
2) Mismatched accounting platform with industry or required output and deliverables
3) Owners loose with handling equity
4) Not securing and protecting intellectual property
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CFO Direction in Each Business Phase - Belk on Business - Episode 98
Early – accounting ecosystem, tax compliance, cash forecasting, economics/pro-forma
Investment – internal controls and reporting, tax credits and incentives, institutional controls, three-year projections, cash burn and KPIs
Cash flow – accounting platform and processes, revenue sourcing (tax implications), liquidity, budgets, sales efficiency
Scale – execution oversight, 3-5 year plan
Monetize/Exit/Succession – due diligence, liquidity risk, capital structure, key valuation metrics.
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What Drives your Compass?
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Identity (insecurity)
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Security
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Power
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Leisure
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Passion
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Purpose
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Legacy
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Impact
How you handle money is a metric to what controls your compass and to your true core values. Look at how you are allocating your dollars and it will be a picture of what you truly view as important.
The love of money is the root of all kinds of evil. Pride drives our need for “things” to establish our identity in front of others
There is prudence in saving and every business and individual should have a savings plan. A fool spends everything he earns
Are you clear as to your purpose and the purpose of your business? Are you investing dollars back into your business and into your people?
What does “freedom” mean to you?
We all leave some sort of a legacy. What will yours be?
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Organizational Alignment
When there is alignment in an organization, the organization has the highest chance to win. Without alignment, even with the best of intentions, the organization will not be capable of implementing their business strategy, will have poor customer attraction and service, poor employee morale, poor corporate culture, and financial underperformance.
When individuals and organizations look to align with another, they look to see if there is a sustainability mandate.
For a business to succeed, there must be strategic alignment in the following areas:
1) Culture – alignment between employees and organizational values. Core values more than a list on a wall but put into action by each member of the organization. Each member of the organization must hold the organization’s mission as their own.
2) People – engage people in success – an organization where they can invest their time, energy and talent. Developing people so they can grow as individuals.
3) Systems – does the business have alignment with processes, use information technology for communication and efficiency, identify and execute using accurate financial performance indicators
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Leadership and Impact
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Making an impact is contingent on having a mission beyond serving customers, building employees and making money. What is the delineator/distinguishing areas of impact the company, employees, clients and network would connect?
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Making an impact requires alignment. Do we have systems in place to make sure that behavior aligns with purpose and culture? How do we reward alignment? Do we have measurables to bring attention to purpose, accountability and culture? Where there is alignment there is impact. Whenever there isn’t alignment, frustration ensues.
-
Making an impact requires leadership to set the tone. If leadership is focused on managing and not leading, focus becomes clouded and impact will be stunted. Most leaders spend less than one day on long term strategy and most leadership teams spend less than one hour per month on strategy.
-
Making an impact requires the ability to make hard choices. Procrastination is natural and awareness and process to combat is essential to achieve a growing impact. Leadership must have specific actions that are communicated with those in the company, clients and network to move towards reaching those “impact goals”.
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Lessons from Grandma:
1) Caring
2) Authentic
3) Responsive
4) Affectionate
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Growing a Business in 2021
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Clear goals with organized process for growth
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Embrace transformation with a resilient corporate culture (trust, inclusivity, purpose, innovation)
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Focus on sales training, exceptional service, cross selling and leveraging data
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Pursuit of excellence in three different areas within niche
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Training programs focused on digital
-
Hire diverse people with diverse skills
-
Position employees as experts who have valuable insights
-
Provide educational, thought provoking content (weekly email, social media, podcast, webinars, experts, blog, white paper).
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An Overlooked Key to Success - Humility
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Be humble enough to be wrong and handle rejection - be open minded
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Be humble enough to accept when a customer seeks other direction/advice - the customer/client’s victory is the end result and should be our victory
-
Be humble enough to ask for forgiveness
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Conversations with Your Accountant (Part 3)
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A deeper dive into your KPIs – example: analysis of personnel costs per client/customer
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Use of network for solutions – example: succession, exit, estate, business, and tax planning – accountants have other professionals to help address needs (attorney, service providers, brokers, tax specialists, business valuation specialist, coaches)
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Mergers, acquisitions or expansion into new products, services or into new territory
-
Personal or professional issues – a listening ear – motivation, the fallacy of work/life balance – accountants work with many different types of people with different types of businesses and can provide unique insight and support.
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Conversations with Your Accountant (Part 2)
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Cash flow – How is your business’s current cash flow? What is burn rate? What cash flow is needed for maintenance and expansion? Cash is the oxygen every business needs to survive.
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Contracts – do budgets, plans and changes align with language in contracts. Balloon payments, covenant violations, etc. can derail budgets and plans if not aware of language in contracts.
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Negotiations or opportunities – is there an opportunity for better terms – bank loans, vendor relationships, tax credits, etc.
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Staffing concerns – who is leaving? onboarding needs or concerns, employee retention and employee training.
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Capital improvements, fixed asset and personal property needs. What is an expense vs. investment? Every outlay of cash should have a dollar value and/or purpose assigned to it.
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Conversations with Your Accountant (Part 1)
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Review of financial statements. Owners focus mainly on P&L or metrics that generate emotion. Confuse key process indicators with key performance indicators. Finance team can be good and generate good P&L and balance sheet but usually not the best at interpreting the data for the owner. Having the conversation with you accountant gives you an outside perspective, takes emotion out of the discussion and helps identify opportunities you would otherwise miss.
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Review of variances. This can be any process or performance indicators. Cost overruns, employee inefficiencies and changes in the market are examples of areas that can be identified when working through the comparative figures…monthly and annual comparatives
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Trending. Looking at income, expense, asset and liability accounts to see what is trending up and down. This also will help provide a perspective as to weaknesses, inefficiencies and opportunities.
-
Taxes. Tax planning is not a once or twice a year conversation but one that should be held quarterly. Are quarterly estimates being paid, are there opportunities that you could pursue to minimize exposure? Are you following the plan? Are there changes which you need to be aware?
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Future. What is the plan for the future of the business? Your lifestyle plans should also be part of the conversation. If you need more money out of your business to support your lifestyle, this needs to be part of the business planning conversations. What needs to happen in the business now to support future opportunities and goals?
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Leading and Responding in Crisis
Genesis 42:1
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Famine in the land (moment of crisis)
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Food available in Egypt
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Jacob says to his sons “Why are you standing around looking at each other?”
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Failure of leadership to plan, teach a logical thinking process and how to respond to crisis
Every business will face times of crisis. Jacob, known for being a “go getter” became complacent after the life of his wife, The sons had become complacent and didn’t want to leave their comfort zone. Complacency breeds complacency. The crisis was not a man made crisis but there is always a man made response to any crisis.
-
Plan for crisis – savings plan, succession plan, survival plan
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Develop team with critical thinking skills – the solution should have been obvious. It was obvious to the leader but the followers didn’t see it. They may have reacted or simply did not react at all due to fear, they may have not been taught or simply may have been complacent and expected the leader to fix their problem
-
Involve team members in decision making process – explain the why and how, the process of making decisions. This can be simplified if the vision is clear and there is a buy-in by the team.
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Staying Relevant with Customers
Once you have engaged a client or customer, a business must continue to keep itself in front of the customer and can do this several ways:
-
Be unique – true to your differentiators. When you sold the customer on your and your product or service, there were differentiators that made them chose you. Be more than your customers were expecting and bring something even unexpected that helps that client remember you.
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Provide value –Your customer expects you to live up to their expectations and solve their problem but what can you do to exceed the expectations? What can you do or give that makes the customer feel that you gave them something well beyond that they paid for?
-
Cross sell – do you have other products or services that can help the customer reach their goals.
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Use your network – when your customer has a want or need and your company does not provide that service or product, is your network vast enough you can connect them to that person who can fill that want or need.
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Be the the person that other people want to work with. The best customers come from referrals and when you can attract new customers, you attract new work, new ideas to diversify your service offering and customer base and attracts new people to your network or you to other people’s network.
