Monthly Archives: March 2016

Why Businesses Fail? – Avoiding common statistics

Ask an Expert, , ,

From our “Ask an Expert” blog – John L. asks –
“You mentioned in your recent article (Why Marketing alone can’t save your business) that a business should focus more attention on fixing common reasons businesses fail before addressing Marketing. What are those issues you are referring to?”

Thank you for the question and reading our blog.  In that article we made the point of when people are searching for a Consultant, the current Google trend is to search for one that will get more business in the door opposed to how to fix a failing business.  My interviews with many Small business leaders shows that many owners may feel Top line revenue is the only thing needed to fix an ailing business, when in fact there is often much more to it than that.  Our concern is that people don’t always know what signs to look for or how to judge the strength of their businesses ability to generate revenue other than looking at a Marketing fix.

So what are the top reasons a business fails?  Our company has researched many different sources to find 2 common reasons.  I have presented this concept to MANY Business Bankers, Accounting groups, Accellerators and Chambers, who ALL agree with our approach.

The Top 2 reasons Business FAIL are:

  1.  Lack of Education – Business Acumen & Experience
  2.  Lack of Timely or Appropriate Funding
 Business Acumen is a combination of a variety of skills, experience, decision making and planning ability.  Many people have a specific expertise which may be enough to start a business, but other skills are needed to build a successful business and this creates a skills gap.  Not gaining or hiring for those skills can leave a gap in Business operations, which over time devalues a business.
Appropriate funding refers to funding at different phases of business growth.  Start up funds, seeking capital growth funds or credit line at appropriate times, and managing Revenue capabilities (or cost controls) that maintain budgeted margins.

Some common statistics –

50% of Small Business fail the First year

65% of Small Business fails within 3 years

~80% of Small Business fails with in 5 years

of those

 

80% of Start ups fail due to lack of Management Knowledge and skills

* SBA,D&B,US Census, Inc Magazine

 

92% of Small Business fails due to poor

Management Acumen

                    * Dunn & Bradstreet

Failure is 2X more likely due to Quality of Management than due to External Factors

                                                          *National Bankruptcy Annual Reports

90% of FAILED Business is due to lack of Quality Management.

of these:

48% classified as incompetence

42% classified as inexperienced

                                                                        *IMC (International Management Consultants)

These are pretty sobering statistics and speak to the point my business continually addresses which is;  there are multiple areas to build upon to strengthen and grow a business.  There is a growing need for people capable of Holistically Assessing and Planning.  Where does a business person start when they want to look at their own business you ask?  Start with these common traits we have found that support the 2 Most common reasons listed above.

Reasons a New Business FAILS

  • Lack of understanding the effort needed
  • Inadequate financing
  • Lack of planning
  • Unrealistic expectations of success & salary
  • Inability to commit
  • Unwillingness to take responsibility

A key problem for Start Up Business is that they don’t know what they don’t know.  Seeking the advice of people that can both Mentor & Lead them and their plan development helps significantly .

 

Reasons Existing Business FAILS

  • Poor cash flow management
  • Seek funding too late
  • Absence of Performance Monitoring
  • Lack of target Audience research
  • Poor inventory management
  • Failure to identify your own Strengths Weaknesses (SWOT)
  • Insufficient professional resources

Anyone who has run an Organization (Profit or Non Profit) knows how many hats you have to wear.  There are so many obstacles that come up, you become seasoned in researching and solving your own problems.  The difference between a Pass or FAIL here we have found is often a combination of 3 things.

  1. Over confidence in your own assessment capabilities
  2. Misinformation
  3. Closed mindedness

 

In post mortem interviews with owners or Executive Directors, a common response is “I should have this, or I should have that”.  Retrospection shows the same 3 conclusions listed above.  There are many other complicating issues and each case is unique, but if you are in a position where you need to do something (and quickly) to “turn things around”,  I suggest looking (in addition to Marketing) at these issues to insure you can make the most of your revenue.

