| The Right Protection for Your Business Assets

Posted in Finance at 9:00 AM by Loftis Consulting

Investing our money into a business comes with a lot of worries. What happens if we lose that money? What happens when that expensive piece of machinery we bought breaks down and is beyond repair? What if someone burgles our business premises? These questions are all too common when it comes to planning your business, and there are far too many concerns to worry about. Luckily, there are ways to protect your business assets no matter if they are physical, on the internet or part of your property.

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Protection for Tools

Whether you’re self-employed working on a per-contract basis or a large business that deals with many clients at once, you need to protect your tools of the trade. It could be computers, drills, cars or even animals—you need to protect them so that you don’t risk them failing or losing them. You can do this a number of ways and it depends on the type of assets you want to keep an eye on.

For instance, if you have invested heavily in power tools and DIY equipment as a contractor, you need to buy some sturdy Platt cases to keep them safe from weather damage and being lost. In addition to protecting them physically, you also need to ensure that you have a warranty plan in place should some of the items you order be ruined or go out of commission. Make sure that they are insured as well if it’s a large piece of machinery, and keep in touch with repair and maintenance services to keep them well-oiled and running properly.

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Security Measures

If you operate a retail store that sells a lot of fancy equipment or expensive electronics, then you better have security guards and solid display cases to prevent people from coming in and robbing your place. If you aren’t entirely sure how to do this, then hiring a security specialist should come first. Once that’s in place, you can contact security professionals and experts to give you advice on how to properly deal with security measures. For instance, installing scanners at the entrance and exit of your store and attaching sensor tags to your items is one way of deterring thieves.

Another option is to have security cameras installed. There are times when crafty thieves will be able to get around your security measures, and the only way you’ll realize if something has been stolen is during a stock check. With cameras, you can constantly monitor your store or business premises and track down thieves who think they can get away with stealing from your business.

 

At night, your warehouse or business is also susceptible to burglary. It’s a good idea to install alarm systems in your premises and tell your employees the code to unlock it so that when they open and close the store, they know how to set the alarms before they leave. These systems can be linked with the local authorities so as soon as they notice something wrong with your business premises, they will dispatch someone immediately to check it out.

| Don’t Let The Green Get You Seeing Red

Posted in Finance at 1:00 PM by Loftis Consulting

Few things about running a business are simple. The business finances can sometimes be the most complicated of them all. Failing to properly structure your approach to them won’t just mean you spend a lot of time untying all the knots. It can also get you in trouble if you are late in invoicing, or even worse, late in payroll and 401k payments. Here, we’ll look at how to keep your finances straight and simple.

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Get a Bookkeeper

If you’re having trouble staying on top of expenses, costs and the money coming in, you can be in trouble of losing a grasp of how well your business is doing financially. You could even be straying dangerously far from your cash flow projection. If you can’t keep a handle on your finances in the real time, it’s a good time you could use a bookkeeper. You can even use telecommuting bookkeeping so you don’t have to have them in the office itself.

 

Create a Schedule for Yourself

Don’t leave things to the last moment. That’s an easy way to find yourself lacking the money you need or missing important dates. Create a financial calendar that sets aside time every day. That time can be used for processing invoices and following up late ones. It can also be used for the big tasks like getting your tax accounts in order a piece at a time so you don’t have to rush to do it all. You can make the schedule more manageable by automating some of those financial tasks, too.

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Don’t Be Afraid to Get Some Help

Learning about your finances and keeping control of them is important. But that doesn’t mean you have to try to handle it all yourself especially if you’re liable to get in trouble if you’re not able to keep up with it. For instance, if you might have trouble staying compliant in how you handle retirement contributions, a safe harbor plan can ensure you’re not missing anything. Just as you shouldn’t be afraid of getting a tax consultant to help you ensure you’re paying what you should be. When the law and compliance are involved, it’s better to be safe than sorry.