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Biden’s Tax Proposals
-
Increased individual tax rate for individual taxpayers with income above $400,000
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Increased capital gains rate for those with income over $1,000,000
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Repeal of SALT deduction
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Death as taxable event
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Limitations on itemized deductions
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Phaseout of QBI deduction
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Payroll tax increase for taxpayers with earnings above $400,000
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Increased corporate tax rate
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Repeal of like kind exchanges
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Tax on unrealized gains
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Why People Buy
1) Reputation
2) Business Acumen – good judgement quickly
3) Asks Good Questions
4) Differentiators – what sets you apart
5) Listened – seek to understand before being understood
6) Feel Special – pay attention to what is important to them personally
7) Likable Team – feel comfortable with others in the office
8) Agree with Summary (evaluation of problem)
9) Pre meeting planning (shows you care)
10) Environment (professionalism)
11) Knowledge of Business/Industry
12) Adds Value – what do we provide that we don’t charge for or client would even expect
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Stitcher: https://bit.ly/34aRgO2
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Holding Sales Meetings
1) Initial Rapport
2) Agenda – key points of differentiation
3) Key questions to identify pain points/challenges
4) Confirm pain points/challenges
5) Set second meeting or terms for engagement
Key Questions/Discussion Points:
1) Tell us about your business
2) What areas do you excel?
3) Why are you uncomfortable with current provider/solution?
4) What areas of business may require special attention?
5) From what your saying, you would like our support in the following areas…
6) Share case studies of how you’ve helped others
7) This is what working with us looks like
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Five Areas of Growth
1) Leadership
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Ability to connect different talents and perspectives
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Ability to question the status quo
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Ability to hold one’s self and others accountable
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Ability to manage and not avoid risk
2) Technology
- Hindsight, insight, foresight, project/workflow management, and communication
3) Talent – right person/right seat
4) Process – a work process and a process for generating and filtering ideas, funding projects and business scaling
5) Development – product/service and people
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Exodus 12 gives us a story about the start of a New Year. The Lord provided a plan for deliverance, a purpose for his people and the people were required to prepare for the victory. This applies to our businesses as well. As we take time to look back over 2020 and forward to this new beginning in 2021, we can consider doing the following:
1) Develop a plan for deliverance from that which we need to stop and a plan for reaching our goals in the new year. We may need deliverance from debt, toxic employees, a poor marketing strategy or overspending on nonessential items.
2) Develop goals that align with our purpose. How are we going to develop our people, improve culture, enlarge our influence, become more focused on those values and deliverables our business is uniquely qualified?
3) Empower our people to prepare for reaching those goals. Determining not just what our team members are able to do or like to do but empowering them to make improvements in themselves, the business and reach their own personal goals.
If we as business owners plan for the future by stopping those activities and mindsets that create barriers, have a clear purpose not just for the business but understand the purpose of each person on our team and empower those people to prepare themselves through giving them the tools necessary to become high performers, everyone wins.
Hold a strategy meeting first week of the new year to align business, technology, innovation and service/product offerings. Discuss the 2021 plan, purpose and steps of empowerment.
2020 has been a rough year for nearly everyone. Some clients have hit business goals, but most made modifications to simply survive through this time. Freedoms have been taken away and our businesses and personal lives have been put through a stress test.
During this holiday time, it is a time for us to take all the effort from our business business to focus on the most important business we have, the business of showing up and being present in our personal relationships.
This year has seen divorce, suicide, addictions, and illness all on the rise. Personal relationships are falling apart. Some of my own relationships have come close to becoming frayed to the point of becoming irreparable. Seems to be so much focus was on the health and survival of my professional business that the personal business became neglected because of the failure of taking all the knowledge we have on how to build a business and have failed to apply it to our family business.
During the holiday season, we can work on our family business by doing the following:
1) Cultivate relationships – we invest into our own development and the development of our team. We can take the cultivation of ourselves and team and apply it to our family. We can take time to watch programming or take a course together with our spouse to help our marriage, help us be a better husband or wife, a better parent.
2) Be present – We spend time with our team putting together a holiday party, investing our time into their lives to help improve culture. We can do this in our homes by building something with our children. Take them with you as you go out shopping, visiting people in the community. Spend time in the kitchen with your spouse and bake cookies. Play games.
3) Ask good questions and listen with purpose – we carefully listen to our team members and clients to make sure we direct our team and clients. We should also purposely listen to what our family members say so we can get to know them better. Develop a list of questions to take on a date that are fun and allow us to understand the other better, whether a spouse or child. Many times, the best time to ask questions is while doing at the same time such as playing games, baking cookies, going for a walk.
4) Invest in others – the best investment we make with our business are the lives we influence for good whether with our time or finances. We invest in the causes and purposes we care about and our employees care about. This is part of the purpose of our business. We can do the same with our homes. Take time to invest in the lives of someone who needs help or encouragement, together as a family.
Measuring cash flow is basic arithmetic. What is my cash balance at the beginning of a month less my cash at the end of the month? If the amount increases, my business had positive cash flow. If negative, negative cash flow. Dunn and Bradstreet research shows that businesses have a 44 percent higher chance of survival over five years if it carefully plans and manages its cash flows. Cash flows increasing or decreasing can be a result of any number of reasons. Following are two reasons, both related to accounts receivable:
1) The timeline to collect accounts receivable is greater than the timeline of payables. If a business has only one month of cash but it takes two months to collect receivables, cash will trail receivables by one month. Depending on the spread between A/R timeline and A/P timeline, profit margins and the amount of cash spent that only hits the balance sheet determines how long a business can operate.
2) Similarly, if it takes months longer to collect on receivables than the timeline to produce a product, the business will be operating at a negative cash flow until such time as there is enough margin retained in cash to eliminate the cash deficit. Some companies will resort to obtaining inventory loans to cover the spread, but this does lengthen the time that it will take for the business to have a positive operating cash flow position.
For a business to start and remain in a positive operating cash flow position, managing its receivables is essential. Increasing cash inflow by making sure invoices are remitted timely, have a process and a person responsible for collecting receivables. Decrease outflows by keeping overhead costs under control, eliminate all non-essential expenses as much as possible and have a savings plan in place for future investment into the company for growth and health.
There is much misunderstanding of the definition of cashflow and its relationship as to the actual health of a business. Cashflow is essential for any business, it is the lifeblood of your business but unless there is an understanding of both the myths and facts of cashflow, your business will bleed out.
Common statements and myths regarding cashflow:
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If I have more sales, I will have more cashflow
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If my business is profitable, I will have adequate cashflow
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If I have cash in the bank, I will have good cashflow
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Managing cashflow is someone else’s job. (bookkeeper, CFO, accountant)
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If I need more cash, I will just get another loan to float the business for the short term.
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People owe me money so my cashflow will be fine eventually.
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My business lives from week to week like my employees and my business is small and it is just the way small business works.
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I have a budget so my cashflow will be fine if I follow it.
The key is figuring out your “free cashflow” and learning how to manage the cashflow well so your business can be healthy.
Bookkeeping and Recordkeeping Requirements
1) No requirement as to how you keep your books, but you are required to keep books. Methods include ledger sheets, spreadsheets, online bookkeeping software, desktop bookkeeping software and industry specific software with accounting functionality
2) If books are not kept, the IRS can charge a 20% accuracy penalty
3) Keep income tax returns along with proof of mailing or filing (delivery receipt, e-file verification) indefinitely
4) Keep supporting documents used to compute income and expenses (invoices, receipts, etc.) for three years from filing for two years from payment, whichever is later
5) Keep employment tax returns along with proof of mailing or filing indefinitely
6) Keep supporting documents for payroll tax return computations (payroll ledgers, timesheets, receipts for payment of employee benefits) for four years from filing the return.
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One of the most important qualities a business owner must have is focus. The more qualities of a visionary a business owner possesses, the more difficult it can be for that business owner to focus on objectives
A business owner must focus on the following:
1) Purpose – the purpose is what you do and why you do it. This needs to be front and center in the way you communicate internally and tell your story externally
2) Consistency of message – if messaging internally and externally is confusing or conflicting, the brand message will be confusing. All communication and messaging must be consistent with your purpose so employees, third parties and customers know who you are and why you do what you do
3) People and processes – a company may have a COO or integrator that manages processes and people but the roles and processes themselves need to be a focus of the owner. Are the right people in the right seats and are the processes followed, efficient and managed well?
4) Empowerment – allowing those to whom you delegate roles and responsibilities to do what you have hired them to do. Developing your people to perform at their peak level.
5) Relevancy and responsiveness at the personal and company level – always be connected to the product or service, connected to the people, and improving both as the leader and developing those who work with you. Product or service remains relevant.
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YouTube: https://youtu.be/IwNJg79bDLM
Key People Indicators – Third Parties (Vendors, Contractors and Consultants)
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Surveys can reveal indicators on whether our actions align with our shared values and what we desire culturally for our company. Shared values could include the following: if we are living up to our promises, go beyond what is expected and communication of processes.
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These can also help determine our effectiveness communicating
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Review sessions or surveys can ask the following questions to help provide indicators as to our effectiveness with values and culture with third parties. On a scale of 1-10…
1) Do we provide what you asked from us including appropriate payment?
