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Business Growth

The Why & How of Business Referrals for San Francisco Bay Area Owners

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Firstly, before I jump into what business referrals could mean for your San Francisco Bay Area business, I wanted you to see this. You may have already heard me talk about this … but the explosion of shady flim-flammers gaming the Employee Retention Credit and making questionable claims on behalf of business owners is raising all kinds of red flags at the IRS. As it should. Here is the headline of the IRS’s most recent “Dirty Dozen” release: IRS opens 2023 Dirty Dozen with warning about Employee Retention Credit claims; increased scrutiny follows aggressive promoters making offers too good to be true. Indeed. And I will have more to say about this in the future. But if you’ve been potentially victimized by one of these overly-aggressive promoters, let’s talk:(408) 775-7790 One of the strategies employed by these slim shadies is offering extravagant referral fees. And I’m not opposed to a nice referral bonus. But when they made it so large (sometimes into the five figures), it became a recipe to attract the sharks.  However, when you do things right — working ethically, professionally, and well behind the scenes with vendors, clients, and other businesses — it means good things for your San Francisco Bay Area small business. After all, you’re small fish in an economic tank with much bigger fish (and those sharks). Survival chances are greater when you swim with others. That will be the subject of today’s Note. But before I dive more into that, I do want to make one more brief diversion to revisit the global banking situation… and the vulnerability of the banking world right now.  It’s easy to let panic set in. The reality that your San Francisco Bay Area business could take a big hit because the bank fails in which your money is invested, means you might be tempted to scramble to pre-emptively right the ship.  Yes, things could get rough ahead, and the recession that’s been threatening for the last year is almost a certainty. And if you’re looking for a business loan, banks are going to be much more stringent about giving those out. They want to make sure you’ll make good on their investment.  As far as the possibility of your business being threatened by a bank failure, if you’ve got under $250,000 in FDIC insured US bank account, then you can take a breath (also, joint accounts are covered up to $500,000).  More than that, we should take a look at what that means for your business. It might be time to “kick the tires” of your bank to ensure reliability. It might even mean making a switch. And we can talk about what that looks like. Just grab a time with us.(408) 775-7790 Most of all, don’t get caught up in hysteria.  Alright. So, today I want to talk about a way that you can build your business and create some strength in your financial framework through a bit of an indirect method. (A little something called business referrals.)  What does building a referral system mean for you? The Why & How of Business Referrals for San Francisco Bay Area Owners”You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” – Dale Carnegie Everybody knows aboutcustomer and employee referral programs, which usually offer a quick, monetized reward for sending business your way. They’re great when they work well. (Most word-of-mouth programs are as long as your company has a good reputation.)  As small business owners, we all know referrals are GOLD. Most customers who have a good experience with a company will recommend that company. Leads from those referrals tend to be worth more in both the short and long term, and most people trust referrals from people they know personally.  It’s like having salespeople you don’t have to pay.  Then there are other businesses (non-competitors of yours) who may be willing to recommend your company to their own customers. You, of course, must be willing to recommend your customers to them. You may well already have an ad hoc, informal version of this arrangement. Nowadays, this is called a “referral team.” You can formalize this process for an even better payoff.  Here’s how to start on the business referrals track.   Building a business referrals team: Who to approach? Ideally, you’re looking to put together a team of about six or so associates who have companies that complement — but do not compete directly — with what your company does. Your prospective team members are determined by your company’s goals, your market and industry, your (presumably good) opinion of your prospective fellow team members, and your idea of who’d be most willing to spread the word about you. Regarding competition, there is wiggle room in your choices: In our line of work, for instance, one accounting firm that does only tax preparation might make an excellent referral teammate for an accounting firm that does only business advising. Maybe an accounting firm that handles tax and accounting could find good prospective teammates in lawyers, insurance agents, IT providers, and so on.  The point is to create a steady, two-way flow of new customers. An effective referral team is also usually a small one. That’s the best way to hold every member (including you) accountable for sending referrals to each other.  A little common sense here: Make sure your company is ready to participate in this network and handle the new business. If there are any problems handling the business coming through your door already or any customer service issues you’ve been meaning to clean up, now’s the time! You do not want team members referring customers to you and then having those new relationships consistently go south — there’s no quicker way to see your referral team unravel.  Building a business referrals team: Formalities As we said, you probably have informal referral arrangements with some businesses already. A proper business referrals team (sometimes called a cross-referral network)