 

Separate the Personal and the Business

When you start a small business or start working for yourself, it’s easy to just treat all your finances as one big lump sum. When you’re looking to get exemptions of certain business purchases and straightening yourself out for tax season, however, that’s going to bite you in the real. Creating separate accounts makes it a lot easier to separate the personal from the business. Otherwise, you will have to go through those costs one by one in future, trying to remember why you spent that money.

The use of the right tools, the right organization, and even the right help is going to make it a lot easier to stay on top of your finances. Meaning you will have more time to do the jobs that actually make you money.

| Why Your Business Needs to Use Data Analysis to Grow

Posted in Finance at 5:00 PM by Loftis Consulting

Trying to figure out what is going on in your business? Many businesses overlook the data they have in-house gathered from their sales register, payroll and other systems.  With the right analysis, this data can take the business to the next level.  Companies now days have so much information on customer buying habits, employee processes, sales metrics and so on but most companies don’t know how to use this information to grow their business.  This is where your finance team can help.

Finance employees are used to looking at data to put together your business financial statements but that is just reporting the numbers. The next evolution of your finance team should be to interpret the data for decision-making purposes to move the business forward.

Here are some ways the finance team can help you with informed decision-making using data analytics:

  • Determine the revenue and expense drivers of your business and select one or two metrics for each to track. For example, for a manufacture it could be machine downtime or an online store could be conversion rate of online visitors.  Whatever drives the sales and expenses of your business should be tracked with goals set for improvement in three, six and twelve month cycles.
  • Make the process of collecting and analyzing data simple. If it takes too long then the analysis may be stale by time it is presented to management. If getting the data is too cumbersome then new systems may be warranted.
  • Don’t be scared to get outside help to take your finance team to the next level. If the skil lset for analyzing data is available with your existing team bring in outside help to train the team and develop processes and metrics to track.

Loftis Consulting, an outsourced CFO resource can help analyze your data to help your business make better decisions to grow revenue and lower expenses. Give us a call today at (312) 772-6105 or visit us on the web at LoftisConsulting.com.

| Meeting Your Business Needs

Posted in Finance at 1:00 PM by Loftis Consulting

Business can be a tough life – what makes it so much tougher is that it’s your decision to run a business and you’re the person responsible for it. It can be difficult to meet the needs of your business sometimes whether that means money or the day-to-day running of the business.

Firstly, be sure to constantly seek advice from the right people. In business, being told what you want to hear and seeking the people who will go ahead and tell you what you want to hear is a recipe for disaster. You need constructive criticism and to hear what you need to hear, not the words you just want to listen to. It’s not just about listening, though; it’s about learning. There are plenty of places where businesses can go wrong – study the big cases and lead your business appropriately. Stay humble, educate yourself and conduct your business with passion and character.

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It’s never a bad idea to set your goals and look at the big picture of your business. Set goals that will detail your financial goals, profit, business goals such as bringing in new customers or building new products. Some goals could include recruiting and training new employees for your business. These are goals that need to be clearly defined so you can achieve it. Success might very well be elusive if you can’t visualize clear goals for your business. If you are struggling to define a set of goals ask yourself how you want your company to look and run in a year. This type of assessment doesn’t have to only happen every year – it’d be a good idea to reassess and evaluate the path towards your business goals on a monthly basis.

Money can be a problem with a business, and it’s essential that you aim to break even, if not make a profit. Keep a full record of your outgoings, of course, and make sure every financial transaction is recorded and secured, so your business doesn’t come under any kind of scrutiny.

Giving your customers as many options to pay you as possible is a great idea. Offering to take credit card payments, bitcoin, PayPal and others are a great start. Offering subscriptions for monthly recurring services will ensure you get your money as well. In some cases, if you’re dealing with customers on a large scale you could look to sell your invoices or accounts to a factor which will give you cash for accounts indebted to your company with a site like Factoring Directory. There is plenty of information out there so there are a lot of ways to make ends meet.