2) How well did we keep to deadlines?
3) Did we do whatever extra was required?
4) When you needed us, how easy was it to get to the person you needed?
5) How well did we handle unexpected changes?
6) How well were you kept apprised of the processes?
7) How likely are you to recommend us to others?
Employee review sessions and surveys can reveal indicators on whether our actions align with our shared values and what we desire culturally for our company. Shared values could include the following: if we are living up to our promises, go beyond what is expected, communicate processes, and purpose and provide the helps necessary for the present and future development.
These can also help determine our effectiveness communicating and how well we are providing the support helps that our team needs from leadership.
Review sessions or surveys can ask the following questions to help provide indicators as to our effectiveness with values and culture with our team members.
On a scale of 1-10…
1) Do you feel you can be transparent with team members? Do you feel physically and psychologically safe?
2) Do you feel you can be transparent with leadership? How comfortable do you feel in approaching leadership with issues, problems, or mistakes?
3) How well do you feel your opinion is valued by team members?
4) How well do you feel your opinion is valued with leadership?
5) How well does leadership and the company in general fulfill its promises to you?
6) Are responses and feedback given timely by leadership?
7) Do you feel leadership will do whatever it takes to keep you happy, challenged and growing?
8) Do you have a clear understanding of what is expected day to day (including daily tasks and from project to project)?
Key Performance Indicators – KPIs are the dashboard used by leadership to make decisions as it relates to performance.
Like a dashboard on a car, if an owner or manager spend their time staring at the dashboard, the car will end up off course and will crash. They are merely an indicator, not an end unto themselves. The indicators should result in any necessary changes to people, process, and profit to improve a company’s health. Don’t fall into paralysis by analysis.
Daily KPIs are 2-3 numbers looked at to see if the actual work is on target. These may include daily revenue, work in progress/percentage of completion, cash received, cash disbursed, bank balances, receivables, payables, etc.
Weekly KPIs may include such items as accounts receivable past due, accounts payable past due, lead generation indicators. Looking at lead generation indicators is a lag indicator that generally would not be reviewed more than weekly
Monthly – P&L, balance sheet, cash flow statement, bank reconciliations and bank statements. Comparative financials and trending metrics
Quarterly - Comparative financials, trending metrics, tax planning
Annual – budget to actual spend and preparation of budget for next year, final tax planning
Mindset and Metrics| Belk on Business - Episode 73
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Mindset is impacted by what we read, those we allow into our world, and life experiences.
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What we allow to influence us will ultimately result in affecting our paradigms.
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Our legacy should begin with family first.
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In business, we must avoid the extremes of aloofness or paralysis by analysis.
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Profit is not the most important metric of our business. It is not the best indicator as to the health of a business.
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As we move through the stages of business, moving backwards and focusing on our legacy will help a business owner to begin with the end in mind.
Elements of Starting a Business
1) Clearly identify and define the problem that I am trying to solve? Is this a problem that people will pay for a solution? Is it something they want or need?
2) Define your avatar/target market. Who has the problem?
3) Who are my customers? Who has the problem and who will pay for the solution?
4) Who are my competitors? Are you operating in the same space or are you creating a new space?
5) What are my differentiators? Why would someone buy from me over my competitor?
6) How am I going to distribute my story? Social media, podcasts, local meetups, boots on the ground?
7) Build out a business plan with budget and timelines.
8) How much funding do I need? How am I going to pay it back? Do not overfund as it can result in complacency.
9) Who can help me? (People, process, product, purpose)
Basics of Attracting and Keeping Customers:
1) Communicate purpose, not just the product or service offerings
2) Have deep conversations to understand their problem, not just address the product or service the customer thinks they need. This requires listening with purpose and a deeper level of knowledge of your product or service
3) Communicate with transparency – know the limits of the product, service and your personal limits. Be true to your word and don’t overpromise
4) Keep professional boundaries – relationships will be ruined if personal and professional lines are blurred. Keep employees aligned with your business’ core values without feeling like they are employees of the customer.
5) Give meaningful expressions of gratitude. When giving gifts, make sure they align with your company’s values and the values of the customer.
Conversation with special guest, Manuel Corazzari, host of the Know your Mission podcast. DIscussion on how we can know our mission through experiences, gifts and community.
Five Areas for Effective Communication – Meetings with our teams should include at least one or more of the following elements:
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Relevance – Why are we doing what we are doing? We should ask ourselves frequently “why am I doing this?” What is their role in the business and their role beyond just profitability? Bring awareness of wins. Many times a problem we are working through will bring us back to one of the following areas:
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Business-mindedness - Beyond just what are we measuring but how do we think…what should our mindset be? What is our mental process when having conversations with customers, vendors, and each other? Does our manner of conversation and action align with our core values?
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Innovation -What technology could make us more efficient or assist in improving communication with customers, vendors, and each other? What processes can be improved?
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Quality – What can be done to improve the deliverable whether product or service? What can be done to increase the value we provide to our customer?
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Empowerment – Giving the authority, power, and permission to act. People want to know you trust them to make good decisions and support them. Our responsibility is to provide the framework as to how we act and think, provide the developmental tools to improve and keep the vision and mission in front of the team.
Personal Finance Stability Indicators
Nearly three-fourths live paycheck to paycheck. Three in ten adults have no emergency savings. Two-thirds of Americans are one major catastrophe away from bankruptcy.
1) No credit card or unsecured debt
2) Have and follow a budget
3) Monitor net worth including equity positions in business investments
4) Savings rate of 15%
5) Two months of expenses in reserves
6) Insurance and plan for medical expenses
7) Life insurance – six to ten times your salary
8) On target for retirement
Transitioning to Leadership
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Manage your own growth. – Set a one year and five-year growth plan. Engage the assistance of a coach and be actively involved in at least one mastermind. This helps to bring awareness to blind spots or weaknesses. Always be reading. Always be learning. Allow for constructive criticism/feedback. Leave your ego at the door.
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Monitor financial and time investments. – Develop and monitor the indicators that are necessary to monitor and manage not only the financial and process side of the business, but the personal side as well. (investment in family)
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Develop your own brand(reputation) within the overall business brand. People need to trust you and value you before they will trust and value your team.
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Develop a growth plan for your team. You are ultimately responsible for your growth and the growth of your team.
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Lift your lid of knowledge in marketing, business development, people development, finance, process, etc.. Learn to delegate. Identify who should be transitioned into a different seat (strengths/weaknesses) Develop a review and oversight process, follow up processes. Become a planner and not just a doer. Look for areas of growth.
In order to empower our team members, we must be a conduit of connection in a few key areas
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Connection to the work – providing clear direction as well as the tools and information needed to get the work done
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Connection to their own well-being – be a leader that listens and truly cares about their well-being. This includes developing/coaching the team and provide opportunities for growth both in the business and personally
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Connection to the team – commitment to quality, good friendships, and freedom of input
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Connection to possibilities – an understanding and pathway to the greater good, the future, the mission and purpose of them personally as well as the business
As a business owner the biggest key to provide connection is to actively listen to each individual team member. Make it a goal to listen on purpose for at least one minute per day, ask more questions than you answer and respond with gratitude and praise for feedback.
Finding Insight
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Insight is a deep understanding of ourselves, of others, and of a situation.
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Insight is needed to make better decisions that will lead us to reaching our goals.
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How do we find insight or make steps towards reaching a level of deep understanding?
1) Start with your vision – Begin with the end in mind. Maintaining focus will help us remain motivated in seeking the insight and understanding what is necessary to move us toward our goal.
2) Stay out of the weeds – Take a step back from a situation and think at a high level. Staying out of the weeds means we take responsibility for stepping out of our comfort zone. Committing to making different and better decisions than we have historically, learning to become a better listener and trusting others to assist us on the journey. Moving out of our comfort zone can lead us to procrastination which is a resistance we will have to fight within ourselves.
3) Face your fears – Fear is another resistance we will face when we attempt to step out of our comfort zone. We may feel inadequate, humiliated, defeated, abandonment or even betrayal. Understand your fears, face them, and stop playing it safe. Move closer to your goals.
4) Do not overindulge in overthinking. We can end up in paralysis by analysis when we develop too many possible solutions. Limit your solutions after thinking through possible scenarios, then act. When you determine your best possible solution, the next best solution can serve as your contingency plan.
5) Who and what can help us whether to bring clarity or achieve results? (consultants/coaches/technology)
In business, we will be brought in to clean up someone else’s mess and to be effective and achieve success will be the point person to take ownership of providing solutions to problems or messes we did not create. How do we clean up messes effectively?
