4 Tips for Surviving Scary Situations

Ah, Halloween. A great excuse for dressing up like a princess, stuffing our children into pumpkins, and of course, eating lots and lots of candy. And since it is that time of year, let’s look at some scary situations that may arise in your business.


1. Eat that Frog - From Mark Twain, via Brian Tracy; Mark Twain once said, “If the first thing that you do when you wake up in the morning is to eat a live frog, you’ll have the satisfaction of knowing that’s probably the worst thing that’s going to happen to you all day long.”

Okay, so you may not want to eat a live frog; however, don’t ruin an entire work day by procrastinating. If you have a tough phone call to make, collections that need to be made, or have an employee to discipline, get it done first thing. The rest of the day will be easy after that.

2. Interview questions – So you are ready to make that new hire, but you aren’t sure what questions you can ask because you think the Human Resource Police will get you?

Fear not, entrepreneur! You can check out the do’s and don’ts of interview questions from monster.com, here. Monster.com….you get it….because of Halloween? Yep, we thought it was clever, too.

3. Networking – One of, if not the biggest source of business for entrepreneurs, is referrals. Then why do so many entrepreneurs put off networking? Because it can be scary! You are filled with a room of strangers and you don’t know what you should do.

Don’t worry. They are just like bees. They are more afraid of you than you are of them. Or is that snakes? Anyway, you can be successful by having an elevator pitch handy, listening intently to what the other person is telling you, and simply collecting a few business cards.

4. Reading an Income Statement – Do you ever pick up an income statement and feel like you are playing a game of “Where’s Waldo”? There are a lot of numbers and it can be a little overwhelming.

Key things to look at are how you compare to your year-to-date numbers from last year, how much you are spending on expenses compared to other businesses in your industry, and if you are making enough profit.

And as always, you can always consult your favorite CPA firm for any assistance!

QuickBooks Tip - Perform Simple Calculations in Any Number Field

Did you know that in many input forms within Quickbooks (bills, checks, invoices, etc.), that you can make simple calculations in any number field?  No?  Oh you are missing out.  We just love this.  But we love numbers too, so we may just be weird cool that way.

So, if you’re creating an invoice/bill/check/whatever and you need to quickly add, subtract, multiply or divide, you can highlight the field you want to use and quickly make the calculation.

Let's say to add, enter the first amount, then press the “+” key. Continue adding each number followed by the “+” key. After you’ve entered the last number, press the “Enter” key to total your numbers and put the total figure in your amount.

This is much easier than switching back and forth between your calculator and the open QuickBooks screen.

Tell your old tape calculator we never meant to hurt it.  It's not them, it's us.

Kid President's 20 Things We Should Say More Often

Love us some Kid President.

Fun Fact - He is from Henderson, TN.  Not Hendersonville, TN, but close enough.

Miscellaneous Deductions Can Cut Taxes

IRS Tax Tip 2014-19, August 15, 2014

You may be able to deduct certain miscellaneous costs you pay during the year. Examples include employee expenses and fees you pay for tax advice. If you itemize, these deductions could lower your tax bill.  

Here are some things the IRS wants you to know about miscellaneous deductions:

Deductions Subject to the Two Percent Limit.  You can deduct most miscellaneous costs only if their total is more than two percent of your adjusted gross income. These include expenses such as:

• Unreimbursed employee expenses.
• Expenses related to searching for a new job in the same line of work.
• Certain work clothes and uniforms.
• Tools needed for your job.
• Union dues.
• Work-related travel and transportation.

Deductions Not Subject to the Two Percent Limit.  Some deductions are not subject to the two percent limit. They include:

• Certain casualty and theft losses. Generally, this applies to damaged or stolen property that you held for investment. This includes items such as stocks, bonds and works of art.
• Gambling losses up to the amount of your gambling winnings.
• Losses from Ponzi-type investment schemes.

There are many expenses that you can’t deduct. For example, you can’t deduct personal living or family expenses. You claim allowable miscellaneous deductions on Schedule A, Itemized Deductions.

For more about this topic see Publication 529, Miscellaneous Deductions. You can get it on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

I Always Break-Even. Or Do I?

One person that knows if he is breaking-even is Jerry Seinfeld.  Well, at least the TV version of Jerry does.  Case in point, in one episode of Seinfeld, Jerry loses a stand-up gig and minutes later he gets another gig.  Then, he loses a $20 bill and finds another $20 in his old coat pocket.  Lastly, his usually down-and-out friend George starts seeing some success, and his usually successful friend Elaine becomes down-and-out.  Everything seems to even out for Jerry or in business terms, Jerry always hits break-even.

Break-even is the point in your business where you are generating enough revenue to pay all of your expenses.  Knowing your break-even point is one of the most important pieces of information that a business owner should know.  Whenever we talk to some of our clients, we find out they do not know what their break-even is.  They feel like they have a “round-about idea of what it is”.  However, this is not good enough to make significant business decisions, such as, purchasing inventory, hiring your next employee, or selling a new product or service. 

Let’s look at the most simple way to figure out your break-even:

Breakeven = Fixed Costs (FC)/Gross Margin (GM)%

Fixed costs are any costs that your business incurs whether you make money or not, such as, rent, utilities, insurance, payroll, etc.

Gross margin percentage is what you make after you pay immediate expenses associated with the product or service you offer.   This could be materials to make the product, payroll for the service, and even other costs associated with creating or delivering the product or service. 

Let’s take a look at the example below to calculate break-even for Miss Natalie’s Sandwich Shop. 

Fixed Costs = $5,000

Rent, utilities, insurance, payroll, etc.

Gross Margin% = 70%

Inventory (food and drinks)

Break Even = $5,000/70% = $7,143

This means that Miss Natalie’s Sandwich Shop has to make $7,143 every month just to pay the bills.  So, let’s take this a step further.  How many sandwiches will Miss Natalie’s Sandwich Shop have to sell to break-even?  Divide the break-even point by average sales price per sandwich.  In this case, the break-even is $8,000 and the average service fee is $5 per sandwich.  

$7,143/$5 = 1,429 sandwiches

This means it will take 1,429 sandwiches a month to break even.  Breaking this down even further, this means she needs to sell approximately 48 sandwiches every day.  Whew that’s a lot of bread, deli meat and cheese!   Knowing her break-even will give Natalie with the information she needs to be successful in making business decisions, such as pricing, when it is time to hire more personnel, marketing needs, etc.