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Comments Posted By PocketWatch

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Doing Business – The Right Way

Thanks.

This was exactly what I was hoping for. With our politics so intimately wrapped up in business, it seemed to me that one approach is to educate people about the intricacies of business itself.

That way, when people talk about, say, the impact of raising or lowering taxes on business, people that have this information could do the math and call bullshit if necessary.

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» Posted By PocketWatch On February 9, 2011 @ 5:36 pm

Thanks, phread.

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» Posted By PocketWatch On February 9, 2011 @ 5:28 pm

What people will find, if they follow these articles all the way through (that’s gonna take some patience, friends), that my not-so-super-secret agenda is to create businesses that have a conscience. A socialistic business model, if you will.

As far-fetched as that sounds, what I have found out over time and experience, is that businesses that follow this model actually make MORE profits than if they don’t.

Turns out that a socially responsible business is profitable, and sometimes wildly so!

Who knew?

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» Posted By PocketWatch On February 9, 2011 @ 11:02 am

This is the concept I am trying to sell with my consulting.

I’d MUCH rather teach a startup how to do it right from the beginning and watch them succeed, than going into a company that has swirled around the drain for a couple of years and now needs drastic action. Thay can’t all be saved.

When I get into more about the why of being in business and the ethics surrounding that, I will talk some about the responsibility that every business owner should feel and why ‘doing it right’ fulfills that responsibility.

Tha’s my socialist showing…, and yet it’s sooooo profitable.

» Posted By PocketWatch On February 9, 2011 @ 10:41 am

My first thought here is to use a 1099 Form in both directions. I am NOT a tax person, so consult with one, but it seems to me that if you “lose” something of value, that is a taxable event, and the proof would be a 1099 from the person that ended up with it. And the same is true on the second part of the transaction. It also seems to me that there would need to be proof of value somehow.

I have no idea it that would work, but it might.

A 1099 can be used in business to credit a debt, for example. If I provide you with a service and you refuse to pay me, you have received something of value that is taxable. I can issue you a 1099 and write that debt off the books. You will have to report that “income” on your tax return. That value is a part of your overall income, and is subject to whatever taxation level you end up with.

Again, check to be sure, but that’s my first thought.

» Posted By PocketWatch On February 9, 2011 @ 9:20 am

I really need to ask someone how to put that email into a tag or whatever at the bottom of every article… that was mentioned when I discussed this with the leaders of the pack here, but I don’t know how. Still learning the ropes

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» Posted By PocketWatch On February 9, 2011 @ 9:03 am

Hi David!

Wasn’t it Edison who said he learned 10,000 ways NOT to make a lightbulb?

At any rate, my goal is to offer people an insight on how things really work, and the nuts and bolts of really running a business, not the vague stuff that you get in books and seminars.

I do this for a living. I have no problem sharing this information. It’s not a secret, but I have never seen anyone, anywhere put it together for public consumption, which frankly pisses me off. Instead they want to sell you this stuff, often to businesses that are already in dire straights.

I have tools and techniques that I use, and those I need to keep proprietary, but the stuff I intend to talk about in this series, everyone should know, if for no other reason than to recognize BS when they see it out in the world.

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» Posted By PocketWatch On February 9, 2011 @ 8:58 am

Atom bomb, maybe?

Just kidding, but that is a totally political thing, or possibly a legal one, depending on the issue.

If the issue is a part of a law, the political entity (local, county, state, federal) needs to make the change in the statutes.

If its a regulation (they stem from laws), the taxing agency might change it if they are convinced there is a problem, but that’s unlikely. Usually they need to get sued and ordered to change it by a court.

» Posted By PocketWatch On February 9, 2011 @ 8:49 am

From Abby:

“An international business is much more complicated than a domestic one and that failure to understand often hurts those that could really benefit from it, but they don’t want to spend the money to get the accurate help setting themselves up for global commerce.”

—

No kidding… and don’t get me started on the tax situation of a company that has offices or permanent sites in other countries. A total nightmare.

» Posted By PocketWatch On February 9, 2011 @ 8:44 am

Sounds like job security to me! LOL

Have fun!

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» Posted By PocketWatch On February 9, 2011 @ 8:39 am

Hang in there.

I envision one article a week, maybe two.

I intend to cover all the bases. However, reading this stuff and implementation are two very different things. I have had clients that I spent 10 weeks with going over everything, and was told two YEARS after the fact, that they FINALLY got what I was trying to say on one subject or another.

Some of this is very deep chit, and not always apparently important.

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» Posted By PocketWatch On February 9, 2011 @ 8:37 am

I spoke with the “powers that be” here the first day I got here and proposed this series. I dicussed this possibility, and as long as the series isn’t just a commercial for my business, they said ok, and I am trying my best to make it that way.

my email is microconsulting@aol.com

» Posted By PocketWatch On February 9, 2011 @ 8:34 am

I spoke with AdLib (I think) when I first proposed this series, and discussed this possibility. They were ok with it.

I am very reasonable compared to large consulting firms. All expenses (travel, motels, per diem) and $100 an hour, minimum one day, paid by company check at the end of every week.

Email me at microconsulting@aol.com if you think they would be interested.

» Posted By PocketWatch On February 9, 2011 @ 8:24 am

Good to know. Maybe I was thinking of customs brokers. Again, haven’t had to deal much with that.

» Posted By PocketWatch On February 9, 2011 @ 8:20 am

I agree. I recommend QuickBooks used the way I describe, but am willing and do not mind telling people they can actually use Quicken or pencil and paper to keep accounts.