Last thought – If you are just looking to increase your profit line by a few points, improving internal efficiency can add as much to your profit line as adding to your Top line revenue.

To learn more about our unique Assessment and Efficiency Services  ContactUs-Gray-Primary-16

Carpe diem!

 

 

Why Marketing alone can’t save your business

Conversations with a Consultant, Marketing, , ,

During a recent google search, I found an interesting article that listed the top 50 questions asked to “Consultants in 2016”. Literally 48/50 were related to some form of Marketing, Social Media or SEO.  While those are very important reasons to look for an expert, I am concerned(and my business shows) that many businesses are missing out on other fundamental ways to help their business.   Given National closure rates are so high for Small/Medium Businesses, do people think Marketing will save their business?  What are the top reasons a business fails and how does Marketing help avoid that?

The number one concern a business owner should have is how to maximize their businesses ability to generate revenue.

Marketing is one of the 4 most important areas to develop and can not be overlooked.  But not developing the other three can jeopardize the sustainability of a business. I have seen too many instances where an organization improved efforts to increase the customer base through Marketing, only to find the business couldn’t capitalize on the new found popularity or volume.  If your first reaction to this is “that’s a good problem”, you are wrong.  It is a problem that may hurt your business more than it helps it.  To increase revenue in a sustainable way, you need to consider building on all 4 key areas.

The 4 key areas (we call them Pillars)

Products – People – Operations – Marketing

–M.O.R.E. Business Assesment©–  by C.S.SimonsConsulting

Case in point –
A classic example is the restaurant that creates a great coupon that is hard to say no to. People come in droves and crowd the restaurant. Tables are full, the Bar is crowded and there is a wait list as long as your arm.

Successful Marketing right?

Then things start to go wrong, the food comes out late, servers become overwhelmed, orders begin to get switched around and as a result the tables don’t turn. Then the customers at tables start to become frustrated and before you know it, they have such a bad experience, they don’t want to return. People waiting for a table end up waiting twice the time they were quoted.

Perhaps the house buys a drink or dessert to appease, this calms many people but that may not work on everyone.  Customers take out frustration on your staff.  Your staff takes out there frustration on each other.  All in all, it turns out to be a tough night for that restaurant.

But the pain continues because customers who want to vent are just getting started.

Customers proceed to tell there friends what a bad time they had when they’re at work or through social media and this can linger for some time.  So while the coupon brought increased sales initially, the other areas of the business that weren’t ready for this suffered.  The servers don’t make($) what they expected due to the restaurant failing, the kitchen crew is frustrated because they weren’t set up for that kind of business, and the product quality suffered due to the volume.  Marketing people call this a successful campaign and while sales were up temporarily, they then slumped even lower than before the coupon was sent out.  Damage has been done.

We all know this story, and it can happen in all industries.

This problem was created by an over emphasis on Marketing and not insuring that other important components needed were addressed.  Generally this is a type of ad hoc marketing, and don’t confuse it with “strategy”. A Business Strategist would not only look at ways to get more people through the door, but make sure the business was equipped to handled the increase.   I have literally seen Groupon tactics destroy businesses, they will get people to your business, but it is unlikely you will make money off the new business or create repeat customers (which is what every owner  that signs up for that service wants).  I am all for Marketing.  Marketing/Advertising is to increase demand or volume, just make sure your business can meet the demand you create.

So if Marketing won’t save my business, what should I look at?

FACT:

90% of business fail due to lack of quality management

                   48% due to incompetence

                        42% due to inexperienced leadership

   -International Management Consultants, USA

The SBA, SBDC, Dunn & Bradstreet, IRS &  Census bureau will also show similar statistics.