Employee Benefits

Prioritizing Employee Wellness in Your San Francisco Bay Area Business

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It’s a bit of a dog-eat-dog world for businesses these days. (Feel that sentiment in your bones?) Inflation is pervasive. Supply chain issues still have you jumping through hoops to get products. The hunt continues for good help… proving the adage. Covid-era debts now have to be repaid. Taxation is amping up. And there’s more where that came from. Keeping up with everything certainly takes its toll. So, let me ask you… what are you doing to find the positives and overcome the challenges? The owner road can be lonely and daunting. And you’re carrying the load of running and growing your business.  If you’re having trouble finding a way through the mounting economic pressures and keeping your San Francisco Bay Area business healthy, maybe it’s time to sit down and take a look at things. My team and I can help you cut through the noise to find what will work for your business right now. So, if you need to and when you’re ready, let’s get something on the schedule: Patti (408) 775-7790  Gale 408-775-7800 A healthy business owner is a non-negotiable for a healthy business. Healthy employees are the other side of that coin. That’s as much about physical health as it is about the mental and emotional side of things. It’s not enough to simply pay your employees for a job well done and cut a bonus once in a while. You’ve got to build an environment that makes your workers want to keep coming back.  Intentionality is a game changer with staff. Trust me, they’ll sit up and take notice when you start shifting company policies that are conscious of their health.  So, what does prioritizing employee wellness look like? Let’s find out. Prioritizing Employee Wellness in Your San Francisco Bay Area Business“Take care of your body. It’s the only place you have to live in.” – Jim Rohn What are the best metrics for company health? We small-business owners tend to hone in on bottom lines and numbers to tell us our company is healthy. But there are all kinds of health and all kinds of ways to preserve it for your staff — from comfort to culture to cutting stress in everyday tasks. There are tactics you can use to alleviate stress and impact your staff’s sanity, productivity, and ability to avoid mistakes.  Let’s look at three ways you can prioritize employee wellness right away.  Employee Wellness Idea #1: Spatial recognition The first thing most people think of with workplace health is ergonomics, the study of people in their working environment to prevent discomfort or injuries — or, in plain English, making sure everyone has the most comfortable workspace possible. Anybody who’s had an aching neck or a pain singing up their mouse arm after a few hours at their desk knows exactly what we’re talking about.  If you have workers who sit at a computer:  Employee Wellness Idea #2: Culture Scads have been written about company “culture”… but what does it mean, and how does it relate to employee health?  Most small business owners liken company culture to game nights and regular Zooming. Let’s broaden that horizon. Have you ever considered how power is… well… empowering? It generally leads to people feeling better about themselves and about where they spend their workdays.  We realize that this goes against the grain of some leaders in companies, but you can’t be the bottleneck for the growth of your company. If you feel you’re the only one who can do something in your company, you probably are — and that stunts real growth.  Employee Wellness Idea #3: ‘You’ve got stress’ Stress is the enemy of a healthy workspace. Some workplace experts say one good way to attack stress is to cut back on the “always-on” notion that workers must be online and available every minute of every day (and sometimes night). The experts, in this case, are right. Some measures protect and respect focus. Start with your email:  Employee wellness is worth it. Cultivating a company that runs smoothly and happily is our biggest passion here at ONeill & Bergado. Let us know if there’s anything we can do for your San Francisco Bay Area business. To health and happiness, Patti ONeill and Gale Bergado

Business Growth

Leadership Development in Your San Francisco Bay Area Business

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Unless you’ve been living in a cave like this woman, you know that business ownership is a tough gig right now — it’s nearly an Olympic sport to keep things running and moving ahead.  But, despite all that, being a business owner is also pretty great. And I’d make a guess that a big part of that for YOU is getting to be your own boss. You get to build something that has impact and move it any way you feel is the right way forward.  But the crazy thing is, a lot of business owners fall into the same traps as their previous employers when it comes to employee management. (Now, before I elaborate on that topic, I want to make sure I do my part as your go-to San Francisco Bay Area accounting pro to keep you on track for what you should be doing *right now.*  It’s April. Do you have a plan for analysis of your Q1 numbers? If you had the ability to understand those financial data points and respond to them quickly, imagine how a pivot now can affect the rest of 2023. In this economy where the banking world is reeling, you’ve got to know what’s happening in your business. That’s something we can sit down and talk about: Patti (408) 775-7790   Gale 408-775-7800  In the same way, employee care is an area where awareness and response pay big dividends. You have to be intentional about how you lead your employees, and you need to make sure you’re creating a work environment that makes them feel like what they’re giving is a central part. Today I want to specifically target employee empowerment. Making a pivot to let your employees have more “ownership,” a little more autonomy, means really good things for you and the future of your San Francisco Bay Area business. Let’s look at what I mean… Leadership Development in Your San Francisco Bay Area Business“Independence is happiness.” – Susan B. Anthony Eventually, all companies find they need to shift certain responsibilities from the owner to select employees. That time will come in your own growing business (if it hasn’t already) — and when it does, you’re going to need those people to be able to think for themselves in the best interests of your operation.  Don’t wait until you personally are too overburdened and have to roll the dice on one of your employees. Get them ready now by encouraging initiative and independence. This is where leadership development for your employees begins. Start with yourself Employee leadership development begins with looking at yourself as a boss. It’s important to be honest with yourself here.  Do you naturally empower your people — or is micromanaging a habit you’re going to have to break? Do you resist delegating? Do you ask for updates to the same project too frequently? Maybe you fixate on details, redo work, or get mad when decisions are made without you? If you want something done right, do you have to do it yourself?  You might have other work to do — on your own attitude. Look at it this way: You must trust the abilities of a given employee. If you don’t, it’s time to change what they do for your company (or get rid of them). Here’s why: If you do trust them, you’re safe making them more independent. Spotting the right people Employee leadership development is first about giving them the means to lend their talents and interests to a company. (Didn’t your own talents and interests motivate you to start the company in the first place? …) This lays the groundwork for giving them more independence and decision-making power — plus it can arm your business with fresh perspectives and skills without having to pay for outsourcing and consultants.  Some bosses (we’re not saying you’re one) like to think you can learn an employee’s interest through the shortcut of a survey. Could be — but your better bet is to simply talk with your people to find out what part of working for your company excites them most (and of course overlaps with what you need done — you’re running a business, not an after-school program …). This identifies who would be a good fit for a promotion or some more responsibility. What and how to teach Here’s an idea for leadership development: Try having younger staff take on managerial tasks.  Let’s use meetings as an example. Love’em or hate’em, by Zoom or otherwise, they’re a mainstay of business these days. And more goes into a good one than meets the eye: planning, communication, sticking to an agenda, and thinking on your feet with the dynamics of attendees. An employee’s successful conducting of a meeting is a useful tool for you to see who can work independently and who can take the initiative on a task with a lot of moving parts.  Sit with the employee before they conduct the meeting and go over all those parts. See how they do and afterward debrief on what went wrong — and right. You don’t want to punish and discourage but give feedback and educate. Mention but soft-peddle the negatives, at least for a time in someone’s development.  You’ll also want to keep questions open-ended during your assessment. Instead of just finding out what happened, ask them why they think it happened. What would they do differently next time? What do they think their next initiative should be, and why?  This leadership development strategy can apply to teaching other management skills, from overseeing sales calls to leading whole departments. All of these pointers also work equally well with remote employees, using your usual media. By the way, you and your senior staff should be prepared to keep your doors unusually open during this empowerment exercise; it’s going to fizzle quickly if your junior employees don’t feel they can always ask questions.  Speaking of which, sound out your senior staff on becoming in-house mentors, which means taking on the responsibility of informal but regular meetings with junior