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Identify the real problems and possible solutions? This may require a causation vs correlation analysis and dig into finding the true cause of the problem we are trying to solve. Peel away emotion and deal with the facts. Politics operates in the realm of correlation, problem solving operates in the world of causation
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What did the prior person/team do that caused the problem?
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Talk to owners/employees to ask for clarity as to pain points they feel need to be addressed?
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Review the solutions the prior individual/team provided and provide new solutions and new alignments (vendors/consultants)
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Be patient and don’t move too quickly. This can cause for a decrease in morale and people to become unnerved
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Documents the problem and map out the solution process
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Always be encouraging the team
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Never criticize the prior team
Putting people first is essential to developing a winning team with a culture where people have a sense of belonging and can thrive
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Communicate with clarity and purpose. If you don’t speak with clarity, confusion results. Example: email with missing elements
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Coordinate – plug people into positions where they have the capacity to excel – set them up for success (do they have the desire and aptitude?) – Do what you love and love what you do
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Cooperate – spend time with your team, get involved in their lives. Be creative with participation (what can they bring unique to a meeting or to the culture?)
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Cultivate – help develop your team members. Develop or improve their strengths or skills. What gifts does your team member have that can help in both their work and even in other areas of the business or what does your team member need (mercy, recognition, encouragement, giving, service)
Employees may either ask questions verbally or through their actions when they feel uncertain as to purpose or unclear as to their position
1) What is the point of what I’m doing? Where does my role and duties fit in the larger picture? – go deeper than the org chart to define how each individual plays a part in the overall purpose of the organization
2) How do I apply what I’ve learned? - give practical application in team meetings or individual training
3) Have I learned what I was supposed to learn? – give clear instructions as to the growth goals for each person and your plan in helping them grow.
4) Am I able to find my mistakes before my superior? If I find them or my superior finds them what was the cause? – don’t use mistakes to punish but to teach (will produce a culture of transparency and development)
5) Is the deliverable and timeline for this project clearly defined?
6) Do I bring value to my superiors and to the client? – regularly be providing encouragement as to what they’re able to provide that someone else can’t (relationship or knowledge) both with clients and with employer/employees
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Give direction not orders – don’t micromanage or demand tasks be done your way. Give direction as to the process, the why/purpose and the value it brings to the customer.
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Correct failures by educating – everyone who wins failed many times to get there. Every failure is an opportunity to learn. Celebrate failures and successes. When we failed, we learned one more way not to do something.
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Track performance against goals so to reward successes
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Delegate with boundaries (brings clarity to purpose and duties) – who does what and for what purpose
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Equip with tools and techniques – have regular training and encouragement sessions
The role and responsibility in society is to try to enhance communities and be a positive voice, a collaborator, a convener, a listener, an empathizer, an educator, a volunteer, a sharer, and an innovator. – Howard Schultz
At every turn, let us choose to replace meanness with kindness; pettiness with significance; hate with love; gridlock with compromise; complaints with creative solutions. Be tough but not at the expense of others. Be a champion and celebrate those with strength and character – the upstanders amongst us – those where actions and intentions echo the behavior of the past, who strive for honesty in the present and who are reimagining the promise of America – Howard Schultz
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We must listen to understand not to respond. Howard Schultz sat down to listen to his employees and shaped the future culture of Starbucks.
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We must speak to edify not to hurt or harm. Sarcasm is generally demeaning not humorous and is usually a tool used when we are insecure. How is employee morale affected by my words?
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We must speak to direct not to destroy. When we fail to direct, we fail to lead. The vision and processes must be communicated clearly and plenty of education and direction given to bring them along on the journey. When bringing others along for the journey, we allow them to succeed as well.
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Have a safe workplace where people feel safe to be vulnerable and share their struggles and personal visions/goals It only takes one time abusing the trust of someone who has been vulnerable to lose their respect and trust. These are essential to be an effective and influential leader. Be careful with “if you” statements. These are condescending and hurtful and can result in a hostile, toxic culture.
Encouraging Employees:
1) People thrive where there is praise
2) Speak affirmation, acceptance, empowerment and encouragement
3) Show approval
4) Show interest in their world
5) Be a discerning listener
Cash Flow Planning | Belk on Business - Episode 57 #belkonbusiness #joshbelk
1) Run historical financial statements for past three years including cash flow statements (cash inflows and outflows). Need to compute what it actually costs in cash to run your business each month (this will not match the total of COGS and expenses on your P&L)
2) Historical profit margin
3) Pull relevant operating data (labor statistics – employee increases and decreases as it relates to output, use of resources – amount of raw material needed to meet production demands, marketing spend – how much is necessary to drive top line revenue) – metrics used for your business type and model.
4) Accounts receivable and payable timeline. How long does it take for me to receive payment and how long do I have before I have to spend it
5) Estimates regarding future performance (what is needed related to resources)
6) Run sensitivity analysis – best case, likely case, worst case scenarios (break even) related to cash. How much cash needs to be spent to drive top line revenue to a point that I break even (labor, materials, overhead) given the timeline it takes to collect receivables and pay expenses? If I change a variable, how does it impact my business (assumptions based on historical data)? If I hire that next person, if I increase my marketing spend or change type of spend, implement new training/development program?
Financial Awareness When Investing in a Business:
1) Does the business model and culture align with your core values and purpose?
2) Be familiar with finances and financial processes for the type of business you are investing.
3) Insist on total transparency…especially with the financial records and processes
4) Are there internal controls with finances? Relationship with bookkeeper/finance staff and owner?
5) Is there comingling of funds with other businesses or personal spend disguised as business?
6) Know the benchmarks/KPIs for the type of business you are investing/partnering?
Timeless Customer Service Principles | Belk on Business - Episode 54 #belkonbusiness #joshbelk
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://open.spotify.com/show/5zpetTmzlkbMxJb1wj1ByO
Stitcher: https://bit.ly/34aRgO2
YouTube: https://www.youtube.com/channel/UCYx1W1zTGED_m_99bqHWA7A
Qualities of the Best Talent:
1) Possess the business skills necessary for the position.
2) Experience with the technological pieces necessary for the position
3) Critical thinking skills
4) Exemplary communication and relationship skills
Keeping a good attitude amongst employees in your business:
1) Have good processes. People want to know what to expect and where they fit in. This includes not only regarding tasks but communication and scheduling/time management
2) Have a strong development/training program. Have a continuous learning atmosphere
3) Provide effective and efficient tools…resources including technology
4) Be complimentary, grateful and communicate clearly with both positive and negative news
5) Leadership should be positive and upbeat. Seeing the good in every situation and can identify opportunities in each problem
6) Leadership should be calm, happy and appreciative.
Analyzing employees:
1) Are they on board with vision?
2) Do they have a servant’s spirit? Do they have a good attitude?
3) Do they follow instructions? Are your instructions clear and communicated in a way that your employee processes data?
4) Do they learn within three times of being told? – May need different voices teaching
5) Can they apply knowledge across projects/clients?
6) Are they actively learning? Sign of desire of personal growth/development?
7) Are they timely? Do they meet deadlines?
8) Do they build and cultivate internal and external relationships?
9) Are they profitable to the business? Are they an investment or expense?
Practical Tips for Working Remotely | Belk on Business - Episode 52 #belkonbusiness #joshbelk
Working remotely:
1) Approach life with a greater sense of discipline and focus – this means a consistency in schedule. Have a routine to your schedule. Have a morning routine – how do you start each day?
2) Get dressed – keep up your appearance. “Dress for success” – we generally are less effective in both productivity and focus when working in what we may otherwise sleep or lounge around the house
3) Have an effective means of communicating regularly with your team to ask for help and receive status updates. Schedule time to do so.
4) Be on time with virtual meetings
5) Take breaks and enjoy the change in scenery – enjoy the opportunity to take a walk, have lunch with family, work on your computer outside or at the local park
6) Guard your spirit and keep a good attitude – get off social media and the news – time block for these activities and stay away from negativity. Listen and dialog regularly with those who have good attitudes and lift your spirt. Take time to be grateful and express it to others.