There are plenty of businesses you can create, there are plenty of roles you can fulfill and there are a lot of ways you can push your business forward. No matter what, you’ve got to identify the needs of your business and work to meet those needs.

| Limited Liability Company (LLC) Legal Structure Defined

Posted in Finance at 5:00 PM by Loftis Consulting

The limited liability company (LLC) is a hybrid type of legal structure that provides the limited liability features of a corporation but the tax efficiencies and operational flexibility of a partnership.

The owners of a LLC are referred to as “members”.  Depending on the state, the members can consist of single individual (one owner), two or more individuals, corporations or other LLCs.  Unlike shareholders in a corporation, in most states LLCs are not taxed as a separate business entity.  Instead, all profits and losses are passed through the business to each member of the LLC. Members report profits and losses on their personal tax returns just like the owners of a partnership would.

 

A LLC has the following key components:

  • To form an LLC, you must file the appropriate documents with your state
  • Single owner LLCs operate like sole proprietorships but have the protections of the LLC from unlimited personal liabilities.
  • Outside investment not allowed for single-owner LLCs
  • For multi-owner LLCs, continuity and transferability are determined by the organizing and operating documents and may impact the LLCs ability to choose corporate or partnership tax status
  • Liability rules are similar to corporate shareholders in which members are not personally liable for the debts and liabilities of the LLC.
  • If LLC is treated as a partnership for tax purposes, active members pay quarterly estimated self-employment taxes.
  • Inactive members are not subject to self-employment taxes

To learn more about other business legal structures check out our post “Question of the Week: How to Pick the Best Legal Organizational Structure for Your Business“.

To learn more about how Loftis Consulting can help your business profitably visit our website.

| Corporation Legal Structure Defined

Posted in Finance at 1:00 PM by Loftis Consulting

The corporation legal structure can either be a C Corporation or a S Corporation.

A C Corporation is considered a separate legal entity from its owners and has the following key components:

  • The business is required to file corporate documents with the state annual along with a paid fee.
  • Separate corporate bank accounts and records from owners. Keep in mind if personal assets are co-mingled with corporate assets, the owner may lose personal liability protection from corporate lawsuits.
  • Assets and income generated by the corporation are owned by the corporation
  • Corporation required to pay federal, state and in some cases local taxes
  • Must register with IRS, state and local revenue agencies.
  • Tax ID number required.
  • Pay income tax on corporate profits and then pay taxes again on any dividends paid out to shareholders on their personal tax returns
  • Shareholders who are also employees must pay income tax on their wages
  • To form, the corporation must file articles of incorporation with the state
  • Can issue different classes of stock and bonds

A S Corporation has a Subchapter S designation from the IRS and has the following key components:

  • Charter a business as a corporation in the state where it is headquartered
  • Profits and losses can pass through to the owner’s personal tax return and thus the business is not taxed itself, only the shareholders are taxes.
  • Losses are limited to the shareholder’s basis
  • Shareholders can be paid wages, receive distributions of profits or a combination of wages and distributions.
  • Can issue one class of stock to up to 100 shareholders

Under either corporate structure, the organization exists in perpetuity if one or more owners die and ownership can be transferred by sale of stock.  In addition, shareholders are generally liable only to the extent of their investment in the business but management generally incurs some personal liability.

To learn more about other business legal structures check out our post “Question of the Week: How to Pick the Best Legal Organizational Structure for Your Business“.

To learn more about how Loftis Consulting can help your business profitably visit our website.

| Why You’re Not Getting As Much Profit From Your Business As You Would Like

Posted in Cash Management, Finance at 9:00 AM by Loftis Consulting

We’re going to assume that you put as much effort as you can into making a business that is appealing, has a strong customer base, and real value in the market. You might see good business, but you’re not seeing the kind of returns that you were expecting and hoping for. So, what gives? We’ll boil down the reasons that you’re disappointed with the returns you’re seeing and how you’re going to change that.