Business Tax Planning

How the Bank Crisis Affects San Francisco Bay Area Business Owners

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Now, I know that I recently started talking about the new FinCEN reporting requirement and promised a part two… which I’ll absolutely get to in an upcoming blog. But this time I wanted to take the opportunity to speak about the banking “crisis” that has a lot of San Francisco Bay Area business owners frantically deciding how (and if) they need to respond.  You and I can see that the US economy seems to be built on quicksand right now.  Things are shifting faster than some of us can keep up with as we watch banks sink and businesses go right along with them. Don’t panic – even as you’re wondering what you should do right now to keep your business stable and moving forward. That conversation certainly goes beyond one weekly strategy note, but I wanted to step into the fray today to give some perspective.  There are a lot of things you can examine in your business to spot financial drains and capitalize on profit-bringing endeavors. That’s something we should talk about sooner rather than later.  Book a time to have that conversation now:Patti (408) 775-7790 Gale 408-775-7790 Until then, let’s take a deeper look at what’s happening in our economy (bank failures and all) and see what that means for you and your San Francisco Bay Area business. How the Bank Crisis Affects San Francisco Bay Area Business Owners“The fundamental business of the country … is on a very sound basis.” – Herbert Hoover Silicon Valley… Signature… First Republic… Three rapid bank failures have just flooded the business world — an environment that hasn’t seen such things in a while.  It’s worth asking right now: What are bank failures the end of? Or more importantly: What are bank failures the start of?  Bank busts have been more common throughout American history than we usually remember. This week, I want to address our potential crisis by giving an overview of past problems and some of their causes — and what other small businesses are thinking about how to respond.  We’ll analyze some of those response strategies next time. History repeats itself Just as in our times, bank sinkings have always cropped up as signs of wider, spreading economic distress — such as the global changes (the end of the Napoleonic Wars) just before the panic and widespread bank crashes of 1819. Not 20 years later, the country saw a recession that lasted into the 1840s sparked in part by a land-price bubble. (Historically, market “bubbles” have often contributed to economic and banking problems.) Interlaced finances in our modern world are nothing new, either: In 1819, one of our country’s first federal banks had to cut credit to state-chartered banks, leading to the collapse of many of them amid depositors’ runs.  In 1873, speculation in railroad bonds (combined with the demonetizing of silver, inflation, and high-interest rates) ignited bank failures in the country’s first great depression. In 1907, major losses by two copper speculators rippled out to become runs and insolvency on associated banks. Loans to the banks stemmed the runs, but the crisis soon intensified into runs on many New York-based financial institutions.  This copper mess of more than a century ago has connections with today’s problems. Steps taken to solve it gave birth to some of the tools and philosophies used by the Federal Reserve today, and observers note how some of those New York companies resemble today’s shadow banks.  The Great Depression and afterward On “Black Tuesday” (October 29, 1929), the greed and guesswork that had inflamed Wall Street through the “Roaring Twenties” joined rising unemployment and shady financial reporting to bring about the true Great Depression. Bank runs and failures spread over the next few years until President Franklin Roosevelt ordered a “holiday” in which all banks had to cease operations until they could show solvency.  Thousands of banks that had extended too much credit and ignored the Federal Reserve’s warnings went under through the 1930s — and the process birthed the Federal Deposit Insurance Corporation (FDIC), which guaranteed that depositors would not lose their deposits in member banks in the event of a failure.  More recently, the Savings and Loan crisis began right after the rampant inflation of the 1970s and intensified regulation; more than 1,000 S&Ls failed through the 1980s. In 2008, the Great Recession began when two investment banks — Bear Stearns and Lehman Brothers — became insolvent. Rampant speculation in housing markets contributed to the crisis.  From it, however, came regulatory reforms that included the Dodd-Frank Wall Street Reform and Consumer Protection Act that helped ensure that banks “too big to fail” were capitalized to handle the next crisis. (Those regs have since been scaled back.) From 2008 through 2015, more than 500 banks failed from this crisis, but the only runs were on “shadow banks” that lacked government backup.  What’s happened now? Silicon Valley Bank invested heavily in Treasury bonds, the value of which was hammered by the Fed’s hikes in interest rates to fight inflation. A run soon fed on itself as the bank was forced to sell more and more Treasuries at a loss. SVB was the largest bank failure since 2008 and the second-largest bank failure in American history, behind Washington Mutual during the Great Recession.  Signature Bank was in a similar situation to SVB. It also failed and was the third-largest U.S. bank failure ever. On May 1, First Republic Bank folded (taking SVB’s spot as the second-largest American bank failure).  What mood are small businesses in as crisis ripples through the economy and lending sources tighten?  A recent survey of accountants who represent more than 100,000 small businesses revealed worry about the challenges ahead of getting capital, among other concerns. The economy’s expected to get worse for small businesses over the next 12 to 18 months, most respondents said… and even more specified that small businesses’ ability to access fresh capital would worsen – not to mention the unknown risks of shadow banks and other new varieties of lenders.  “Line up any capital or

