Many Startups Fail Because They Invest in the Wrong Things at the Wrong Time. Understanding IRR (Internal Rate of Return) Can Help You Make Smarter Financial Decisions, Prioritize High-Return Investments, and Avoid Cash Flow Disasters. Before You Spend Another Dollar, Learn How IRR Can Determine Whether Your Investment Will Pay Off—or Drain Your Resources.
Are You Wasting Money? How IRR Can Save Your Startup Read More »
Not All Assets Are Created Equal. Some Drive Revenue and Business Growth, While Others Just Sit There Looking Impressive. Learn How to Invest in the Right Assets to Ensure Long-Term Success and Avoid Costly Mistakes.
Not All Assets Are Equal: Focus on Those that Grow Your Business Read More »
Your Balance Sheet Doesn’t Tell the Full Story of Your Business’s Value. Hidden Off-Balance Sheet (OBS) Assets—Like Brand Reputation and Customer Contracts—Can Significantly Impact Your Financial Health and Business Valuation. Learn How to Identify and Leverage These Critical Assets to Secure Financing, Attract Investors, and Maximize Your Company’s Worth.
The Off-Balance Sheet Secrets That Can Make or Break a Business Read More »
Not All Customers Are Equal; Some Drive Profits, While Others Quietly Drain Resources. Customer Profitability Analysis (CPA) Helps You Identify Which Customers to Nurture, Improve, or Let Go.
How to Master Customer Profitability Analysis Read More »
Discover How Precise Cost Allocation Can Transform Your Business Profitability: Learn the Secrets Behind Activity-Based Costing, Uncover the True Cost of Projects Like Never Before, and See How Transparency Creates Client Trust and Better Margins.
How to Unlock the Power of Activity-Based Costing Read More »
Discover How Strategic Reorganization Under Chapter 11 Bankruptcy Can Provide a Critical Lifeline for Businesses Facing Financial Upheaval. Learn the Intricacies of Creditor Negotiations and the Potential for Recovery in This Detailed Exploration.
From Chapter 11 Bankruptcy to Rebirth: Lessons in Business Survival Read More »
Discover How Corporate Bonds Can Provide Cash Flow During Revenue Delays, and Explore How Royalties Can Tie Investor Returns to Your Sales Without Control.
Advice About Bonds and Royalties to Fund Business Growth Read More »
Leasing or Renting Business Equipment Offers Startups Significant Advantages Over Purchasing. It Minimizes Upfront Costs, Reduces Financial Risks, and Enhances Cash Flow Management, Essential for Early-Stage Businesses.
6 Reasons Start-Ups Should Rent/Lease Business Equipment and Not Buy Read More »
Explore the Intricate Framework of LLC Ownership Through the Lens of Capital Accounts. Uncover Their Pivotal Role in Tracking Member Contributions, Shaping Profit Allocations, and Maintaining Equitable Distribution to Ensure Fairness and Transparency Among Members.
How to Master Financial Fairness Using Capital Accounts in LLCs Read More »
Unveiling The Harsh Reality of Business Funding: Delve into The Elusive World of Business Grants. Unveil The Truth Behind the Myth Of ‘Free Money’ For Startups And the High Costs of Chasing This Illusory Dream.
Debunking the Myth of Free Business Grants Read More »
Explore The Often-Overlooked Operational Costs Involved in Developing Accurate Cash Flow Projections, and Gain a Thorough and Insightful Understanding of the Ongoing Expenses Components Necessary to Sustain a Successful Small Business.
How To Plan for Unseen Small Business Operating Costs Read More »
Delve Deeply into The Underappreciated Realm of Hidden Startup Business Expenses That Entrepreneurs Frequently Underestimate, And Gain a Thorough and Insightful Understanding of The Components That Are Truly Essential in Embarking on The Journey to Establish a Successful Small Business.
How To Plan for Unseen Small Business Startup Costs Read More »
Discover How a Deferred Royalty-Based Compensation Strategy Can Help Entrepreneurs Secure the Resources Needed for A Successful Venture Launch. Explore The Potential Benefits and Considerations of This Innovative Approach to Funding Your Business.
