Going out (of 2021) with a bang!
Ernie Neve, CPA
December 8, 2020
First of all, I completely understand how the holidays and the end of a year like this one can lead to boatloads of stress and overwhelm, but just stick with me for a few minutes…
2021 is coming, and the rules, even though they seem to be in flux in a lot of places, still apply.
Right now, you’ve got to make time to ensure that things like any charitable contributions, retirement accounts, and maybe even basic bookkeeping are all sorted out and caught up.
Plenty of times, as the calendar begins to push into the last few weeks of the year, shrewd operators are looking and calculating when some work needs to be fulfilled – do you ship in the last week of December or wait until the first week of the New Year?
Of course, some of this comes down to how you have your accounting set up – cash or accruals – but, since we’re operating in an unstable environment (and likely will be for some time), it might be a great idea to sit down and discuss how your business handles and documents income.
I’ve given this kind of advice several times this year to business owners with a wide range of profits and I stand by it: our economy is in flux and a lot of money is “out there” so how your business holds on to it will impact your success.
This isn’t just “tax” advice, either! Companies who can act quickly because they have cash reserves are going to be able to negotiate better deals for themselves.
Companies who are forced to rely on credit for capital purchases are going to be in trouble.
There’s a third category here, too, and that’s those savvy business owners who are flush with cash and have the negotiating power to use that capital to secure expansion, not just spend it.
Case in point? I know of one business owner in southern California who was able to personally secure his business expansion, but to do so by bringing in investors with their own capital who knew his plan would work. ‘
Those investors put up money, but he didn’t – he simply shared his systems with the investors in a careful, well documented way that expand his potential profits while avoiding many of the pitfalls of traditional franchising.
As the world and the economy moves int o2021, I think this is something we’ll see a lot more of, and that brings me to my message in this email:
You can grow your business, and you can do it easily, but it’s going to take creativity to do it now and for the foreseeable future.
It’s also going to take a partner with a sound knowledge of how your expansion will impact – and be impacted – by the tax laws (both those we have now and the ones that are sure to be enacted in the coming months by our new administration.)
Pick up the phone and let’s schedule a call to dig in to those plans and goals and see exactly what you can and cannot do – and how easily you can set yourself up for success.