Business Valuation

Navigating Bank Failures in Your San Francisco Bay Area Business Right Now

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Memorial Day was this week. The unofficial start of summer. I like to remember that when things are unpredictable and even a bit hairy (like a shifty economy, bank failures, debt ceiling crisis), normal life still goes on.  People will still prep their grills. They’ll whip up their mom’s potato salad recipe. Celebrations with friends and family in the backyard will still happen across the 50 states. It’s always good to keep that in perspective.  As a business owner, you’ve probably gotten good at managing crazy for a while now. Running a business in our post-pandemic economy takes a special kind of chutzpah.  That’s why I want to jump into part 2 of my banking crisis articles. I’ll get back to the second half of our talk about the new FinCEN reporting requirements soon.  But today, my goal is to help ease your mind about the topsy-turvy economy and equip you to navigate it. Naturally, I won’t cover everything about navigating bank failures in this article. There’s a lot more to be said. If you want to talk about your business goals for this year or how to take this whole bank failure impact in stride, let’s get something on the calendar:Patti (408) 775-7790  Gale 408-775-7800 Until, then, I’ve got some thoughts on how you can carry your San Francisco Bay Area business forward in this present moment… Navigating Bank Failures in Your San Francisco Bay Area Business Right Now“Banking is very good business if you don’t do anything dumb.” – Warren Buffett It takes a lot of moving parts to keep a business running, no matter how small or gargantuan it may be. Some of those things your business relies on involve outside institutions. (As much as we like to think we operate in our own bubble… that is rarely the reality.) Aside from your utility companies, your bank is probably the outside institution that’s most vital to your small business. Which is why, in the midst of a banking crisis, you might ask, “Is my bank in trouble?”  Accusations keep flying on Capitol Hill as lawmakers grill bank execs. Warren Buffett himself has warned that the banking crisis isn’t over (though he adds that depositors generally shouldn’t worry).  A recent survey showed small-business owners divided between those who have confidence in America’s banking system and those who don’t. Almost a third said they weren’t going to open a new bank account anytime soon. A slight majority think their business capital is secure — but fewer are finding it easy to actually access the capital they need. Throw in nagging inflation and frequent hikes in interest rates (though both might be slowing this summer)… and the banking crisis can feel like a worry that’ll break the camel’s back.  Allow me to comfort you, if I may: It isn’t.  Navigating bank failures is possible for you and your company… with perspective, caution, and a sharp eye for options. Navigating bank failures means new kinds of risks When bad asset allocation, sketchy investment, and lax risk management rattle banking — and Congressional inquirers think all of those apply to the current crisis — it’s only natural that other businesses like yours start thinking about new kinds of lenders. For instance:  Approaching one of these institutions means you have to weigh a fresh source of capital against new and unknown risks, a common problem when a mainstream industry as vital and big as banking hits troubled times. How much help is the FDIC? But even when navigating bank failures, common sense still prevails. If you are looking for a new bank, you don’t want to jump too quickly only to find yourself at a new institution with hidden higher fees and other problems you didn’t have time to spot.  You should also know that your money also has a backup (within certain conditions). The Federal Deposit Insurance Corporation, created 90 years ago as thousands of banks failed in the Great Depression, insures bank deposits up to 250,000 dollars. The insurance amount is per depositor, per insured bank, for each account category. Seems simple, and maybe it is for individuals. But is it still giving enough coverage to businesses these days? The FDIC itself has suggested “Targeted Coverage” for different levels of deposit insurance across different types of accounts, with a focus on higher coverage for business payment accounts. The FDIC also noted how individuals can often do what businesses can’t: Diffuse their accounts and their money across multiple banks to make sure every account is under the threshold of FDIC coverage. For now, until some sort of Targeted Coverage becomes a reality, it could be a smart move to try doing this as much as possible with your business accounts.  Does size matter? In one of those surveys we mentioned, small-business owners are fairly split in preferring to work with large, regional, and community banks, but they did report that right now the regionals and community banks were harder to access capital from. That’s also the order in which respondents expressed confidence in their bank now — “bigger” does seem more secure. But is it? Unrealized losses are on the books of many regional, mid-sized banks — yet some benefited from the business transferred from the likes of Silicon Valley. Small businesses also still get more loans approved by small banks than by big ones. Navigating bank failures involves getting creative If you don’t want to go through a bank at all for capital, think about the U.S. Small Business Administration, online lenders (where terms are usually easier but the interest rates and fees are higher), or a credit union.  Credit unions also offer traditional banking services and come in sizes ranging from small and local cooperatives to large institutions with a nationwide presence and thousands of participants. Compare credit unions using the same factors you’d use when shopping for a bank: fees, customer service, branch locations, online access, and so on. They’re also not-for-profits, so your fees might be lower, which is a nice little cherry on top. Finally, there’s the more