How To Establish Deferred Royalty-Based Compensation for Undercapitalized Businesses Read More »
This quiz was designed to test your knowledge of funding options. Are you ready to put your knowledge of funding options to the test?
Traditional Term Loans for Small Businesses Involve Fixed Monthly Payments of Principal and Interest in Exchange for Upfront Cash and Rewards a Company to Pay Off the Debt Early. A Merchant Cash Advance (MCA) Provides A Cash Advance in Exchange for Variable Payments Based on A Percentage of Every Credit Card Purchase Received by The Business and A Fixed Predetermined Payback Amount.
What You Need to Know About a Merchant Cash Advance (MCA) Read More »
Many Aspiring Entrepreneurs Naively Think the System Is Unfair and Rigged Against Them. It Is Not. They Just Don’t Get It and Probably Never Will Which Is Why They Should Never Try to Start a Business Because They Do Not Have What It Takes.
This Is Why Many People Should Never Be Entrepreneurs Read More »
Why Do Most Businesses Rent Their Facility? Because The Same Arguments for Owning a Home Do Not Apply to Owning a Business Property.
Why Paying Rent Is Often Better Than Owning Business Property Read More »
Most Small Businesses Fail to Understand Their Burn Rate, Which Is the Rate at Which a New Business Spends Its Startup Cash to Keep the Business Alive Long Enough to Get to The Breakeven Point.
Burn Rate – The Hidden Costs of Starting a Business Read More »
Many People Believe That Profit Is The Only Thing That Matters, And Those Business Owners Are Driven By Greed. Not True. Profit Is A Critical Ingredient For An Organization To Stay In Business. Profit Is An Indicator Of How Well The Company Is Performing, A Feedback Mechanism To Correct And Improve Performance, Insurance To Ensure Survival In An Uncertain Future, And The Investment Capital For Future Expansion Of Jobs Or New Machinery.
The Truth About Business Greed And Profits Read More »
Many Business Owners Will Face the Issue of Whether or Not to Make an Additional Business Investment in Their Venture. But Is It the Right Thing to Do or Are They Just Throwing Good Money After Bad?
How To Determine If Your Profits Justify Further Business Investment? Read More »
The “Valley of Death” For Startups Refers to The Negative Cash Flow Period in The Early Stages of a Business Before Their New Product or Service Is Bringing in Revenue from Real Customers. There Are a Number of Options to Bridge This Valley.
10 Tips For New Startups To Survive The Early Years Read More »
There are a lot of reasons why startups have trouble raising money but most of those problems are self-inflicted and can be avoided. Discover the 4 times startups try to raise money too early, and how waiting will increase their odds of getting the funding they actually need.
Raising Money? Increase the Odds of Getting Your Startup Funded Read More »
A break-even analysis is a technique used by business owners to assess how many units and at what price they need to sell them at to make a profit.
VIDEO: Why You Need to Conduct a Breakeven Analysis Read More »
Draws and distributions are simply a mechanism that allows owners to take out excess cash from the business. In pass-through entities, there are no tax consequences for doing either an owner draw, distribution, or a cash infusion in the normal course of business. This concept often creates a level of confusion for founders not versed in a few basic principles of accounting.
The Truth About Why Draws and Distributions Are Non-Taxable Read More »
One of The Most Important Decisions A Founder Will Have to Face Early on In Their Journey Is to Retain Power and Control or Focus on Creating Wealth and Growing the Business Fast in What Is Known as The Founder’s Dilemma.
How To Choose Between Wealth and Power, Understanding the Founder’s Dilemma Read More »
Financial ratios measure the relative health of your business as it compares with other businesses in your industry.
Why You Need To Know How to Benchmark Your Financial Ratios Read More »
Bootstrapping refers to starting a business without any external investment from sources other than the founder and is the best early-stage path for most startups.
You Need to Consider Bootstrapping Your Startup Read More »
Rather than follow the traditional routes of getting a loan or selling business shares to investors, have you considered ways to get customers to fund your startup?