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You’re Lazy With Your Accounting

You might immediately be able to start freeing up more cash in the business if you simply take a closer look at how you might be able to save a bit more money. A lot of business owners will go the less cost-effective route simply because they haven’t considered how much of a return on investment it’s going to offer them. For instance, instead of hiring more employees and spreading your finances too thin, you could consider outsourcing to get the exact same job done. Then you could be looking at easily reduced bills, like making the business more energy efficient or taking the time to contact your service providers and suppliers and negotiating a better deal with them. If you want a better profit, you need to look at how exactly you’re using your money.

 

You’re Letting the Tax Man Take Too Much

Every business is going to have to pay taxes, there’s no mistake to be made there. However, if you don’t ask any questions about how much exactly you’re paying, you could find that you’re letting the tax man take more than they rightfully should. Just as you should monitor all your expenses, you should make sure you take the time to research which of them are taxable and which aren’t. You should also look at which benefits you offer that could reduce your tax payments, as well as those that you could start providing to do just that. Many business owners aren’t even aware that their charity contributions could earn them a tax break as well. Be eagle eyed in spotting tax breaks.

 

You’re Relying Solely On the Business

Simply put, if it’s personal wealth and assets you’re looking to build, then looking at the business to provide all the growth you need isn’t the best answer. Instead, you should be looking at additional ways to invest your money and start diversifying your income. Looking at sites like the Investor Services About Us page can help you start seeing how finding new ways to grow your money that might be more profitable than running the business alone. The really rich, like Warren Buffett, got that way because they invested, not just because they knew how to run a business. Take a leaf out of their book.

If you want to make more money, then you need to get serious about how you do it. This means being a lot more thorough on finding cost-effectiveness and return on investment. It even means knowing that your business alone might not be enough to build the kind of riches that you’re aiming toward.

Call Loftis Consulting today at (312) 772-6105 to learn how we can help you better track profits and expenses to improve profits. Also, visit us at loftisconsulting.com for a list of our services.

| Turn A Property Into A Serious Investment With This Advice

Posted in Finance at 1:00 PM by Loftis Consulting

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If you’re looking to get started as an investor, property is one of the best options for you. It’s one of the most reliable and profitable forms of investment available, and the best part is, if you’re a homeowner, then you’re already potentially sitting on a great investment right now! Many people have found that, if they’re moving to somewhere new, it was better to rent out their previous property rather than selling it. That way, you’re not just leaving behind all of the work that you put into the property, but rather you’re turning it into a business. But if you’re going to do that then you’ve got to make sure that the property is ready for the rental market. With that in mind, here are a few ways that you can turn your old home into a great investment.

 

Have It Inspected

If you’re going to be renting your property out to people, then you’ve got to be sure that it’s up to scratch. Before you do anything else, make sure that you have someone professionally inspect the property. That way you can make any necessary repairs as early as possible, rather than once someone else has moved in. If your tenants discover problems with the property, then it can cause serious problems for you, both regarding their payments and in terms of your reputation as a landlord. Make sure that any issues are identified and dealt with well before anyone moves into the property.

 

Make It Presentable

If you’re putting your property on the rental market, then you need to make sure that it’s as presentable as possible. This goes beyond just making sure that the property is clean, although that is incredibly important. If your home looks outdated, then it’s going to be much harder to find tenants who want to occupy it. The key is to make your property as impressive and up-to-date as possible. Look at modern design trends for inspiration, from trendy lighting solutions to commercial concrete countertops; there are dozens of different places to look to find out the best way to present your property. By keeping it up-to-date, you’re much more likely to get a great deal of attention from potential tenants. It might involve an ideal investment but will almost certainly pay off down the road.

 

Figure Out the Rent

This is probably the most important part of any rental property: what you’re actually going to charge. It’s a good idea to get some advice from a real estate company in order to figure out what’s best to charge but some factors that you’ll need to consider are the prices of surrounding properties as well as the current rental market. Of course, you need to make sure that you’re considering how much you’re paying regarding the mortgage, the last thing you want is to price the property too competitively and end up losing money every month.