Business Tax Planning

New FinCEN Reporting Requirements for San Francisco Bay Area Businesses (Part 2)

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Memorial Day doesn’t always mean rest for the small business owner — depending on what kind of industry you’re in. There’s often a lot of hustle around national holidays (special promotions, big sales, holiday weekend shopping). And debt ceiling deals to make, apparently, since that’s what our government was working on over the weekend. Some notables: What a way to spend a holiday weekend. Even with any “extra” in your arena, I hope you had a moment to enjoy some beginning-of-summer weather and something off the barbecue.  A few weeks ago, I promised a part two on the FinCen reporting requirements. And today, I’m going to deliver. As of next year, thousands of small companies will have to start reporting information on their owners, thanks to the Financial Crimes Reporting Network (FinCEN). The agency looks to fight financial criminals, and therefore wants small companies and corporations to share information in the spirit of saving us all from the crooks. Before I share too much, let me say: This is something you’ll want to make sure you pay attention to. There are some exemptions, so read on to know if your business falls in that purview. And if it does, my team and I can help with the nuances of it for your San Francisco Bay Area business. When you’re ready for that, we’re right here:Patti (408) 775-7790 Gale 408-775-7800 So, what does that look like for next year, and what do you need to know?  Let’s have a look. New FinCEN Reporting Requirements for San Francisco Bay Area Businesses (Part 2)“With great power comes great responsibility.” – Uncle Ben, “Spider-Man” If you don’t know about this new requirement popping up for scads of small businesses, it might come as a bit of a surprise — which is why we’re going to look at it today. A few weeks ago, we quickly overviewed this reporting requirement. Let’s look at a few more details about what exactly the feds want to know.  ‘Corrupt actors’ To refresh your memory: FinCEN looks to implement parts of the Corporate Transparency Act that govern the access to beneficial ownership information, or BOI. The reporting regulations kick in next January 1. They require most small corporations, LLCs, and similar entities created in or registered to do business in the U.S. to report information about their beneficial owners. The information will go into a database that helps track “criminals, corrupt actors and anyone trying to hide ill-gotten gains in the United States” to the inspection of law enforcement here and in other countries.  The feds claim that the states (the level of government where shell companies register, if they register with anybody) can’t currently do enough to track international bad guys who might be setting up shop. Who do they want? So, they want information on beneficial owners. Who exactly is that?  In general, a beneficial owner directly or indirectly exercises “substantial control” over a company — or owns or controls 25% or more of the “ownership interests” of the reporting company.  “Substantial control” can involve all the company’s senior officers or anybody directing or with most of the influence over big decisions for the company. “Ownership interests” can include simple shares of stock and equity as well as more complex debt instruments and trusts. You’ll have to report four pieces of information about each of your company’s beneficial owners via a FinCEN website:  These documents include a valid driver’s license or government-issued ID, which includes a U.S. passport. If you don’t have any of those, your reporting company can use the ID number from a non-expired passport issued by a foreign government.  Reporting companies created after next January 1 will have to provide these four pieces of information and document images for company applicants. An “applicant” can be whoever files the document that creates or first registers the reporting company and whoever is primarily responsible for directing or controlling the filing of the document.  No reporting company will have more than two applicants (for example, the founder and the filer of documents).  Does my company need to report? The rule identifies two types of reporting companies: domestic and foreign.  A domestic reporting company is a corporation, limited liability company (LLC), or any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe. It’s the same for a “foreign reporting company” except that it’s formed under the law of a foreign nation and is registered to do business in any state or tribal jurisdiction.  FinCEN expects reporting companies will also include limited liability partnerships, limited liability limited partnerships, business trusts, and most limited partnerships.  Twenty-three types of entities are exempt: certain types of banks and credit unions; some securities brokers and other types of companies registered with the SEC; some companies associated with insurance; and public accounting firms and some utilities. (You can see a list and more details here.)  (Many of these, by the way, are already regulated by the government and already disclose their BOI information.) Reporting companies created or registered before January 1, 2024, will have just until New Year’s Day 2025 to file their initial reports. Companies created or registered after January 1, 2024, will have 30 days after receiving notice of their creation or registration to file.  Observers have said that roughly 32 million reporting companies are anticipated in the first year of reporting.  Yeah, that’s a lot. Is the database safe? Naturally, you’re probably concerned about how safe this database is. Generally, FinCEN can release your BOI “under specific circumstances” to:  FinCEN says the IT system will be cloud-based and “will meet the highest Federal Information Security Management Act (FISMA) level” — which basically admits that a breach would have “a severe or catastrophic adverse effect.”  You can’t argue with that, no matter how you may feel about the new regulations.  It’s natural that you’d have more questions on this FinCEN reporting requirement and now would be the time to sort out the details as they