How to Get Customers to Fund a Startup Read More »
Many Entrepreneurs Seek Funding from Friends and Family. Others Avoid It as They Fear the Prospect of Asking for Money.
6 Keys To Managing Funding From People Close To You Read More »
Successful entrepreneurs know that it is not revenue or sales that count, but the gross margin you can produce from your sales. Without a healthy gross margin, your sales will not produce enough gross profit to cover your operating expenses and return a profit to the owners.
You Need to Know How a Drug Dealer Mindset Will Ruin Your Hustle Read More »
Working Capital – What Does It Actually Mean? Why Is It So Critical to Understand What It Means, How to Calculate It, And Why It’s Important to The Success of Your Business?
Working Capital: What Is It and Why Do You Need It? Read More »
The three most common financial statements are the Balance Sheet, Income Statement and Cash Flow Statement. They are produced by a company’s accounting software and look at what happened in the past. While these financial statements are often included in a business plan for an existing business, they are not part of the pre-start business plan.
3 Key Financial Statements- Balance Sheets, Income Statements and Cash Flow Statements Read More »
A company’s cost structures represent the specific costs that the business will incur while operating under a particular business model. Through understanding the key resource, key activities, and its key partners, the business can determine its available cost structures. By choosing to be either Cost Driven or Value Driven and properly using Operating Leverage, the business can find its optimal cost structure.
Cost Structures and Your Business Model Read More »
When it comes to defining your revenue streams, especially when you are developing a business model canvas, there are many factors that you need to consider that affect your potential income source. Will you use a fixed or dynamic pricing mechanism, and is your revenue based on transactional and reoccurring sources of revenue?
Revenue Streams and Your Business Model Read More »
What is operating leverage and why should you care? Ignoring the financial mumbo-jumbo, operating leverage represents how having debt can affect a company’s bottom line profit. In some cases, Operating leverage can improve a company’s profits and in others, it can destroy it.
Operating Leverage for Small Business: When You Should Use Read More »
Many entrepreneurs do not understand the difference between a business and economic model. Simply put a Business Model is primarily customer-focused while an Economic Model is owner-focused.
Why You Need To Know How Your Economic Model Drives Profit Read More »
The successful entrepreneur is one that keeps his eyes and ears open and takes stock of events happening around him. This is important not only to determine the margin price but to consider the impact potential events could have on the margin price in the future and develop contingency plans to deal with them.
To Maximize Profit You Need To Understanding Margin Pricing Read More »
Businesses have to make money and turn a profit to survive. While personal consumption can be influenced by personal ideals and values, in business, it is all about making a profit.
Are Your Personal Values Destroying Your Business? Read More »
When you are just an investor in an S-Corp, ostensibly you do not work for the business and you do not participate in its management as an officer. You are therefore considered limited in your liability and your income from the business based on your ownership share of the business is usually considered passive income.
How to Pay a Shareholder of an S-Corp Read More »
How You Get Paid as An Office and Or Shareholder of an S-Corp Is Different. Here Is What You Need to Know About Getting Paid.
How to Get Paid in an S-Corp Read More »
In some cases, all the partners of a limited partnership may be investors only and not managers. The partnership may hire an outside general manager (employee) to make the day-to-day decisions, and therefore, acts as the manager. In this case, the general manager is an employee of the business, but since they are not a partner (aka owner), their income is just like that of an employee in any business.
How to Pay a Non-Partner General Manager of Limited Partnership Read More »
How You Get Paid as A Non-Partner General Manager or As General Partner of a Limited Partnership Is Different. Here Is What You Need to Know
How to Get Paid in a Limited Partnership Read More »
A partner in a limited partnership that is a decision-maker (general partner) is considered an employee of the business by the IRS and is treated differently than limited partners. Income for general partners is considered earned income and is subject to additional taxes but also to additional potential tax deductions. Moreover, as a general partner, you are exposed to additional liabilities.
How to Get Paid as a General Partner of Limited Partnership Read More »
In some cases, all the members of an LLC may be investors only and not managers. The business may hire an outside general manager (employee) to make the day-to-day decisions, and therefore, acts as the manager. In this case, the general manager is an employee of the business, but since they are not a member (aka owner), their income is just like that of an employee in any business.