4 ways to achieve a sustainable growth in your revenue
  1. Learn to evaluate your business.  When you are in a position of growth, expansion or even for a limited promotion like the coupon in the case study above, make sure you look at the 4 key area’s needed to generate revenue for your business.  If any of those area’s slip during a period of increased advertising, understand it will jeopardize the results you had planned.  Maintaining product standards, Quality Assurance measures, and Brand management are the tip of the iceberg to insure daily execution.  Daily execution is what your customer base will judge you by and ultimately determines everything from customer loyalty to profitability.  Much more information on these 4 areas (Pillars)can be found on our website.
  2. Don’t confuse sales with growth.  Sustainable businesses create strategies that take all 4 areas and develop each of them to meet desired goals.  Top line sales don’t always translate to growth especially if you can’t sustain that level of revenue.   Training everyone in the company to focus on all 4 areas can lead to rapid, organic growth for a company that is sustainable.  In short, develop your people and they will develop the business.  Give them systems and tools that help them achieve their job.  When systems, tools, training, and goals are all focused on developing your products, then you have something to Market.  Never Market under the “Strategy” these others will “fall in line”.  This is a common mistake and they seldom do.
  3. Don’t over rely on online development.  Unless you are strictly E-Commerce.  As mentioned above, 98% of the questions searched about consultants were for Marketing based consultants.  Yet, Marketing usually doesn’t make the top 5 reasons why businesses close.  Marketing Consultants are important in today’s business world and C.S.Simons Consulting works with several extremely valuable Marketing experts, but there is more to developing your business than a Marketing Expert can offer.  They are part of the solution, not the whole solution.
  4. Know how the pieces connect.  The business “Pillars” I refer to have overlap and it can be confusing as to how they fit together to build a business.  Further more, what is needed to support each pillar can change by industry, by business size and even business age.  Knowing what is needed to get you to the next stage is the key to growth & sustainability.  If you think all your organization needs to grow is better or different Marketing, I strongly recommend you look at the other pieces of the puzzle to.                                                               LearnMore-Red-Primary-16

All businesses need to Market.  Many outsource this for a variety of reasons and many of them are good reasons.  The point is to understand the impact of the marketing tactics to the other sides of your business before they are launched.

If you really want to increase your revenue or strengthen your business make sure you are defended against the top reasons business fail in the first place!

Carpe diem!

ContactUs-Blue-Pill-16

 

 

 

 

Bad Hiring habits are a Cancer to your business

Conversations with a Consultant, People, , ,

A strong team knows what it needs to accomplish and is comprised of people capable of doing it.  It is management’s job to ensure there are tools to get the job done and the right people in place to do it.  It is leaderships role (often the same person as the manager) to ensure the direction the team is working towards produces the results needed to grow the business in a strategic manner.  It is my experience that 99% of the time I encounter a manager, owner, or supervisor that is “stressed out” or frustrated with results in the business, one of these 3 areas are to blame.  Here is an excerpt from our white paper          “5 Keys to Effective Operations Management” that focuses on what is generally the root of most problems.

How the problem spreads – Bad hiring practices

How do you determine what you ask your staff to do?  Do you have a written plan for them to follow?  Even for a small business, I highly recommend having a written job description for all positions.  It needs to give an overview of the position, and key responsibilities at minimum.  It is imperative that employee’s know what they are responsible for.  “Everything” or “whatever is needed” isn’t the foundation an employee needs to be successful.  This also helps you plan what is yours and others roles are to meet the needs of the business.  This is one basic component of what is referred to as “Labor Optimization”.

But more importantly, when you are hiring staff, how do you determine what you need them to do?  Some small business owners become overwhelmed and hire staff long after it is actually time to hire.  They are so busy; they will almost beg someone to work for them.  This is often referred to as “ass’s and elbows hiring”.  Because you don’t have the time to properly plan what you want them and need them to do, you tend to hire based on personality or friendship rather than behaviors and proven skills.  Managers tend to see what they want to see in the candidate, and don’t evaluate the true work habits and skills they have.  This type of hiring will lead to bad outcomes.  Bad hiring is bad business, it’s like a cancer and will consume what surrounds it!  Generally you end up terminating the person or they quit and you are back to square one.  Most often you repeat these mistake and fall into a bad habit.  That becomes very taxing on the business and all who pass through it.  Poor labor practices are one of the key reasons good businesses fail.  Having an employee quit looks bad on the business, and employers must consider that.  It’s not the employees fault if you hired wrong and didn’t set them up for success.  Yes, that is a key phrase.  “Set for Success” and should be the motto of every hiring employer.