 

 

| How To Protect Your Company’s Finances

Posted in Finance at 5:00 PM by Loftis Consulting

Running a business is a stressful task, but a worthwhile one if done well. Of course, the road to success is a long and arduous one. Perhaps you’ve considered all the steps you need to take or perhaps the unknown or which steps you should take is what’s giving you so much grief. In any case, you will come across problems at some point during your company’s operations or transactions, and it’s important that you’re prepared for such events, so as to ensure your business’ finances are properly secured and safeguarded.

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The key to success all lies in your business’ finances. It’s not all about making more and more profit. That’s not how you build a secure business; a secure business is built on what you do with the profit you make and how you choose to invest it. If you have no idea what I’m talking about, or you’ve no idea how to look after your company’s financial future any better than you already are, here are some solid pieces of advice to better defending your enterprise.

 

Prepare For the Worst

That may sound gloomy, but it’s just good business. The economy is fragile, as we’ve seen over the past decade. Thousands of businesses went bankrupt because they weren’t prepared, but now companies are smarter. Your business should take note too, because there are always external factors which can lead to a reduced cash flow into a company. If you’re prepared to take emergency measures, such as temporarily using remote work, or perhaps even leasing equipment rather than buying it, you’ll protect your finances, should such a day come.

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Educate Your Employees

The most important way to protect your company’s finances is to be as open as you can be with the internal operations of the organization. That means you should make all aspects of the company’s operations as plain as day, but it also means that you need to leave no gaps in employee training. An injury or a mistake in the workplace can become a legal dispute, and that becomes an issue for you as the owner, rather than the employee. It’s your responsibility to ensure that your workers are all sufficiently and efficiently trained in their respective roles within the company. If you implement the correct safety procedures, you can’t be held liable for mistakes.

Clarify all details that can be clarified within your business’ regulations, but also provide on-the-job training to ensure that no mistakes are being made or will be made in the future. It’s important, of course, that the company policy is not only entirely clear to your employees but also legally sound. Ensure you put together a binding and flawless contractual agreement, and you could even use a Legal Printing service to really round off the process in a professional manner.

 

Keep Your Data Secure

In the digital age, more than ever, data security should be a number one priority for your business. Money is scarcely physical in the present age, which means you need to protect your virtual finances from attackers if you want to protect your business.

| Partnership Legal Structure Defined

Posted in Finance at 5:00 PM by Loftis Consulting

The partnership legal structure can either be general or limited.  Under a general partnership, the legal liability is not separate from the owners just like a sole proprietorship legal structure.  The difference between a sole proprietorship and general partnership is that a sole proprietorship is limited to one owner whereas a general partnership can have two or more owners.

Just like a sole proprietorship, owners can take cash withdrawals from the business and must pay taxes quarterly.  For a limited partnership, it provides some limitations on the liability of the owners and on how profits and losses are split among the owners as well as terms of operation.

Key things to know about the Partnership Legal Structure:

  • To be formed, the business must be registered with your state
  • General partners have equal management rights and control unless specified differently in a partnership agreement in both a general and limited partnership legal structure
  • Limited partnership owners have their liabilities limited to their investment
  • All partners have equal ownership of all business assets and liabilities unless specified differently in a partnership agreement
  • Ownership percentages can vary based on the number of partners and the written agreement
  • The business dissolves if a general partner dies or leaves the partnership unless the partnership agreement provides for continuation of the business by the remaining partners
  • General partners are fully liable for all liabilities of the partnership no matter which general partner incurred them
  • General partners are subject to self-employment taxes of their share of self-employment income from the partnership whether or not distributed to the owners
  • Limited partners are not subject to self-employment taxes
  • For tax purposes, the business can operate on a fiscal or calendar year basis

To learn more about other business legal structures check out our post “Question of the Week: How to Pick the Best Legal Organizational Structure for Your Business“.

To learn more about how Loftis Consulting can help your business profitably visit our website.


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