Thoughts on Leadership with Pastor John Wilkerson | Belk on Business - Episode 51 #belkonbusiness #joshbelk
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Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://spoti.fi/2ZmJtxz
Stitcher: https://bit.ly/34aRgO2
YouTube: https://www.youtube.com/channel/UCYx1W1zTGED_m_99bqHWA7A
Details on the Paycheck Protection Program under the CARES Act | Belk on Business - Episode 50 #belkonbusiness #joshbelk
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://spoti.fi/2ZmJtxz
Stitcher: https://bit.ly/34aRgO2
YouTube: https://www.youtube.com/channel/UCYx1W1zTGED_m_99bqHWA7A
Tom Olson - Good Success: www.goodsuccess.com
Damon Riehl - LoanBidz.com: www.loanbidz.com
Responding to Crisis:
1) Stay calm – operate with a sound mind not in fear. Lead with boldness, love and self discipline
2) Look at your short-term budget and cash flow projections
3) Communicate with vendors, lenders and employees
4) Follow ongoing changes that affect your company and employees
“When we are motivated by compassion and wisdom, the results of our actions benefit everyone, not just ourselves or some immediate convenience” – Dalai Lama
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Owner must take ownership – owner must lead with compassion and respect if the owner expects the employee to feel valued and in turn work to bring value to the client or customer. The business must be run with its core values in mind…consistently
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Compassion and respect can be shown in helping employees with their needs
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An employee needs to be valued, developed, managed well, encouraged and motivated
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A employee that feels valued will receive constructive criticism well
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Notice when an employee isn’t feeling well
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Notice when an employee needs time off
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An employee needs to feel secure
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An employee needs to be listened to actively
Three studies have shown that when an employer values his or her employees, there is a healthy flow of communication in the workplace, there is improved employee retention, reduced stress and a more loyal, secure and transparency workplace.
Developing a savings plan
1) Know where you are spending your money. Document all spending for past 30, 60, 90 days
2) Build budget for spending
3) What cost can be cut or reduced?
4) Set savings goals based around priorities
5) Have a short term and long term savings plan
Debt can cause your business to become over leveraged, result in selling ownership to raise capital, selling golden eggs in the business, cripple future business plans, limit the ability of the business to scale and erodes profit.
1) Always pay principal and interest on secured loans monthly
2) Pay off unsecured debt monthly
3) Generate a debt elimination plan
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Where am I at now?
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Elimitate all non-essential spending
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pay off debt in a manner that works (debt snowball)
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have an accountability partner
Principles of Financial Success - Part 1 - Giving | Belk on Business - Episode 44 #belkonbusiness #joshbelk
Give of talent, treasure, time:
1) What is your purpose?
2) Everyone has something to give - who can you influence?
3) What skill set do you have that can be used to help and influence others?
4) Have a weekly time you choose to give of your time
5) Set goals of financial giving
Building Your Business in 2020:
1) Visionary leadership, self management and self discipline
2) Planning
3) Accountability
4) Coachable and committed talent and teams
5) Unique processes
6) Ability to integrate and leverage technology
Joy of Christmas | Belk on Business - Episode 42 #belkonbusiness
Subscribe on these platforms:
Apple Podcast: https://apple.co/2Zp6hgj
Spotify: https://spoti.fi/2ZmJtxz
Stitcher: https://bit.ly/34aRgO2
YouTube: https://www.youtube.com/channel/UCYx1W1zTGED_m_99bqHWA7A
Preparing for a New Year
1) Revisit processes - where do we have bottlenecks?
2) Revisit clients - with whom do we want to continue working and who should be referred elsewhere
3) Indentify capacity - have a point person responsible for client interaction and manages the process
4) Get started earlier - be proactive with communication and setting expectations
5) Plan out the year - plan quarterly meetings, marketing and content plans, corporate development and project timelines
Effective Client Relations
How can we be effective in our client relationships?
1) Managing a delivery on the client’s expectations. Clients expect your advice, insight, decision support and guidance – even if they don’t ask for it
2) Understand the client’s vision and core values
3) Understanding what the client does and does not want to do
4) Understanding the technology that they use or need to improve efficiency or get the work done
5) Collaboration that is active to move their business forward
6) Understanding what can be done in house and what is better outsourced
“All dreams come true if we have the courage to pursue them” Walt Disney
One limits their ability to pursue opportunities by the following:
1) Fear mindset
2) Entitlement mindset
3) Employee mindset
4) Disbelief
5) Lack of discipline
6) Education/skillset
The context of pay we have with the client’s range depending on whether we are discussing the reasonableness of an owner’s salary, tax strategy or just a practical approach in the context of personal finances.
In the context of determining if a business is profitable, many business owners pay themselves last or sometimes not at all. If this is the case, you don’t have a functional business. The owner’s pay isn’t a separate checking account or part of an accounting hack. It is a practical component of a business’s operating budget. Some items to consider when determining the salary amount:
1) What would it cost to replace your duties in the business? This isn’t the same as replacing you in the business as this would be a component of both salary and net income or profit. Determine what those duties are and look to other businesses as a point of comparison. Look to statistics as to what owner’s get paid in your type of business as compared to gross receipts and net income (usually ranges from 40-60% for most small businesses)
2) How much time and effort are you putting into the business?
3) Look at your personal budget and determine what you need to pay your personal bills. If the business can’t afford to pay this amount, you need to lower your lifestyle of living. Taking regular distributions from your company to cover personal bills means your salary is too low.
4) Is your salary high enough to cover your tax liabilities in your business? This avoids having to implement another accounting hack to pay taxes. Each business should have processes implemented to where taxes are paid incrementally as part of the expenses of the business.
1) Set aside one hour per week during which you think about your future and the future of your business. Discuss your thoughts
with a mentor or group of advisors. Advisors can include a member of small business groups or mastermind groups that can help you analyze and organize your thoughts and plans.
2) Have an accountability call regularly. This can be a once a month call with a mentor or advisor to discuss progress and barriers both personally and in business. This can include conversations regarding family life to business culture to progress on debt reduction or revenue goals.
3) Attend a meeting or conference monthly that motivates you to improve in some aspect of your life and/or business. Attend a mastermind group quarterly in which you can be a help to others and receive help as well in these areas.
4) Invest in improving existing skills and developing new skills. This may include marketing ideas and strategy, data analysis, financial analysis or leadership principles. Always be reading a book and regularly listening to podcasts that provide ideas and information that can help increase your knowledge and put into practice what you’re learning.
Having an objective team is one that has the following qualities:
1) Creative
2) Able to evaluate situations effectively
3) Able to analyze data
4) Able to apply practical principles to real-life business situations
5) Has the skill set necessary and cognitive ability to grow and adapt to change
As business owners, we can use tools to assist with some of these but practically, we can be active to help a team member grow in their position.
1) Allow different team members to sit in on meetings. This will help avoid groupthink, allow for new insight as well as assist in the development of team members
2) Welcome curiosity and allow for feedback to cultivate creativity
3) Own mistakes. Vulnerability results in trust and connection so situations can be evaluated effectively
4) Look to other industries for answers
5) Listen to understand, not to tell (listen for objective data to help analyze the situation and provide solutions). Walk them through your decision-making processes
Key elements of business include process, people and purpose. Improving processes would include the following:
1) Define the process – assess the current state of the process. Map out the process asking, “how are we doing it now?”
2) Measure key elements of the process such as time, resources, etc. to identify inefficiencies.
3) Analyze the process for insights beyond financial. Use visualization tools such as, cause and effect (fishbone diagram), use the “five whys” technique to determine the root cause.
4) Improve the process - this requires problem-solving, negotiation, critical thinking and critical judgment. Many times, problems can be solved by acquiring resources whether to make a small change or major overhaul. This can include change at the people level or utilizing technology like software.
5) Control – how do you manage the process going forward while allowing the flexibility to move quickly to adapt to change. This is the implementation and communication stage. Sometimes it is prudent to run the old process simultaneously to the new process to see if the new process is indeed an improvement.
- When hiring, don’t hire people just like you. Different age groups bring different ideas, different methods of interaction, different methods of work and how work is managed.
- Hire for culture and attitude. Screen people for the right personality.
- Allow other team members to be involved in the hiring process. They can help the candidate know what a day looks like. Allow members of your team to spend one on one time with the candidate. This will help with the buy-in.
- Want your people to win. Provide a challenging environment that allows team members opportunity to meet their goals inside and outside the workplace
- Find out what your people are passionate about in the community and get involved. This could be your best referral source.
Whether coaching, training or mentoring there are parts of the skillset that need to be continually worked on. These include the following:
- Asking good questions. The goal is to determine where you can help them in alignment with their goals and vision. Asking the right questions will give you the information needed to be able to guide them to an accurate assessment of their true self and if is in alignment with their ideal self.
- Listening to understand, not to reply. Operate with an 80/20 rule. Try to let them do 80% of the talking. Put aside your own biases, assumptions, and experiences.
- Build a caring, compassionate relationship. When you operate from a position of compassion, compassion becomes contagious and a culture of servitude and helping will result.