Most small businesses don’t really need the Balance Sheet if they have a CPA that will make those entries in a timely fashion and do the payments for them.

In reality, making sure to accurately track Sales, Costs of Goods, and Overhead (G&A) are good enough to manage things day to day or month to month.

You don’t really need double-entry bookkeeping to do that, assuming you have someone making sure that all the laws and regulations are taken care of by someone that knows what to do.

I also always recommend a payroll service. It’s generally cheap and easy, and they guarantee the calculations and make the payments.

» Posted By PocketWatch On February 9, 2011 @ 8:17 am

I have the eagle eye… or is it evil eye…. I can never remember, and they say the memory is the first thing to go! I forget what the second thing is…

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» Posted By PocketWatch On February 9, 2011 @ 8:10 am

When I get to the details in how to properly cost things and therefore price properly, there is a wrinkle that I’m sure many will be flabbergasted with.

Let’s just say this…

If I sell pencils for a dime each @ a 10% Net Margin, and someone steals one, how many pencils will I have to sell to get back to break even?

» Posted By PocketWatch On February 9, 2011 @ 8:05 am

Sounds like the fun it always is 🙄

Thanks…

Looking forward to it. I plan on sticking on this all day to respond to comments.

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» Posted By PocketWatch On February 9, 2011 @ 8:01 am

My solution, as you will see, is to establish a careful and rational Chart of Accounts, then lock it down (QuickBooks and Peachtree have this feature). No one but the Owner gets to add or delete accounts, and careful looks once a week or twice a month at the outside makes for an easy time of it by the CPA.

If you do that, you CAN get by with a $10 bookkeeper as long as the CPA does an audit every quarter.

Internal controls…

» Posted By PocketWatch On February 9, 2011 @ 7:56 am

Another basic priciple that goes with this concept is proper costing.

I will cover this in detail, but I need to say here that most businesses have absolutely no idea what things really cost. We are touching on that, but costs, and therefore pricing is something that needs to be dealt with very carefully.

Many companies, even big ones, like to bury “downstream” costs like what we are talking about in Overhead rather than the actual Costs of Goods. A very bad idea.

» Posted By PocketWatch On February 9, 2011 @ 7:53 am

Or, as I understand it (not an expert and will defer to your expertise), they could hire a freight forwarder to handle things any time there is a shipment that crosses international borders.

Yes?

» Posted By PocketWatch On February 9, 2011 @ 7:47 am

2garden says:

They could not afford to hire another person Abby.

——–

I’m bringing this up to the top because it’s important.

Let’s say we are dealing with a 3 man shop of some kind, an owner and 2 employees, and the owner is handling all critical aspects of the business, the employees are just workers, assembling stuff or providing the service.

Let’s assume that sales are $1m a year.

Question: What is the owner’s time worth per hour?

Answer: Divide $1m by 2080 (the number of hours in a year at 40 hours a week), or 4160, an 80 hour week.

It comes out to $480 an hour, or $240 an hour.

What is a $480 an hour “employee” doing? Should they be doing paperwork? Or should they be going out and promoting the business?

» Posted By PocketWatch On February 9, 2011 @ 7:29 am

That’s always a question, isn’t it?

But let’s look at that…

Add up for a whole year how many fines and actual money got spent on nothing productive, add up the man hours and costs of those man hours dealing with all that, then figure out the cost of productivity losses dealing with all that, estimate the lost business because of all that, and then add all that together.

The cost of a dedicated clerk is what?

The cost of all that is what?

It may be cheaper to hire someone.

» Posted By PocketWatch On February 9, 2011 @ 7:18 am

And there you have it in a nutshell… short term thinking.

Sometimes pain is the only motivator to get out of that paradigm.

» Posted By PocketWatch On February 9, 2011 @ 7:13 am

Appreciate it!

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» Posted By PocketWatch On February 9, 2011 @ 7:06 am

Thanks! Good to see you here!

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» Posted By PocketWatch On February 9, 2011 @ 7:05 am

Maggie is a rescue cat. I’ve been a dog person my whole life, but apartment living…. I thought a cat might be easier, and she is.

Had her about 6 months. Taught her to take walks on a leash, and now I just carry a leash and hook her up when she might get into something dangerous or where I can’t go.

I get a lot of funny looks, but hey, what can I say? She’s much better adjusted because of it.

» Posted By PocketWatch On February 9, 2011 @ 6:59 am

I thought that many people might be.

One thing to note…

Everything, from start to finish, will tie together. It may not seem so at times, but all the pieces have a purpose.

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» Posted By PocketWatch On February 9, 2011 @ 6:55 am

Thanks, Abby.

Done right, it’s no harder than… oh… a camel passing through the eye of a needle? LOL

No, not really. Done right, and running an established business with a decent product or service can actually be a part time job.

I once took a guy who was working 80 – 100 hours a week down to less than 20 in two months. Actually saved his marriage. His wife told me the day I left.

» Posted By PocketWatch On February 9, 2011 @ 6:43 am

I make every effort to use the KISS principle.

The CPA should have input to having necessary accounts in the right places, but I teach business owners to OWN the Chart.

They are the ones I teach to look at reports each and every week and notice variances from norms they, themselves, determine.

Managing by exception is a BIG principle in getting the time freed up to actualize those dreams I talked about.

» Posted By PocketWatch On February 9, 2011 @ 6:18 am