It is your responsibility for hiring someone that can succeed and will succeed after training.

If they don’t succeed, it is often the businesses fault. Trust me when I say that most court rooms tend to agree with this.  Once hired right and trained, the ball is in their court (employee’s).  Pun intended.

Here is an over simplified plan for what you do to avoid this cancer to your business.
  1. It is crucial to plan out everything that is needed over the course of a week for the business.  You need to include as much detail as possible when doing this.  Even the smallest tasks should be listed (ex. – taking out the trash).
  2. Create multiple levels of job descriptions and start by placing a title at the top of a blank sheet. (Manager, Supervisor, cashier, counter help, etc).  Decide what level of employee will perform each task, and then add it to that job description (entry level, intermediate experience needed, expert, etc)
  3. Then look at each Job Description to determine how many hours to allocate for that job and what the values of those tasks are to the business.  The higher value tasks get the higher rate of pay etc.  If the Job Descriptions seem to fall short on tasks, you can combine multiple job descriptions if needed to ensure it equals enough hours to attract the right sort of candidate.
  4. Use this new description as a template for asking questions of candidates to form an opinion on their level of competency for the position
  5. Create a model of the type of person that would excel at this job.  Think of background, skills, successes, mindset, social behaviors, trustworthiness, team player, etc.

You will also need to consider other aspects when hiring like behavioral based questions to ensure they fit with your brand and culture.  Do not overly focus on personality of the candidate, focus on the behaviors and habits they present.  As you well know, these employees may be the face of your business; they need to fit whatever model you want to help sell your brand.  It doesn’t matter what position you are hiring for, even if your customer doesn’t come in contact with this person, it will still affect your business in the long run.

Successful people tend to find ways to be successful.  Success happens at all stages of life so when interviewing a candidate, dig for anything they have been successful at and find out why they became successful.  Too many hiring managers focus only on experience.  The key is to find someone with a history of success, who is trainable.  Train them and ask them to help build your business….

and they will.

Be picky, you owe it to yourself, and once you have found the “right” person make sure you communicate your needs up front (have them read and initial the Job Description when they fill out the application), and then hold them accountable.

Studies show that good people tend to manage themselves.  Hire the right people and provide clear expectations (Job Descriptions)  and your life could be that much easier. 

To read more about “Creating a Hiring Model”  LearnMore-Red-Primary-16

For other of our “Conversations with a Consultant” series LearnMore-Green-Primary-16

Carpe diem!

Choosing the right Strategy Consultant

Ask an Expert, Operations,

From our “Ask an Expert” series-

John asks;

“In your speech you spoke of the importance of Strategic Planning for businesses of all sizes, what should I look for in a Consultant to help with our Strategic Planning?”

Thanks for the question John,

Businesses of all scale need business strategy that focuses on growth or improvements.  Many businesses realize that periodically bringing in a Consultant to help solve a nagging problem or achieve their next milestone is a cost effective way for improvement.  One problem is that a “Strategy Consultant” comes in many forms and choosing the one that “fits” best for your organization can be daunting. 

Some take complete leadership roles and others facilitate your team through the process.  Depending on your business structure some may want a lot of time to become ingrained before determining a path, others may run most of the project by conference calls or group facilitation.  There really is no “Right way” and there are many variables.  To complicate this further, no two businesses are the same so it is hard to look at a Consultants client list as a means to determine their qualifications.  I always recommend looking at their Successes. How far have they taken their clients? Ask references if they added value and clarity to the process?  Did they achieve what they were hired to do for each client?  Did they exceed expectations?   If so, Where & How?

