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Benefits of S-Corp vs LLC

The major benefit of an s-corp vs an LLC is the FICA tax advantage. If a s-corp reports $1.0m in annual profit, 50% might flow to direct owners via a salary while the remaining will be paid via profit distribution.

Jan 28, 2022 Read More

What is business strategy?

At its most basic level a company can differentiate its offering or compete on cost. Strategies that blend the two create earnings headwinds. Resources are channeled inefficiently. The productivity of the strategy is maximized when a company is solely a differentiator or a cost leader. This is referred to Michael Porter as competitive positioning.

Jan 28, 2022 Read More

Low rate environment

With the federal funds rate at its lowest level in 60 years, the Federal Reserve is creating an opportunity for those business owners looking for debt to build and grow. If you borrow $1m today at a 10-year 4.5% annuity (with 10% down), you will save $162,684 in interest fees over the life of the loan vs a comparable loan offered at 7.5%.

Jan 28, 2022 Read More

Funding a startup

For small business owners, sourcing unsecured financing is extremely hard. Commercial banks are very hesitant to assume all the risk. The SBA steps in and does play a role here. Here are a few steps to take if searching for capital via the SBA.

Jan 28, 2022 Read More

Looking for growth

There are an infinite number of ways to maximize sales. Besides the obvious drivers, there are thousands of externalities that influence a company’s ability to grow. Most of these are not “controllable”. They’re a fact of doing business. Reference the image for a short list on some potential tactics to drive sales.

Jan 28, 2022 Read More

Calculating the discount rate

Calculating the discount rate for a potential investment in a small business is not easy. While today’s interest rates may be low, the real rate outside investors will require will not be.

Jan 28, 2022 Read More