Small Business Election Effect

Before the election, 81% of small businesses said that the 2020 election would affect their small business — no matter the outcome. According to the report issued by Verizon, small business owners’ concerns ranged from financial viability, social distancing regulations, and the post-COVID business climate. This was a national survey, so it doesn’t necessarily reflect the business climate here in southern Ohio…but as a nation, many of us are interdependent in many ways — whether as suppliers or consumers.

After the election, reality set in that a Biden win coupled with a sympathetic Congress is likely to mean more than COVID concerns. We are looking at the likelihood of the cost of employment rising due to an increased minimum wage from $8.70 per hour ($4.35 for tipped employees) to $15 per hour, plus mandated paid time off (PTO) for employees.

Biden also promised to modify Trump’s Tax Cuts and Jobs Act of 2017, raising the current corporate tax rate of 21% to 28%, and will likely raise the income tax rate for the tax bracket in which most small business owners operate. Plus, we can’t rule out a tax increase on income from capital gains.

Since 2017, CNBC has conducted what they call their “SurveyMonkey Small Business Survey”.  Since the high of 62% in 2017, responses had never dipped below 50 until 2020 (coronavirus). Now that Biden is President, there’s uncertainty among some small business owners, but it’s divided. Republican business owners are more pessimistic than Democratic owners and the earlier confidence from both sides stemming from the assumption that raising taxes on small business would be difficult in a Republican-controlled Senate have been dashed.

At any rate, if there’s one single thing most small business owners have, it is tenacity. Always willing to take risks to achieve their goal, the successful small business owner is so self-motivated and so self-reliant that they can survive anything that comes their way. For those with businesses hit hard by COVID, grants instead of loans would be helpful and for the smaller companies, a Godsend. 

If you have any questions or concerns in these uncertain times, please feel free to call us knowing that our conversations are held in the strictest confidence.

Accountants As Problem Solvers

Small business accounting firms might be described as professional teams that allow business owners to concentrate on their business’s financial success without having to first acquire specific knowledge of accounting terms, processes, and theory. In fact, we’re actually Problem Solvers!

So what can a problem-solving accountant do for your small business?

1. Provide strategic guidance and tools. Your accountant can provide owners more time to focus on the many moving parts of a business. Setting professional, financial, personal, and business goals and staying on track with those goals while running a small business is a challenge. Your accountant will provide advice, be a sounding board, and more importantly build a dashboard of tools to measure progress. If things don’t go as expected, we help you troubleshoot the issues, test solutions, and reset key performance indicators (KPIs).

2. Keep an eagle’s eye on cash flow. Cash flow is the number one problem for most small businesses. Seasonal shifts, politics and big government, taxes, supplier levels, and even pandemics can cause a small business to fail. Even successful ones suffer when payments are slow to come in or expenses are too high. Your accountant’s job is to build long term financial strategies and organize cash reserves and a spending plan to assure that you can always make payroll and cover expenses.

It’s not just about cash flow. Your accountant serves as a sounding board — like what to do with spare cash, pay debt or reinvest? — because they can quickly consider the numbers behind the business and how debt might be structured. 

3. Provide tools to keep you in the loop. Your small business accountant can set up cloud accounting software to automate customer billing, pay invoices, and stay on top of expenses because you can manage your finances from anywhere.

4. Make your life as a business owner less stressful. Budgeting can be a nightmare for busy owners; if ignored, they can lead to poor decisions. Your accountant’s rigorous managing of the budget means you always know the real cost of doing business. And, you’ll know what to pay yourself!

It’s important to hire an accounting service that you can relate to on both a business and a personal level. Should you have an accountant that just seems to go through the motions instead of acting as a partner in your financial success, we hope you will call us. If you are already a loyal partner with us, we’re seriously interested in your feedback — seriously — because it’s our mission to build a thriving and profitable client accounting and advisory service firm. We are committed to incorporating first-in-class processes and procedures and using state-of-the-art technologies to benefit client experiences and, as your partner in success, be there as your ProblemSolver-in-Chief.

What Small Business Must Do In December

We wish it was about letting our employees and ourselves find time for online shopping (yep, it’s a Covid Christmas this year — forget the Mall). It’s not about wearing red and green to the office and bringing in cookies to share. Or if you work from home as so many of us are doing, it’s not about wearing our comfy ugly Christmas sweater or Santa Socks.

What it is about is getting ready for 2021. Sort of a Christmas list, for business.

The List

Prepare the 2021 budget. Include your monthly revenues and expenses, and a projection of how much you need to bring in next year to remain solvent or hit revenue goals. If the numbers don’t add up, it may be time to shop for additional financing.

Double check SBA Coronavirus Relief Options. Be sure you have asked for or received all the help you can get from the SBA.

Take inventory. Calculate your ending inventory to avoid any surprises starting 2021.

Organize files. Lack of organization can hurt your business, and this is the best time of year to clean up your files so any mistakes from 2020 can be rectified now and not carried over into the new year.

Prepare for Tax Season. Start by understanding your tax filing deadline, then gather and analyze your records looking for tax deductions and credits. Set aside estimated tax payments or determine whether you need a filing extension.

Or, simply let DL MoneyMatters do handle most of this list for you (highly recommended)!

Finally, promise to put 2020 behind you emotionally and get energized for 2021. Do something kind for your employees and for yourself. Get together and set outrageous goals for the coming year. Then take some time off to spend with close family and to celebrate what Christmas is really all about—love, mercy, compassion, and the call for us to share our time, our attention, and resources with others, especially those who need it most.

Merry Christmas!