Its about the results!

Before you begin your search keep in mind that Strategic Planning is a process and not a project.  It is not a one and done task.  To begin there is a process that most consultants will follow to insure the appropriate information is gathered and considered (see below).  Then after the initial plan is written and launched the process continues.  This is where many teams fail.  I have seen senior management complete a plan and hand it off to a manager (to implement) to then not look at it again for a year.  How to manage the “Change” is often left out in the planning stage.

Using metrics to make adjustments is often JUST as important as the original plan is.

 

So to answer the question – “..the most important thing to look for..” is a combination of….
  1. someone who understands this process from start to finish
  2. has the capability to get you to stick to it (more on that below)

 

As mentioned, here is a quick look at the general process followed in a Strategic Planning process.

  1. Listens
  2. Investigates
  3. Researches – Benchmarks, Industry, Interviews
  4. Considers your resources
  5. Gap Analysis
  6. Provides support for your chosen direction
  7. Develops an agreeable implementation plan
  8. Follows up – Continued Relationship

The first 4 are to understand your problem, your industry, your people and your obstacles.  The 5th step is both analytical and Strategic, and steps 6 -8 focus on defining and insuring success for your organization.                                                                                    LearnMore-Green-Primary-16

Musts for a Strategy Consultant

What to listen for in their pitch and confirm in reference checks.

  • Acts as Partner  – Goes to lengths to learn the entirety of the problem and solves it the way you would, or in an easily adoptable way for your team.
  • Goal oriented – keeps project and team on track.
  • Project planner – demonstrates the ability to plan, organize & communicate to all involved insuring key timelines & milestones are met.
  • Past successes – history of creating solutions to permanently solve clients problems.  Determines root cause of problem for organization.
  • Multi level understanding – has the ability to see problem from all levels of your organization leading to comprehensive solutions and reduces implementation struggles.

 

Bonuses –

A person with a complimenting style for your team.  A leader who perpetually develops, enables, supports, guides, informs, mentors, comprehensive, and displays patience with your team.  (Ask references)

 

Some common mistakes made
  1. More often than not, Strategy “fails” during the implementation phase, not during the planning stage.  Use a decision funnel to insure each tactic created can be implemented properly or you risk failure.  Execution is key!  Make sure whoever is calling the shots has an understanding of all phases of implementation.
  2. Goals set during Strategy session do not follow the “SMART” methodology, thus, even if implemented correctly, they are either not attainable or pertinent.  In each case, time, energy, and money have been wasted with little to no reward.
  3. Change is not associated with efficiency or market study.  Due diligence is needed.  Perform a SWOT, PEST or industry specific analysis.  Insure Change is tied to improvements and not just profit.
  4. Ad-hoc strategy seldom works.  Vet everything!
  5. Insuring resources are available at all levels or risk frustrating your workforce or customer base.

 

Final thoughts

The ability for this Consultant to influence decision makers through the entire process should be evident.

  • You should feel some respect for the consultant
  • You should feel it someone you need at “your table”
  • You should want to listen to them

 

Hope this helps,

Carpe diem!

 

Business PhotoC.S.Simons Consulting specializes in Management & Business Strategy, offering 25 years of successes for you to benefit from.  Offering a Shared Risk Platform – Results Guaranteed or you won’t be billed!

 

 

How to be a Great Boss!

Conversations with a Consultant, People, , ,

Many people are thrust into the position of managing others with out formal training in the business world.  People achieve a higher role because they have added value to an organization by either being extremely good at their particular discipline, or have shown exemplary dedication to the company.  The company (or individual) wants to reward that person so, poof!…… you’re a manager!.