- Be able to utilize different techniques to maintain progress. Individuals learn in different manners but also progress in different ways. Allow for room for reflection, effective communication, role-playing, supportive language or pushing trigger points for motivation or change.
For groups to work effectively they must have the following:
1) Good information. Bad information will result in bad results. Good, factual information is essential as a foundation for making good decisions.
2) Trust – the individuals must be able to trust each other, be vulnerable yet able to keep the end in mind. Should be able to disagree agreeably for the betterment of the whole
3) Be honest about past performance, both successes and failures
4) Be honest about what isn’t happening
5) Be honest about expectations as individuals and as a group
- IRA contribution limits $6k/&7k if over 55 – have until April
15, 2020 (no extension)
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401(k) limits $19k/$25k
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HSA contribution limits $3,500 individual/$7k family – have
until April 15, 2020 (no extension)
- SEP contribution – up to 25% of salary or $56,000, whichever is
less for employees. If self-employed business owner, up to 20%
or $56,000.
- Medical expense deduction if you itemize increased to 10% of
AGI
- Individual mandate penalty removed (some states still have
penalties – NJ, Massachusetts & DC)
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Alimony deduction has been eliminated
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Get with accountant/preparer to make estimated tax payments
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Last year for 15% increase in basis for investment in qualified
opportunity zone property
- Home office – simplified method or use an accountable plan
to be reimbursed if not a sole proprietor (single-member LLC).
It can allow for more business miles if you work from home.
- Break apart travel meals, promotional meals, meals provided
on-premises for the convenience of the employer apart from
other meals to take advantage of 100% deduction vs. 50%
deduction
- Hire children and pay up to $12,000 – must be providing a
legitimate service for the company
- Accelerated/bonus depreciation. Company policy for
expensing smaller items such as computers (dollar threshold)
- Fringe benefits such as phones, job-related education,
disability insurance, group term life, qualified dependent care.
- Accountable reimbursement plan for reimbursement of
expenses paid out of pocket. Be aware of the timeline and
documentation rules. Can reimburse for mileage, home office,
travel, meals, etc.
- Have an “always be learning” culture- Have a strong professional development program investing in your team to develop or polish the skillset related to their position in the company, improve communication skills, lift their leadership lid
- Regularly be analyzing processes and improve when needed to increase efficiency
- Always be looking forward towards possibilities. Learn from past mistakes but don’t dwell on them. Learn from the mistakes of others.
- Operate in an abundance a mindset. Scarcity is a fixed mindset whereas abundance is a growth mindset.
- Effective leaders have four “C” elements
- Creativity – new possibilities with the ability to analyze and develop plans to execute
- Communication – ability to converse in a way that builds and maintains good working relationships between team members, customers and vendors alike.
- Clarity – ability to explain complex matters and solutions in a manner that is easily understood
- Consistency – steadiness needed to deliver the same or better result whether in communication, product or service.
- Does my product or service bring greater value than my competitors?
- Does my pricing reflect my value and is it affordable to my avatar?
- Does the combination of my avatar, product/service, pricing and costs align to a model that is profitable?
- What are my steps/hurdles to get to my goals?
- What are the steps/hurdles my customer/client have in reaching their goals?
When looking at business costs, especially for a business that is struggling or looking to improve its margins will want to look at costs as bringing us one of three things:
- Identifiable ROI (investment in the business)
- Increases value to the client
- Improves the culture of the business or life of the team
**When looking at the balance sheet, one common issue we see is not comprehending the interaction of book value of assets, loans and equity. Negative equity results for a variety of reasons. A few:
1) Loans using LTV (FMV) percentage and excess cash either pulled from the business or spent on overhead**
2) Paying interest only on loans
3) Loans amortizing over a longer period than the depreciation timeline of the property (27.5 vs. 30)
4) Refinancing to pull cash
5) Obtaining debt to pay for operations - using other loans for operations
The company’s r asset, liability, equity, income and expense accounts compile a businesses’ chart of accounts. Most of a basic list will be provided for you if you are using accounting software or software with an accounting function.
**Common questions regarding the chart of accounts are:
1) What goes above or below the line (COGS/COP)**
2) What belongs on the income statement vs the balance sheet (Inventory/WIP)
3) How frequently should I review my financials and how do I manage from my financials (KPIs/metrics). KPIs should identify and measure pain points in the business and help spur discussion as to generating solutions
4) How do I develop a budget from the financials then compare to the future financials
As an accountant, one common question we received is “what can we expense” which is a broad question but generally any item that is reasonable and necessary for business operations can be expensed unless otherwise prohibited.
**Most every business has three positions/areas of leadership:
1) Visionary – leader responsible for the company’s vision**
2) Managers – responsible for the execution and creating value
3) Administrators – responsible for process and tasks
Some thoughts regarding leadership in your company:
- If leaders are going to lead in a way that will allow for perpetuity of not only the business but continue to bring value as leaders in the company, they generally will have the following attributes which should be key in hiring or promoting:
- Integrity – an individual who has honesty and discipline
- Intelligence – not only do they have the necessary skillset necessary for the work but are they truly able to solve problems and grow and lift their own leadership lid
- Positive energy – are they able to keep themselves motivated and motivate others towards deep, positive work and create a good corporate culture
- Synergy is needed and can be created when teams are built around the vision (the leaders all are on board with the vision and can keep their teams on board as well).
- Have a professional development program geared toward developing leaders that deliver consistent results
- Use technology to improve the process and the customer experience
- Define your avatar and consistently deliver content that brings value to your target audience
- Develop a culture of gratitude – employee recognition is as important as planning and accountability
Creating a synergetic and positive corporate culture includes the following:
- A place one can focus (movement away from open concept)
- An affirming environment (encouragement and gratitude)
- Value people (serve)
- Where one can grow into their goals – can grow with their gifts outside their comfort zone in a safe environment
- Two-way mentorship
- Break costs down into two categories … needs and wants or necessities and luxuries. Ask what wants or luxuries can be eliminated and what needs or necessities can be reduced.
- Determine your fixed costs. A business’ fixed costs generally should be 20-30% of net revenue (gross revenue less cost of goods sold).
- Develop an operating budget
- Automate payments from clients
- Review cash flow weekly and have a process for cost management. This may include a cost management plan which will begin by aiming to determine the cost of each activity and a corresponding budget, establishing baselines, how the activity and budget will be managed, control thresholds (at what variance do we take action?) and methods for evaluating performance such as percentage of completion or value management.
- Make each customer’s experience feel personal. How do they prefer to be contacted? What is their method of processing information (graphics, lists, written explanation or in person)?
- Get to know your clients on a deeper level. If appropriate, connect with them on social media. When meeting with a client, go beyond just completing the basic “profile” information needed but find out about family, hobbies, community involvement, etc.
- Be intentional with client interactions. Think about how the communication will make the client feel? What message am I sending?
- Support client with effective tools for communicating. This may include a website for appointment scheduling, portals, video conferencing, social media, podcasts, workbooks, webinars, etc.
Value based leadership is when a leader draws both on his or her own values as well as the values of the individuals on the team to provide direction and motivation. To be effective in leading a team, a leader brings value by exhibiting the following traits:
1) Transparency - allow for honesty in providing viewpoints and a platform for those viewpoints to be heard and analyzed
2) Vulnerability – the self-awareness to allow others to see your weaknesses
3) Authenticity - be true to yourself and others – exhibit sincerity
4) Consistency - a consistent effort plus consistent connection combined with a consistent message equals consistent results. A lack of consistency creates confusion
5) Integrity – tell the truth regardless how ugly it may be – maintain consistency with principles and expectations
6) Emotion – to be emotionally intelligent is to understand and manage your own emotions and the emotions of those around you. A self-awareness of how the mission, vision and decisions make me feel as well as an understanding of how they make others feel.
7) Courage – willingness to remain bold through difficulties while maintaining one’s principles, a faith in people and keeping the end in mind while remaining open to direction and change
1) Create a development plan. How am I going to develop professionally and even personally to become what the company needs? A professional development plan should be in place to identify the necessary skills and resources needed to support the individual’s goals as well as the organization’s business needs.
2) Find out the personal and professional goals of each employee and include these goals if they align with the company’s vision or strategic plan.
3) Incentivize/reward team members beyond the customary bonuses for either hitting financial goals or the “just because” bonuses at the holiday season. This can include hitting personal or professional development goals or even providing training the company finances to allow the team member to grow in personally or professionally.
4) Monitor and establish metrics for growth
1) Who is responsible for each area of the business?
2) What are the strategic objectives in leadership, talent, process, technology and growth?