How to Pay a Non-Member General Manager of a Multi-Member LLC Read More »
When you have an investor in your LLC, who works less than 500 hours in a given tax year for the LLC, and they do not participate in its management, they are considered limited in their liability and their income is usually considered passive income subjecting the income to only federal and state income taxes based on their marginal tax rate.
How to Pay a Non-Manager Member of a Multi-Member LLC Read More »
A member in an LLC that is a decision-maker (manager) is considered an employee of the business by the IRS and is treated differently than non-manager members. Income for managers is considered earned income and is subject to additional taxes but also to additional potential tax deductions. Moreover, as a manager, you are exposed to additional liabilities.
How to Get Paid in a Multi-Member LLC Read More »
As a sole proprietor or as a single-member LLC you are the only owner, and as a result, you do not take a salary or a wage from a business. Instead, you can simply take out excess cash from the business, which is known as an owner draw, to pay yourself.
How to Get Paid as an Owner of a Sole Proprietor or Single-Member LLC Read More »
How you pay yourself as an owner depends on the type of entity you are and how many owners there are. This post lays the groundwork and defines a few terms that should help demystify how entities pay the owners of the business.
How to Get Paid as an Owner of a Pass-Through Entity Read More »
Would your business benefit from lower downside risk but less profit potential, or higher profit potential with greater risk if break even is not met? In this post, discover how a businesses fixed and variable costs will shape its risk and reward possibilities.
How to Control Business Risk Read More »
The question, “Is it better to lease office space or own it?” is at the core of many business plan decisions that I review. On the one hand, I never advise owning real estate for startups because they have a high rate of failure. However, it is a decision that should not be undertaken lightly
Should You Rent or Own Your Business Real Estate? Read More »
Don’t look to our government as a model in understanding good vs. bad debt. Every day the media highlights another case of the government’s ignorance in the way money should be used. One side of the aisle says it is a revenue problem and we need to raise taxes on the rich. The other side
Is Bad Debt Destroying Your Business? Read More »
The US dollar continues to rise in value in relation to the Euro. A strong dollar makes products manufactured overseas cheaper to buy. While it may make buying a Mercedes cheaper and may make your international travel budget go further, these savings come at the expense of business revenue. On the flipside, goods and services
There is a bit of an injustice in the way entrepreneurs are told about the business planning process. First, new entrepreneurs are told that to get money from a bank they need a business plan. While there is some truth to this, a major missing piece is that they will likely not get any funds
The rule of 72 is a simple tool to calculate how long it takes to double your money. Your money will double in value if the product of multiplying the interest rate by time equals 72. The formula is Interest x Time = 72. So given a 10% annual investment rate it will take 7.2
The Rule of 72 for Doubling Your Investment Read More »
Working More Hours Won’t Make You Rich—But Understanding How to Leverage Free Cash Might. Learn Why Investing, Not Hustling, Is the True Wealth Strategy.
Why Working Harder Won’t Make You Rich (And What Actually Will) Read More »
Often a company will spend months or even years developing a new product. The labor and material used to develop a new product or offering is considered Research and Development (R&D). R&D is often considered an expense to the company. Expenses are deducted from Revenue in the year they are incurred and help to reduce the
Should you Amortize or Expense your R&D? Read More »
Why Every Business Needs Capital to Survive and Thrive. Learn How Debt and Equity Financing Can Make or Break Your Venture.
Why Every Business—Successful or Not—Eventually Needs More Capital Read More »
Operating Leverage is just one part of your Economic Model. Simply put, operating leverage is the relationship between fixed costs and variable costs.
Understanding Operating Leverage Read More »
When Robert Kiyosaki of “Rich Dad Poor Dad” fame said, “It is not how much money you make but how much you get to keep,” he was talking about TAXES. As a business owner, you get to claim business expenses that employees do not. For example, if you use a cell phone to make yourself
Taxes Are The Way to Wealth Read More »