Business Growth

When Your San Francisco Bay Area Business Might Need a Valuation

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We’re nearing June 30 (the mid-year marker), which is a very smart time to move into a different gear in examining your business’s financial situation. Because, like the good business owner that you are, I’m sure you kicked off Q1 with a bunch of exciting goals and objectives for 2023. So, now that we’re nearing the end of H1, it’s a good idea to check in on those goals.  Consider how you’re feeling about your business right now. Are you making progress toward the growth you initially envisioned? Or are you growing in ways you didn’t anticipate? And don’t forget about all those valuable business and client relationships. Measure those too. Take some time to reflect. If your business isn’t quite on the path you intended in Q1, it’s not a crisis. Adjust. And I’m here to help you do that: (408) 775-7790 Doing regular checkups on your San Francisco Bay Area business means you can find a firmer footing as you move ahead. It’s one of the reasons I am continuing to address business valuation and why you should consider it.  Today, let’s dive more into when said valuation would be really helpful to have… When Your San Francisco Bay Area Business Might Need a Valuation“People know the price of everything and the value of nothing.” – Oscar Wilde  Your business will have many milestones when you’ll have to know how much it’s worth. What are some?  Last time, we looked at how a business valuation examines your company’s assets and liabilities, earnings potential, management, and assets’ value. When done right, valuations are expensive for even such non-litigious purposes as a sale, a merger/acquisition, or an owner’s exit. You might still need a valuation of your business in situations you haven’t thought of.  You want one ready when the time comes. Let’s look at the why and the when.  Sale price We business owners know that buyers and sellers entertain wildly different ideas about how much something is worth. The first and obvious occasion where you’ll need a valuation is if you’re planning to sell your company, especially if your company is worth more than similar companies in the same market. You’ll need an accurate starting point for negotiation which allows you to sift prospective buyers faster.  This can also be important when you’re planning to exit your company – whether you’re thinking of selling soon or several years from now, it’ll help you to have a solid idea of what your business is worth.  Looking ahead, if you’re like most business owners, your business constitutes a lot of your personal net worth. Knowing your equity in your company as far ahead as possible makes the planning of taxes and retirement (if you are retiring) easier. Two points:  Financing Getting a loan from a bank or capital from investors is another time a valuation comes in handy. Beyond lending you credibility, a documented and objective measure of your company’s worth, strengths, and future will usually speed up the approval process. (By the way, the more substantial the credentials of the appraiser who did your valuation, the more seriously a lender or investor will take your valuation.)  If your company looks for a loan through the U.S. Small Business Administration, you can perform your own valuation if you look to finance a quarter-million dollars or less. You do need “an independent business valuation from a qualified source” for greater amounts or “if there is a close relationship between the buyer and seller,” such as deals between family members or business partners.  Other reasons Litigation: A document that you want to stand up in court for divorce, a lawsuit, or a partnership dispute must be excruciatingly detailed. Your valuation will be used in discovery, and there may be legal requirements regarding its type and depth.  Expect to pay more for this kind of valuation – and make sure to have it done by the most experienced and credentialed valuation expert you can find and afford: That professional’s credentials will have to stand up to a dispute in front of judge and jury.  Company initiatives: Nothing helps you know where you’re going better than knowing where you are. A complete valuation helps you plan your company’s sales and operational initiatives for the future. Clearly, biz valuations can help you in many situations. But how can you make sure you’re getting the best one for your money? We’ll help you out with that next time.  I’m here to help with whatever your San Francisco Bay Area business needs, whether it’s talking more about setting up a valuation or analyzing your financial data to make sure you’re on track to reach your business goals this year. In your corner, Patti ONeill and Gale Bergado

