As a growing business you must learn from your CPA early on about how to interpret your Profit & Loss and Balance Sheets. These indicate the lifeblood of your company. Depending on your business you need to look at these at least monthly, if not weekly or daily! Additionally, as part of your corporations annual shareholder meeting, go ahead an prepare a financial review and prospectus, even if it is only for you. Look at other corporation’s filings – both large and small. This exercise will give you the opportunity to do some looking back, as well as forward looking based on past performance. It also gets a lot of your homework cleared out of the way when you’re ready to look for outside funding. Infact, even before you start looking for F&F financing (friends & family), you really should have something prepared to hand to them as well.
The following is quoted from Michael Gray’s CPA Tax & Business Insight Newsletter for September 2008:
Paul McCauley, who I am embarrassed to say is a CPA, and union leader Brad Rooker are promoting an initiative to impose a one-time 25% “wealth tax” (read success tax) on the assets of Californians exceeding $20 million for single persons and $40 million for married couples. The wealthiest 1 percent of California taxpayers paid 47.9% of the state’s personal income taxes for 2006, but that doesn’t satisfy McCauley and Rooker.
Of course, there is nothing to prevent these individuals from moving out of California to a more friendly state, and bringing their corporate headquarters with them. Say Steve Jobs (Apple Computer, Pixar), John Chambers (Cisco Systems), Larry Ellison (Oracle), George Lucas (Lucasfilm) and Larry Page and Sergy Brin (Google).
In addition, the wealthy don’t keep their assets as cash in a mattress. In order to pay the tax, any of them who decide to stay will have to liquidate their stock, bonds, and real estate. What do you think dumping these assets will do to the market? What do you think it will do to CalPERS, the state’s retirement system and one of its biggest investors?
These are also the people who fund our universities and charities, and bail out the state of California by purchasing municipal bonds to fund deficits.
If the state gets this money, do you really believe it will solve its money woes, or do you agree with me that it will be dissipated in nothing flat?
We should tar and feather McCauley and Rooker and they should be fired as unfit for their occupations.
More importantly, we need to speak out and not passively let their proposal be promoted as a “reasonable alternative.” This is not “just politics.” This relates to freedom, property rights and understanding that the real source of wealth is men’s minds. (See Atlas Shrugged by Ayn Rand.)
For more information, please see http://www.taxtrimmers.com
There is an adage which many company’s continually contend with: at points we will spend time to save money, at others spending money to save time… During various stages, typically during the early growth stage, we spend a lot of time, 60-70-80 hours per week, in order to save every penny possible. Later on, we learn and have the financial resources to spend money to save our valuable time. This goes back and fourth throughout every stage of a company’s existence.
The big lesson hear is to first acknowledge this principle and then decide how to best leverage this for your own business. Sometimes the right knowledge and expertise provided by a professional is worth more than 100 hours of personal research. So, spending money may actually be priceless.