The Problem:

Seldom are these people trained and disciplined at the art of management, which results in haphazard “On the Job Training”.  OJT can be costly for all parties involved.  Some of the time this happens to a person that is a “natural” and is good enough at balancing relationships with productivity.  More often than not, these newly appointed “Managers” have no formal training at developing their interpersonal skills, nor even understand the importance of getting people to like their job.  Too often have I heard “ just do it ‘cause I said so”, “I’m the boss and I said so…”, or “joke” about disciplining someone if they don’t do the simplest thing.  Far too often the people that decide to promote don’t see, or don’t have the ability to assess their new manager in these regards, because they are busy with their own job.  The other extreme is having someone in that role that is overly sensitive and doesn’t want to upset anyone, so they do too little.  Both of these are common occurrences  in our business environment and how this change is handled can have a great effect on your businesses ability to generate revenue.

I suspect we can all relate to both of those examples.

So what makes a Great Boss?  Who should be the judge of who a great boss is?  What is the secret to being a Great Boss?  What do employees want in a Great Boss? Lastly, how do you be a great boss in a poor environment?

It comes down to 3 + 1

Every manager needs to spend dedicated time on developing these 3 area’s….

Management basics

Interpersonal Skills

Personal Competency

…….and they need to follow one common trait….

Consistency

10 basic Management rules to follow 

  • All of these rules speak to humans basic needs, and if you meet them while managing, you will find that those stubborn work-born problems seem to solve themselves through your people.
  1. You must show you understand what their job entails, without ever being asked
  2. Show them how to succeed, give them the tools they need
  3. Always train and develop everyone at all levels
  4. Lead, brand first.  Your actions need to be traceable to your company, brand, and business culture.
  5. Be unselfish and patient.  Serve others, not yourself.  Give credit and even if its your accomplishment, give the credit to the team anyways.  Your employees are your most important customers!
  6. Deal with problems immediately, or educate why it’s not a big deal to employee’s that think otherwise.
  7. Find them doing something RIGHT, and make a big deal of it.
  8. Your always “on Stage” someone is always watching you.  Many look up to you.  Everyone judges you.  Don’t make them want to turn the channel!
  9. Set clear expectations, always have a plan, don’t assume they know what you mean
  10. Hold everyone accountable, there are many great teaching moments everyday.

I have no doubt you have seen many or all of these before.  These are taught at many management symposiums.  They alone do not make you a Great Boss.  These will make you respected at your position by most people and likely bring some good results by your staff.

Interpersonal skills 

  • Often this take a large time investment to pay off (thus easy to skimp on) but is a necessary part of being a Great Boss!  This is about relationships, and if a manger has no interest in building relationships, then they will never be a “great boss”.  Older methodologies cite that “building a relationship” with employees is unnecessary or even wrong.  This outdated thinking has been replaced by newer abundance mentality leadership that focuses on the power of synergy (1+1=3). That said, clearly it needs to be an appropriate relationship.  I like to look at careers that rely on relationships for inspiration,  Ambassadors, Project Managers, Sports Coaches/Managers, to name a few.  They know enough about a person to figure out their drives, goals, and shortcomings.  If you, as their manager, find a way during their job to incorporate their drives with their job duties, help achieve their goals (even if goals are outside of work), and improve on their shortcomings, you build on their esteem and you have made an impression on them professionally.  This builds loyalty, which is a key to being a great boss.  It is difficult to discover these motivators without developing a certain relationship.

Personal competence 

  • Specifically with in your discipline.  Many times “the manager” is simply another hat that someone gets to wear.  If you have a role that you perform(separate from managing), you need to insure you maintain your competency with that discipline.  So often people get too caught up in other manager functions and it takes focus away from their specific role.  Your team will notice if you are slipping, if it affects them directly or not.  Many will focus more on what you are NOT doing with your role then what you are asking them to do in their role.  If they don’t respect the job you perform, chances are they will not consider you a Great Boss.

 

 Consistency is King

Studies have proven the importance of a manager being consistent.  Consistency in personal style, interpersonal skills, consistent expectations and consistent accountability.  When an employee is not sure what to expect it adds significantly to their stress levels and will compound throughout your staff.  This increased stress will manifest multiple ways through attendance, turnover, production, and loyalties.  When employee’s know what to expect, even if it is less than a “best practice” behavior, they can better deal with it and will be more productive overall.