Business Growth

How San Francisco Bay Area Owners Can Measure Business Value Correctly

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There’s this comparative analogy about what makes something American that people like to use: “as American as apple pie.” But, I kind of think we should update that comparison to “as American as starting a small business.”  Not as catchy, I know (or as yummy). But, it’s just the truth. Small business ownership is the epitome of independence. Don’t want to work for someone else? Don’t want to depend on someone else to pay your bills? Don’t want to follow someone else’s rules and regulations?  Then start something where you call the shots and own the profit. And that’s what you did. You had a dream, and you made it happen. And your San Francisco Bay Area small business, along with hundreds of thousands of others, are the spirit and backbone of this economy. So, when you’re watching all those fireworks “bursting in air,” know that, in a way, it’s celebrating people like you who have built something valuable. Your business has value in our way of life beyond the dollar signs it produces.  There might come a time though, when you want to know just how valuable it is and how many zeroes are actually attached at the end. Say you want to sell your little empire or exit it and hand the reins over to somebody else.  That’s when you want to consider getting a business valuation. But when you do, you’ll want to make sure the assessor is taking into consideration all the various aspects that affect business value for you. Even when the assessor is qualified, there are still elements of your business and the market you serve that might get overlooked in the process. Let me explain what I mean here… How San Francisco Bay Area Owners Can Measure Business Value Correctly“When things go wrong, don’t go with them.” – Elvis  In our previous two articles, we covered what goes into a business valuation and why and when you might need one — from M&As to divorce. By now, it’s apparent that a valuation can be an important tool for running your company… So it’s especially important to realize what could go wrong with one. Here’s a look at some of the biggest potential trouble spots to determining business value.  Devil in the details A business valuation is a waste of your time and money if it uses wrong or incomplete models. Let’s go through these here so you can check them along the way — and never hesitate to question your valuation specialist. You’re the one paying for this, after all.  Generally, whether the valuation primarily examines your income/earnings, market standing, or overall assets, it should address your company’s non-operating assets and liabilities, taking into account past litigation, tax problems, interest-bearing debt (especially as rates rise), and owners’ worth as related to the business.  Among other possible business value assessment problems are:  Who to look for and what to ask Just as it isn’t cheap, proper valuation is no ad-hoc skill. Look for the right qualifications.  For valuations for some of its loans, for instance, the U.S. Small Business Administration lists such credentials as Accredited Senior Appraiser, accredited through the American Society of Appraisers; Certified Business Appraiser, accredited through the Institute of Business Appraisers; Accredited in Business Valuation, accredited through the American Institute of Certified Public Accountants; and Certified Valuation Analyst, accredited through the National Association of Certified Valuation Analysts.  The questions to ask your valuation profession depend on why you want your business value. If you are:  If you want to do a little preliminary work before shelling out for a valuation pro, M&T Bank also has an online tool to use for a rudimentary valuation of your company. As you can see, a valuation of your San Francisco Bay Area company is a big job — and a really critical one. These are just a few examples of what to watch for.  Need a valuation for your company? I can give recommendations specific to your situation and help ensure it’s done in the way most beneficial for your business. Just reach out. I’m right here: (408) 775-7790 All the best, Patti ONeill and Gale Bergado

Business Growth

Cutting Costs in Your San Francisco Bay Area Business Right Now

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Though things might be tight economically for your San Francisco Bay Area business, keep in mind, cutting corners can become a real issue. Take for example fake reviews that are so pervasive online. Some business owners are tempted to buy reviews to get their product or service seen online. If you’ve ever done that or been tempted to do that, let me just say: DON’T.  If Google catches it, they’ll not only flag the review, they’ll tank your website rankings. And now, the Federal Trade Commission is proposing to slap big fines on businesses that do it (up to 50k for each fake review… YIKES!).  I also saw during the pandemic that business owners were falsely collecting PPP and ERC loans to get a free handout from the government when they didn’t actually need it. The IRS is on the hunt for those kinds of people right now — look at this 53 million in PPP fraud case in north Texas.  What I’m getting at here is you don’t have to choose these routes to help your business in difficult times. And even though times continue to be difficult financially, there are options for you to help your business survive the inflationary chokehold on it. That’s where I want to go today. Instead of cutting corners, let’s talk about cutting costs and helping you find your way right now. Cutting Costs in Your San Francisco Bay Area Business Right Now“The slightest adjustments to your daily routines can dramatically alter the outcomes in your life.” – Darren Hardy Nobody needs to remind us small-business owners that we’re yet again in tough times… still dealing with inflation at about 4% year over year, coupled with nagging and sporadic supply-chain problems and all the other troubles that go with having your own company. Tough times often mean tough decisions. If you have to make cuts, where and how do you decide to do that — for the good of your company, your staff, and yourself? The following are some areas you should consider. Cutting Costs Tactic #1: Pricing Let’s look at the other side of the coin for a second: raising prices. I know what you’re thinking, but raising prices doesn’t raise eyebrows like it did a few years ago. The key question that remains is: Raise by how much?  Before you calculate your own new higher average costs and just slap that down across the board, ask yourself: Do you stand out? What makes you special? Why should your customer pay you? Special services are worth more, and customers know it. Loyal customers will pay more, too — for a while. What’s your competition’s price point and range, and how does it compare with yours? If yours is higher, don’t automatically assume that you have to match your competitors’ deals. Do you offer your customers something the other guy doesn’t? (Be honest.) What do you offer that draws in most of your new customers?  When raising prices, do it gradually and be upfront with customers about price hikes. People will put up with more if they’re kept informed.  It’s possible that maybe your product line needs a revamp. Low sales figures are your first obvious sign of a poorly performing product. Other signs include marketing costs that are too high or price points that are too low. Also watch for bad customer reviews.  Cutting Costs Tactic #2: Making shifts with suppliers Lately, these folks seem intent on hiking prices at will. You may also be dealing with years of consolidation, another ingredient for our perfect storm.  Suppliers may have a lot of companies wanting their goods right now. What if you don’t negotiate with suppliers but their other customers do? You can wind up with poorer products or service with higher prices as your supplier makes up for deals they cut with your competitors. Before you negotiate with suppliers, though, set a price in your head that you’re willing to pay. Double-check that your payment record is good and learn all you can about your suppliers’ expenses. (Wholesale prices are easing but still went up 2.3% in the past year.)  Cutting Costs Tactic #3: Looking at your staff If it comes to this point, there’s probably more arithmetic in reducing pay/hours than any other cost cutting. Who does what and for how long? Who could do each other’s jobs for less money? Communicate with your team that keeping the lights on is more important than temporary payroll reductions; you might even find one or two people willing to volunteer cuts.  Other moves:  Cutting Costs Tactic #4:Examining additional areas Recurring costs. Rather than utilities and other necessities, these are your subscription services that get renewed automatically, usually every month. If forgotten, they drain a lot of cash. Review them frequently.  Insurance. This cost could change year to year — and auto-renewal might be costing you too much for coverage you don’t need anymore. You can also likely save by bundling coverages.  Supplies. Ordering online has made saving money in this category easier. Amazon’s subscribe and save service is one example of how you can find cheaper prices for a galaxy of stuff and even cheaper shipping when you bundle deliveries. Deciding where to make cuts in your San Francisco Bay Area business is tough, especially if it comes down to having to drop some of your staff. I’m always here to help, answer questions, and offer ideas. Don’t hesitate to reach out:  (408) 775-7790 Cheering you on, Patti ONeill and Gale Bergado

