New equipment can be expensive, yet so can downtime and the risk of losing a customer because you can’t deliver speedy service when your equipment is down and needs repair or replacement. Budgeting for future equipment is often cited as a best practice for your business.
Without cash, an automotive repair shop will inevitably shut down, regardless of how profitable it looks on paper. You can be “rich” in accounts receivable and inventory, but cash poor if these assets are not convertible into cash to meet current obligations. In fact, cash is the only asset a company needs to stay in business.
Small business identity theft is a big business for identity thieves. Just like individuals, businesses may have their identities stolen, and their sensitive information used to open credit card accounts or to file fraudulent tax refunds. As such, small business owners should be on guard against a growing wave of identity theft against employers.
The decision to sell your business is one of the most important decisions of your lifetime. Turning your operation into cash is a complex matter involving a number of variables, many of them unique to your business and to the auto service industry. Additionally, you may be facing an uncertain economy, unbridled competition and sophisticated buyers.
The IRS collected $7.3 billion from audits in 2015. Small businesses (sole proprietorships in particular) are more likely to be targeted than bigger companies. But the experience doesn’t have to be painful.
At some point, most small-business owners will visit a bank or other lending institution to borrow money. Understanding what your bank wants, and how to properly approach a loan officer, can mean the difference between getting the money for your shop expansion plans or having to scrape through finding cash from other sources.
A certified public accountant (CPA) can provide a wealth of services to your company, including business advice and technical assistance. And, with the right CPA, you can also save money and become more profitable.
Payroll is the largest expense item in the monthly financials, and dramatically affects the bottom line. It’s so easy for this to get out of hand if it’s not monitored on an ongoing basis.
Jim’s Auto Repair and Tire has been a fixture in a Midwest community for 31 years. Jim is now 64 years old and has agonized about when to retire for the past couple of years. The business has enabled him to live a good life despite the ups and downs of the local economy, put his two children through college and spend more time lately on his hobbies.
There was a time when you could take care of your customers and your people and the rest would take care of itself. It’s a lot more complicated than that today to run a successful business.
“I pay myself $100,000 per year, plus all the cash I can take!” That was the response I got when, as a young shop owner, I asked an older, established owner how much he paid himself. I was curious about how much I should make and how I should pay myself. His answer didn’t help me.
Owners earn compensation in two ways. First, the owner should earn a paycheck just like any other business employee for working in the business. Second, the owner should earn a return on their investment in the business.