3) How will progress be measured in each area of the business (define KPIs/metrics)?
4) Establish initiatives in support of objectives. Do costs need to be reduced, efficiency increased, improved sales performance, etc.
5) What is an acceptable timeline for metrics to be achieved and who is responsible for each metric?
6) To whom am I going to hold myself accountable?
1) What do you want your future to look like for both you personally and for the business?
2) What is the business model? A business model has three major components
1) strategy 2) operations 3) structure.
The model includes identifying product and service offerings, resources, competitors, suppliers, partners, market opportunities, competitive advantage, hierarchy, access to capital etc. Each component must align with the vision.
3) Who is going to lead?
4) Who is going to assist in the branding and marketing planning process?
5) Who am I going to serve? What is my avatar/ideal customer or client?
Most businesses experience the pain points that come in an ever changing, fast paced economy. A business not in motion will become stale and will eventually find itself irrelevant and probably out of business altogether. All business should have the following:
1) Vision casting board – will outlines what you want to be, do, have and create in the next 3-5 years. This will be the foundation of the strategic plan and along with the strategic plan will determine the culture of the business and the value the business will bring. This is taking the vision for the company and visualize it for the leadership team
2) Strategic plan – one-page plan used to build consensus, establish priorities, assigns responsible parties with due dates. Updated at least annually. Will establish quarterly goals
3) Infrastructure roadmap – Who is responsible and accountable for each component of the plan. This may include such elements as an IT roadmap or innovation roadmap. The “who” is the most important part of the roadmap. Who determines where resources will be allocated and assigns accountability
Continuous improvement requires balance, vision, discipline and great leadership.
Agility is needed to react quickly during crisis or disruption. Agility is needed to foresee and change with changes in the marketplace the business serves. Agility is a reactive quality. Anticipating opportunities as a result of market trends is proactive. Agility is defined as the ability of a business system to rapidly respond to change by adapting its initial stable configuration.” Both fortunate and unfortunate events happen in life as well as business but being prudent has a plan for when these events take place. Being reactive does not bring value, being able to do the following not only brings value but will help the business foundation remain stable and effective during business and economic cycles:
1) Plan based on trends - understand market trends, technology for your business as well as the clients you serve, demographics in your service area and regulations as it relates to your business and your customer’s business
2) Be innovative to adapt to new markets or environments and take advantage of new opportunities to implement
3) Transform based on environment and results. This may include expanding service or product offerings or a new business model or structure altogether if what you have in place is no longer profitable, bring value to customers or no longer is ideal due to market, legal or even tax changes.
Every business has elements (real estate may include single family rentals, wholesale, turnkey properties, construction management, property management, etc.). A service business will have different areas of services they render (an accounting firm can provide tax, consulting, audit). In addition to the service or product offerings they have elements that include culture, marketing, sales, hiring, internal and external communication, online presence, etc. Each of these elements needs to include the following for a business to succeed:
1) Strategy
2) Best practices
3) Technologies
4) Processes
Each element has the following phases
1) Definition
2) Implementation
3) Refinement
4) Evolution
- Recruit, develop and retain team members with both the
skill and attitude desired by your company
- Benchmark customer experiences then implement
strategies to improve the experience. Have a renewed
focus on the customer experience through providing
improved customer service and business development
- Improve and expand your network to include individuals
and companies which will bring synergy
- Continually be developing you and your team members
with focused learning experiences
- Increase exposure by bringing value, delivering quality
content, through speaking at events/seminars, hosting
webinars, recording podcasts, writing blogs, recording
vlogs and engagement on social media platforms
- Be innovative – improve methods, processes, explore new
approaches and ideas. Invest in the business with
technology, innovative office space and complementary
service or product lines.
- Define the tasks that needs to be done daily, weekly, monthly. Delegate those tasks in your business that are not in your core genius and don’t maximize profit. If you don’t like doing it or aren’t good at it, delegate it.
- Hold a weekly huddle which includes at least these three elements:
- Look at the task list to make sure they are being productive and identify areas of weakness
- Ask what areas leadership can provide direction. Can identify areas where understaffing or overstaffing is an issue, an employee needs further training, direction or clarity
- Allow for one employee to ask any question they desire related to the business. Allows for transparency and vulnerability
- Hold a monthly meeting to look at the appropriate financial numbers with staff either in person or remotely. Provide further direction for your team that is meaningful, actionable and proactive.
- Develop a dashboard reflecting productivity metrics so to measure efficiency. In addition to the communication received from your team in the weekly huddle, provides numerical data to identify potential areas of overwork, lack of productivity, lack of efficiency, etc.
Visionaries/influencers generally tend to want change to happen quickly forcing their team to move too quickly which results in a lack of adequate time for change to be planned and adopted property. This leads to the demise of the idea or change. Individual goals for each team member for adaptation is essential for true transformation.
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Start with a clear 2-5 year vision plan. A plan that clearly defines what you want to achieve. This will include the following in the business:
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Who are we? (Define our why and core values)
- What is it we are going to do to bring value?
- What resources to we have at our disposal?
- What can we develop or create?
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What is our customer experience?
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Develop one-page game plan for 1-3 years that defines how we are going to accomplish the goals outlined in the vision plan. The plan should be looked at frequently and updated annually
- Define and engage those who can help us get where we want to be
- Build a team of 3-5 individuals in your business or close to your business that have diverse skills and perspectives that can help us see the strengths and weaknesses in our plan and help us make the desired changes
- Join and participate in a peer community who can help us develop or polish our skillsets, with which we can be vulnerable and allow ourselves to be accountable.
Some businesses are in a position where they need to be optimized, others transformed. Optimization would include improving productivity and the customer experience. Transformation is generating new revenues, new service or product offerings, new business models or change of business structure.
Optimization is needed when
- There is an opportunity to increase revenues from existing services (price increases for example)
- Opportunity to improve productivity without increasing headcount (increase efficiency),
- Reducing or eliminating unnecessary expenses – ask the question “if we reduced or eliminated this expense, would it have any impact on the bottom line?”
- The customer experience needs to be improved – not delivering the value the customer is seeking – are we meeting or exceeding expectations and bringing value?
Transformation of a business comes when:
- A business expands their service or product offerings. A situation where new opportunities arise that complement their current business model that still falls within a businesses purpose or core genius of the owners. This helps make the business an ecosystem with a range of services and attracts complementary businesses that can network to create synergy
- Digitizing of services and products or creating or using new technology platforms
- New business model or structure when what you currently have in place no longer is profitable, brings value or is ideal due to market, legal or tax reasons.
Businesses owners need to consistently look at ways to optimize their business and when the opportunity or need arises, transform the business to revitalize the business. The most difficult business to transform is our own and we cannot do it alone. We need to work alongside advisors. We need to be asking the question “who can help us?” Use your cabinet of advisors, their network and get in rooms such as masterminds that provide direction and accountability.
Most business owners are intelligent and driven people yet over 80% of businesses fail. The top two reasons businesses fail due are due to a lack of business experience by the owner and cash flow issues or lack of profitability.
Individuals start business for people, process or product, not for producing and generating financial reports. Most business owners have a passion for what they do in hopes of achieving financial freedom.
The accounting system we use in the US is financial theory, an axiom, which is constantly in flux as to rules and regulations. Additionally, the approach is impractical for most business owners. It isn’t that they can’t read a profit and loss statement or understand the basic principles of a balance sheet, it is just that these reports don’t provide the day to day information they need to make decisions in their business. GAAP focuses on top line revenue creating the perception that an increase in top line/gross revenue will result in more profit. If a business is losing money, increasing top line revenue will only result in greater losses.
Most of the time, financial statements as “generally accepted” does not give us what a business is worth (for example…depreciating an asset that either does not lose value or increases in value such as real property. Also, the statements do not provide the intangible value of such things as brand, intellectual property, skillset of employees or owners, etc.).
Many business owners look at their bank account balances at least weekly and many times daily and use the balance as a standard in making spending decisions for their business. This results in spending the cash they see since most people generally use up what they perceive they have available.
Neither looking just at a P&L nor at cash balances gives a business owner the information to know what is working in their business. They aren’t able to find out what is working in their business and what isn’t. The tasks that are profitable and those they need to change or dump altogether.
Business owners many times begin adding service offerings to try to grow their business resulting in a lack of efficiency which is crucial for sustained profitability. This lack of focus kills profitability and financial disaster results if the offering is outside their core genius or business purpose.