Business Tax Planning

Tracking Your San Francisco Bay Area Company’s KPIs Effectively

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Raise your hand if you or your workers, in any way, still work remotely post-pandemic.  It’s a common enough reality — maybe more so now even than 2020. Working in sweatpants from the comfort of your San Francisco Bay Area home is infinitely better than dress shoes and uncomfortable desk chairs — and cheaper than paying high business space rent prices. But with so many companies going remote and giving up their brick-and-mortar space, it’s caused a bit of an office space crisis in major cities like NYC (up to 20% of spaces being unused nationwide). That’s looking like an 800 billion loss for urban office real estate value —  that’s a KPI to pay attention to… and figure out alternatives for (like converting said offices into rental properties). Getting creative with turning losses into profits is an important skill for you as a business owner these days. And I know you understand that. The past three years have forced you to figure out ways to adapt to new realities.  But you couldn’t do it without these really important things that are really the central figures of your business. Yes, I’m talking about KPIs.  But utilizing these performance indicators the right way is more than just printing a report. It’s knowing which ones to set up, how often to track them, and how to organize them into something coherent you can actually use. And I want you to be able to USE them to keep you sharp and well-positioned for every economic moment — opportune or difficult. Your success matters to you… and to me. So, let’s start that conversation here: (408) 775-7790 Tracking Your San Francisco Bay Area Company’s KPIs Effectively“Performance stands out like a ton of diamonds.” – Harold S. Geneen Measuring performance in your company is an indispensable tool for small business owners. The standard metric for that measurement: the KPI — or “key performance indicator.”  KPIs are performance quantifiers — recorded and tracked numbers — that have a specific and clear value, such as a dollar figure for increased sales over a certain period. They’re how you see at a glance if your company is on course. You create KPIs by setting that goal — such as a doubling of profits in the next three years — and working backward to decide what has to happen and when. In many ways, KPIs formalize an instinctive method you have for measuring incremental success. The concept falls down, though, if you don’t track your progress. So, how should you do that? And how often? Setting it up This depends on your company’s goals, but some common KPIs look at revenue (average profits, total revenue, profit margin); employment stats such as turnover, employee performance, and vacancies; customer service (average call time, customer satisfaction); customer retention and acquisition (and the revenue associated with each); and marketing (sales generation, overall effectiveness). Your specific industry might dictate use of other KPIs, such as website traffic for an e-commerce company, table turns for a restaurant, or rejections for a production line. Among other points: There’s no set number of KPIs you should be tracking. It’s better to use fewer KPIs and make sure the ones you use are accurate. For each goal you set, set only around six KPIs (that of course correlate to that goal).  How often you should be tracking KPIs Basically, you’re balancing frequency and time when tracking KPIs — giving concepts a chance to mature but not so long that they spray too far off course.  Some goals (such as annual revenue or employee tenure) can be tracked quarterly or semi-annually and still have time to make adjustments. Other KPIs are more immediate in their lagging/leading indicators. The actions/initiatives that those measure can have a quicker impact on your bottom line.  Customer retention or conversion rates, for instance, require more constant and steadier attention and lend themselves to faster, easier adjustments. For these KPIs, monthly tracking is better.  Here’s another factor: How much time and money do you need in order to adjust once you spot a problem? Let’s say your KPI shows you need to hire two new salespeople to meet an annual revenue goal. That’s a lengthy adjustment involving advertising, time, interviewing, onboarding, and training. The sooner you spot that KPI, the better — meaning tracking frequently is best. It’s the same for product development to boost sales and revenue for the end of the year.  But suppose your KPI shows your customer service people aren’t answering calls within the specified number of rings or customer service emails are sitting unanswered for too many hours or days? That could be a quick adjustment of bringing the problem to the attention of the department manager or talking to the reps directly. The quicker the needed adjustment is to make, the less frequently you have to track the KPIs.  You have a lot on your plate, I know — so set your calendar app to ping you weekly or monthly when it’s time to look at your KPIs. Do push to track consistently. The whole exercise loses effectiveness if you don’t.   Organizing the info You want to go visual with the reports, rather than using too much text. The quicker the information can be digested, the quicker you can make decisions using it. (This becomes even more important when considering multiple KPIs. Consider using different colors for different departments.) As charts and graphs come in just enough formats to be completely befuddling, it’s best to look at a few examples as you figure out how to report your KPIs. A lot of small businesses also get started with Google Analytics, (which experts do say that like, many freebies, can take you only so far in your presentations).  When you start out tracking and using KPIs in your San Francisco Bay Area business, it can feel as much of an art as it is a science. Give yourself time to get the hang of it, and your future self with thank you for making it so much easier to plan strategically for your

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