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In the presentation, we wanted to keep the topic to being about how to read your financial statements, at a high level, vs the details about how to create one or how they tie out. In my opinion, that can be left to your bookkeeper to make sure that they are giving you accurate information.
If you are using a cloud based system like Xero, the great thing about it is that I can give the various FS buckets a “smell test” by clicking on the line items to pull up more detail. What is the “smell test”? When the bookkeeper gives me the reports, I look at the numbers at a high level and look for any outliers or things that don't seem to make sense. Bookkeepers are not infallible and may have misunderstood what a particular book entry was supposed to be. Don't fault them, this is normal and it happens…just be aware that you have to do the smell test to any reports that you are given, question the numbers, then make the appropriate updates if needed.
As interpreting financial statements can he hard to explain in a short video segment, I want to share with you some other helpful links with break this down to a much simpler instruction if needed –
How to Read an Income Statement
Breaking Down the Balance Sheet for a Business
Reading Financial Statements Cheat SheetFebruary 23, 2015 at 5:17 pm in reply to: Incorporation – Setting up your business legal structure for optimized operation #5347
Question: Should I incorporate LLC before I do taxes this year? Would this benefit me?
>>> The formation of a LLC would be mutually exclusive of any transactions that occurred before its existence.
Yes, I know I want an LLC — the biggest thing holding me back was the name of my business — Camy Kennedy Consulting or “Fit.Faith”
>>> Even if you chose one name for your LLC, you can always file a DBA with the state (“Doing business as”). So for example, my LLC is Natalie Minh Management LLC and I filed a dba for Natalie Minh Interactive. This allows me to accept checks under both names. I filed my DBA via LegalZoom, super easy 🙂
>>> In the FMI Guild Membership site (click the Members tab above), you can watch the Business Insurance lecture which goes into great detail all of the types of insurance that fitness entrepreneurs/trainers should be aware of.
Question: Gary/Natalie — do you think it would benefit me to get further education in business? My undergrad degree is in Biology — and I really have no business acumen. Thoughts? Online MBA? Online business school?
>>> I have a philosophy about education that my refugee parents who lost everything in the Vietnam War told me when I was young, “You can lose everything in life, you can have everything taken away from you, but you will NEVER lose your education.” Funny thing is that even as an entrepreneur, having a formal business education has benefited me with not only the skill set to do business, but also the authority/trust in the market so that I have regular, high end opportunities open up to me because people see the degrees and don't need to hesitate about doing business with me.
Is it necessary to be successful in business? No. But if you want to do deep dives into all areas that an MBA would provide, do it. Especially before marriage/kids enter the picture and your life no longer has the time to consider that option. Just my two cents!February 16, 2015 at 12:11 pm in reply to: Incorporation – Setting up your business legal structure for optimized operation #5286
@Kate @Jamie The sole proprietorship is the easiest thing to do as it requires no real paperwork other than tracking your expenses and revenue. At the most basic level it's like opening up a lemonade stand and reporting your business at the end of the year. Now, the thing to think about as a sole proprietorship is that down the road if you want to get a bank loan, business credit card, or protect your personal assets from lawsuits/creditors you have to setup some form of corporation in order to do this. In order to build business credit, you also will want to setup some corp structure to get the business credit card so that you can build credit.February 16, 2015 at 12:06 pm in reply to: Incorporation – Setting up your business legal structure for optimized operation #5285
I have a question… say we have a web based training business with e-book sales, personalized programs or a monthly membership. Then, we also have the Isagenix side of things. Say I register my business as Kate Stewart Fitness, would I include the income from Isagenix in that as well? Do we group it all into the same business?
>>> I would for simplicity and consider Isagenix income as a “product” under the Kate Stewart Fitness company. You can always change it later should you need to.February 16, 2015 at 12:02 pm in reply to: Incorporation – Setting up your business legal structure for optimized operation #5283
Amazon Affiliate Sales: Visit http://www.drsarasolomon.com/product-category/home-gym-equipment/ and click to buy any of Sara's products. It will redirect you to Amazon via her affiliate link, for purchase. This is a fancy way of presenting Amazon affiliate links. It could as easily be done if you were writing a blog and you made hyperlinks on photos/words with your Amazon Affiliate link.
Prior to starting my job at the gym, any money I spent on business related expenses, can or cannot be considered tax deductible? ( Because I didn’t earn an income, and it wasn’t for the length of time Natalie mentioned, correct?
>>> Keep track of all of your business expenses (and incomes), you can carry a loss forward or backward per tax law, for up to 7 years.
Pertaining to the expenses (voluntarily) that incurred as an employee under a corporation (I’d assume the gym was a corp.) I’m pretty much at a loss over that too or no? Sorry if this sounds confusing, don’t know the proper language?
>>> There are some provisions under tax law to expense your out of pocket costs like this even if it was for a corporation, they would be considered “unreimbursed costs”. Keep note of it and either present to your accountant or input into TurboTax.
Definitely not too late. Very easy to change domain names without losing traffic. What I would do is
1) get a new logo designed with the new name
2) change some of your about text to match the new name
3) buy a new domain name and then do two things: set the new domain as the main URL to your website and then set the old URL as a redirect to new domain.
Without knowing the details of the project discussed, I always ignore the emotional aspect of the decision making and focus on the math. Are there other projects that have a higher ROI? When judging a project, I look at the ROI in the “good times”, ROI in the “bad times” , and ROI during “average times”. Then do the same math on all of your other options. I ran this analysis on a few large projects for Fortune 500s and we realised that we held onto a poor performing project because we felt that we invested so much into it already. Reality was that the poor performing project only had a 5% ROI in good times and was completely underwater in bad times. Wasn't worth the long run effort. We also compare ROI to the cost of funds = what would the bank pay you if they held your cash in a CD? That would be like 2-3% in today's markets. So in other words, if your project cannot out perform a CD, get out of there.