What is the solution…in coming podcasts we will talk a little about profit first, some principles put forth by Mike Michalowicz. The approach is basically an accounting hack…changing the way we look at our businesses’ finances. The method changes the traditional sales minus expenses equals profit to sales minus profit equals expenses. This is a method that helps a business owner focus on limiting expenses, increase efficiency and help identify some of what is working and not working in their business. The system utilizes a minimum of 4-5 checking accounts to place cash into certain buckets for particular purposes such as income, operating expenses, taxes, profit, and payroll.
A business’s books are meant to be a tool to make business decisions, not to create confusion or busy work for bookkeepers and accountants. Using profit first or other principles not generally accepted may be more ideal for your business. It is the job of accountants to take the books and generate the financials in a digestible format for lenders, shareholders or for preparation of tax returns.
Encourage business owners that are listening to consider working with your accountant, advisor or coach to structure your books in a way that makes sense for you to be able to realize profitability, generate the necessary KPIs and make the decisions necessary to revitalize or grow your business.
Client/customer retention/nuture – 10X thinking as it relates to clients. Do we filter a client or nuture a client? This is determined by factors that include profitability, referrals, coachable, appreciated, push us to lift our lid (new challenges). Surveying your team in these areas and keeping measurables such as point of contact with a client (email, phone calls and meetings), likeability, coachability and client responses.
- Efficiency – digitization process/aggregation of data, mobile communication, process of getting questions answered. A culture that lacks transparency and a servant leader attitude will result in a culture of inefficiency.
- Scheduling of work – planning and process management (lead generation, first point of contact, intake process and process to get us to completion).
- Setting expectations – this should be done early, ideally in the first meeting. What are the deliverables, costs and timeline for completion?
- Operating cash flow – answers the question “does my business generate sufficient cash flow to maintain and grow operations?” Measures cash flow after all direct business activities (COGS/COS) to pay administrative costs, save, invest and expand. If net income is less than cash flow from operations, you will have to find financing to pay non-operational costs. This metric concentrates on cash inflows and outflows related to a company’s main business activities and does not include such things as investments and capital expenditures.
- Free cash flow – answers the question “What cash do I have to invest in the business?” Every business if it is to grow must invest in its financial stability, future and people. This metric measures the amount of cash left after I pay all operating expenditures and capital expenditures.
Free cash flow = operating cash flow – capital expenditures
- Cash flow from financing activities – How much cash is used to pay debt and investors and what cash came in to pay debt? This provides insight into how well a company’s capital structure is managed or it’s financial strength. A positive net cash flow means that the business has borrowed money or owners contributed capital and a negative cash flow means that either debt is being paid or owners are withdrawing capital.
Fractional CFO's are a bit of a hot topic right now. There are many purposes a Fractional CFO can have. Here are a few things that this position can offer.
Building a connection with clients
- What issues are they facing?
- With whom to they associate? Get in those rooms
- What do they need? Sometimes our customer doesn’t know what they need or what they think they need isn’t what they need.
- Who are their thought leaders/influencers? Listen to who they are listening to and read what they are reading
- What technology are they using? Websites, social media, apps, software
- Talk to their mentors/consultants. Connect with them and build a synergy of helping each other and networking (your network is your net worth)
Seven conversations when starting a business:
1) Identify your why, purpose, mission, vision
2) What is your legacy? Financial freedom, retirement, what is your end game?
3) Cabinet of advisors
4) What problem am I solving? Build solutions not just deliver a product or service
5) Entity structure
6) Plan for success (business plan, marketing plan, etc). How am I getting customers and how am I going to serve them?
7) Projections, budgets, metrics
There are three ways to grow a business
1) Increase volume
2) Increase top line revenue
3) Decrease expenses
At a more granular level, some ideas to consider before taking the next step of growth:
1) Define rules and processes before adding people. Develop efficiency by simplifying processes. Automate processes that can be automated and outsource those that should be outsourced.
2) Evaluate your current client or customer list and determine who in your client list generates the most revenue and profit. This is your ideal client.
3) Identify your niche and define your avatar. It is easier to market your product or service to a smaller potential customer base and charge them premium pricing. Network with those in that group, read what they read, listen to what they are listening to and advertise in those mediums.
4) Be able to give the benefit of what you do (service) or the product you sell in one sentence
5) Become a lifetime learner - read books, take courses listen to podcasts, join masterminds, network, exercise, improve your spirit, strengthen family relationships
6) Don’t do business with negative or unreasonable people. Those who spend the most usually complain the least and those who spend the least usually ask for the most. “People either inspire you or they drain you – pick them wisely.” - Hans F. Hansen
7) Work on culture – identify the culture you desire and develop a plan to create it
8) Become effective in identifying and interpreting key performance indicators (KPIs)/objectives and key results (OKRs)
9) Focus on great for a few things and good enough for the rest – perfection is an impossible destination
As the business owner and working with your team in your daily or weekly huddles, a few questions should be asked and analytics reviewed at least weekly:
- How was our pace last week and what does our pace need to be this week? Was our pace too slow or too fast?
- Any areas we need to change? Bad assumptions, bad decisions, bad measurements or bad inputs.
- Any areas slowing us down? What needs to be measured or what needs to happen to increase pace/output?
- Did we deliver value that at least equaled but ideally exceeded client expectations?
- Did we lose a client to a competitor? If so, what did we learn and does something need to change as a result? Look at customer satisfaction. Document replies to questions asked when speaking to customers or use surveys
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Cash flow.
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Look at your cash inflow against projections and cash outflow against projections and budget. Look at cash flow projections and accounts receivable for the coming week against budgeted expenses and accounts payable. This should be done both at the admin level and project level.
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Review analytics that effect cash flow such as customer acquisition costs, project completion timelines, etc.
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Lead Generation – marketing plan including production of content and effect on generating prospects or sales. What is and isn’t working? What do I need to do more of, what needs to be pulled back?
- Servant leadership metrics - operational and employee performance. Any training, cultural or resource issues that needs to be addressed. Are we providing personnel what is needed to adequately meet their needs reach expectations?
What should I be looking for in an accountant to add as a trusted advisor in my business:
1) Knowledge of industry
2) Responsiveness (timeline as to responding to questions/issues … phone, text, meeting needs)
3) Proactive (understands coming timelines as it affects your business such as lending issues, deliverables, etc.)
4) Strategic (tax planning, investing in the business, cash flow management, etc.)
5) Comprehensive (explain the complex)
6) Platform to teach and communicate (Adequate technology and staff to meet needs)
7) Understanding of risk management and asset protection (can provide this service or work well with attorneys, insurance, etc. to balance tax vs. legal)
Many people have successful businesses and have achieved defined goals but don’t feel like they have achieved success. There is a difference between success as defined by others or sometimes even ourselves and have the feeling of being fulfilled in life and business.
To achieve not just success but a fulfillment in that success, a few matters we must consider:
1) Are we using the gifts we have been given not just in business but in life. We are given gifts which we can use for financial gain but also use those gifts to serve the communities in which we live (family, local assembly, community outreach organizations, etc.). What causes beyond our little circle can we invest not just our resources but our time and influence will leave a lasting impact that outlives our lives or business?
2) Establish metrics (KPIs/OKRs) that not just measure what needs to be measured in our business but establish metrics for setting fulfillment goals.
3) Fulfillment requires four elements (acronym DUCK)
D – Discipline – do what I’m supposed to do and be who I’m supposed to be (be congruent – act in a way that is in agreement with who you are and who you want to be) – What are my core values?
U – Unity of purpose - a positive powerful effect of creating meaningful work with a mission, vision and sense of direction as a whole
C – Compassion – live a life of love towards others
K – Knowledge – always be learning and progressing (lifting your lid)
Simon Sinek’s talk regarding starting with our way changed the dialog in many ways for entrepreneurs and business owners. He said the following:
Very few people or companies can clearly articulate WHY they do WHAT they do. By WHY I mean your purpose, cause or belief - WHY does your company exist? WHY do you get out of bed every morning? And WHY should anyone care?
We need to not know just our why but also our mission and vision. Our why, our passion, our drive isn’t enough. Our goals and objectives need to be clearly identified. Goals and objectives are summarized in mission and vision statements. Both of these serve different purposes for a company but are often confused with each other. While a mission statement describes what a company wants to do now, a vision statement outlines what a company wants to be in the future.
In my experience, I run into business leaders that are unable to lift their lid to achieve their why, mission or vision. To identify the mission and vision…to lift that lid, questions need to be answered that requires us to be self-aware and honesty with one’s self:
- Who do I want to be or where do I want to go? Begin with the end in mind. Weight lifting analogy
- Where am I now?
- How do I get from here to there? What is the path?
- What changes to I need to make? What does our future self say to my present self?
- Who can help me? – multitude of counselors