A vast majority of the “People” related problems I help businesses with can be linked to Management inconsistencies.  This WILL greatly effect your ability to generate revenue.

 

How do you know if you’re a great boss?
What is your turnover?       Do employee’s recommend their friends to work their?      Whats the mood of the workplace?       What’s the profit line say?  High Employee engagement?       Do you have a formal Feedback system? Are employee’s asking your advice?       Do you insure that you and your team of Managers provide a consistent work climate?
Challenges –

It can be difficult to champion these traits in an angry, competitive environment, which may be inherited when you take your new role.  This may result from either the person who previously held your position, or your boss not having the same values as what I have listed here. Either way it may be the existing culture. Once you determine the root cause, this needs to be addressed.  If it is the prior manager’s creation, stay the course, follow what I outline here and employees will come around.

If you suspect it is your supervisor, or the company culture in general, then you need to share how this plan of yours will make your supervisor(s), your staff, and you more successful.  Share it with supervisors and subordinates alike.  Be strategic, but not shy, don’t forget that this may be why you were put in this role in the first place.  Also, you don’t need to be the highest ranking manager to initiate a change in culture.  To achieve this it is an investment or your time and efforts, not their capital.  If it increases productivity, decreases attrition, and has a positive effect on financials, how can supervisors argue?  If it makes your employee’s know your a GREAT BOSS, why would they argue?

It is worth it!

Being a great boss means getting the work done through others, consistently and fairly.  Creating an appropriate culture where the individuals can contribute to the company while growing at their own pace, meanwhile meeting(or exceeding) company expectations, makes you a Great Boss!  This means delivering excellence to your staff and inspiring the same from them.  Remember that “Excellence is an attitude”, it’s a choice, and a destination.  Being a great Boss is about excellence and a conscious effort to deliver it.  Great Bosses continually work at being Great Bosses.  Great Bosses create a legacy, a reputation that is attached to them for years to come.

Carpe diem!

179 tips to help Cash Flow

Conversations with a Consultant, Operations, ,

Here is a tip that may help your personal and Business Cash flow.  In 2015 there was an Act passed in Congress called PATH. This $622 Billion dollar tax cut has nearly 100 different provisions to help a wide variety of tax payers.

  • the Protecting Americans from Tax Hikes Act

The essence of this act was to help keep more cash in the pockets(or Bank accounts) of Small & Medium sized Business Entities(SME’s) and the average citizen.  An SME’s  is a business of less than 500 employee’s.  What you may want to speak to your Tax professional  specifically about what is called,

Tax code 179

Tax code 179 is about buying or leasing equipment for your business that may be deducted rather than depreciated.  Depending on the expense, it may let you only deduct a % of the expense, but it will still help you keep the cash in your business. This is different from prior years and I have an example below of how to capitalize on this.

There is a list of approved items this code helps and of course there is an additional tax form that needs to filed.  But it may be worth looking into depending what your expenses were in 2015.  Using a one time deduction rather than depreciating these expenses may bring money back that you can use in your cash flow.

Here is a quick look at some of the items this code includes;
–Computers and Software
-Office Equipment and Fixtures
-Large Business Equipment and Machines
-Business Vehicles
-Single-Purpose Structures
-Manufacturing Tools
Informational links-

http://www.section179.org/simplifying_section_179.html

A really nice overview pdf created Wolters Kluwer – https://www.bdo.com/getattachment/2ccf64fd-5806-452d-a27b-d976cf8f146a/attachment.aspx

Click here for more information about Cash Flow from C.S.Simons Consulting
Form 4562 is needed for the deduction-

http://www.section179.org/Form_4562_for_2015_Section_179.pdf

 

A quick illustration, thanks to Crest Capital of how this may help you;

...

 

Carpe diem!