This is an article about our CEO, Matt Garrett’s presentation to Vistage. You can view the original article on the Vistage Website.
As the COVID-19 pandemic continues to worsen, finance experts say the global economy is spiraling towards a recession at best. Some also warn that a depression may be right around the corner with unemployment levels we have not seen for 90 years.
“This is 100% unprecedented,” says Matt Garrett, CEO of TGG Accounting, who has spoken to more than 600 Vistage groups about finance best practices for small and midsize firms. “We’re going to lose years and years of productivity. It’s going to present a massive unemployment problem…and a massive problem for the business community at large.”
Having led businesses through the 2008 recession, Garrett offers candid advice for CEOs trying to prepare their firms for today’s tumultuous environment. “Run your business by the numbers,” he says. “Get the numbers right and then make decisions based on those numbers.”
From a tactical point of view, Garrett says, this means taking seven steps.
Plan B – Preparing for the unexpected
Contingency planning for the 1 in 100 situations that can arise may seem like catastrophic thinking, a waste of time, or farfetched, until a widespread virus disrupts supply chains the world over. Having a Plan B can be the difference between dying intestate and losing all you and a partner had worked for and having the time and space to deal with unexpected crises knowing the business is taken care of.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.
Guide: Is Outsourcing Right for Your Nonprofit?
Nonprofit executives must wear many hats. Not only are they responsible for fundraising to advance their organizational mission, but they may also be responsible for strategic planning, board communications, human resources, and recruiting, among other things.
More so than ever before, nonprofit leaders are under pressure to fundraise, manage operations, comply with state and federal regulatory requirements, and leverage resources cost-effectively.
The challenge of hiring and retaining talent is intensifying as the US workforce shrinks and wages increase. Most nonprofits do not have the resources to achieve all of this this in-house.
Selling Your Business? What You Need to Know Before You Start
Selling your business can be a cumbersome task. Where do you even start?
Most business owners are experienced at running a business, often very successfully. However, selling a business is usually not something most business owners have a great deal of experience with, especially if this is their first sale.
Most business owners know about valuation and exit scenarios and have heard stories from others about their experiences selling their business – both positive and negative. But there are so many terms, details, possible scenarios, and implications involved in any merger and acquisition (M&A) transaction that it’s next to impossible for most business owners to be experts in this area.
Rather than getting caught up in all sorts of lingo and potential details, it’s best to understand that any sort of M&A transaction is a nebulous process – the value of the deal is as acceptable as whatever both parties involved agree it is. Instead focus on a couple of key areas that you, as the business owner, can control.
Small Business Taxes and the Trap you Need to Avoid
There’s a small business tax trap that many owners fall prey to. The IRS requires you to make quarterly estimated payments of your tax liability. Most of us small business owners either underpay the tax rate or not even pay at all. The worst part is that, unfortunately, a lot of CPAs aren’t paying attention to this either.
So how do we plan for taxes appropriately? We need to make sure we’re not falling into this tax trap, where we get stuck and end up paying a huge chunk of our revenue at the end of the year to pay for taxes we didn’t expect.
Remember, the number one cause of business failure in this country is a lack of cash. To combat this small business tax trap what you’ve got to do is make sure you have enough cash on hand to pay your taxes. After all, they’re your number one creditor every single year.
Why Accounting Matters for Your Business
This is an article about our CEO, Matt Garrett’s presentation to Vistage. You can view the original article on the Vistage Website.
As the COVID-19 pandemic continues to worsen, finance experts say the global economy is spiraling towards a recession at best. Some also warn that a depression may be right around the corner with unemployment levels we have not seen for 90 years.
“This is 100% unprecedented,” says Matt Garrett, CEO of TGG Accounting, who has spoken to more than 600 Vistage groups about finance best practices for small and midsize firms. “We’re going to lose years and years of productivity. It’s going to present a massive unemployment problem…and a massive problem for the business community at large.”
Having led businesses through the 2008 recession, Garrett offers candid advice for CEOs trying to prepare their firms for today’s tumultuous environment. “Run your business by the numbers,” he says. “Get the numbers right and then make decisions based on those numbers.”
From a tactical point of view, Garrett says, this means taking seven steps.
Data-driven Fundraising Ideas for Nonprofit Organizations
TGG recently hosted a roundtable on nonprofit fundraising. We invited our clients and other nonprofits in the community to discuss strategies for increasing donations, expanding their donor base, and appealing to millennial donors.
The forum was moderated by Steve Goldstein, a Consulting CFO with TGG. Steve not only serves some of our not-for-profit clientele, but also founded and runs his own non-profit, Starfish Asset Fund, which provides low interest loans and financial education for transitioning foster youth.
We’ve compiled some of the takeaways from the roundtable because we believe these insights apply to a broad range of not-for-profit organizations.
The agenda covered many aspects of marketing, with an emphasis on using technology and data to improve results.
There were many great discussions and actionable items that can be applied by any nonprofit organization intent on realizing their mission. We have summarized a number of the top takeaways:
Cash vs Accrual Accounting
Cash accounting and accrual accounting are two concepts that are foreign to most people, but it’s important to understand the difference. As a business owner, if you manage your books on a cash basis, you will ultimately fool yourself. Why is this?
The Easiest Sale: Upselling Tips
What’s the easiest sale that you can make as a business? The easiest sale you can make is to a happy customer, and you can sell them something else. Here are a couple upselling tips:
First, you can sell your customers a new product or service. This is actually the hardest of these three different upsells to make, because you have to create or stock a new product, or provide a new service.
Next, you can sell your customers more of what you’re already selling them. It’s the same product or service, but more of it. This expands the relationship.
Third, you can do something that is often the easiest to do, but people are the most fearful to try. You can increase your prices.
How Increasing Utilization Affects Profitability
We’re going to talk about increasing gross margin. One of the best ways that you as a business owner can go about figuring out how to improve profitability without increasing sales. One of the best ways to improve gross margin is by increasing throughput or increasing utilization.
It’s easiest to talk about in terms of the manufacturing sector. Products get created in a manufacturing building. They go in on one side, and come out as finished goods. If products are being manufactured at a 100% efficiency rating, that means that we’re going as fast as we possibly can. But nearly no one is going as fast as they possibly can. If a realistic efficiency rating is more like 80%, what would happen if we increased it by just 10%? What if we could go from 80% to 90% efficiency?
How Discounting Affects Profitability
When we’re thinking about cash, we have to think about the discounts that we might be offering, and how discounting affects profitability. Clearly, we want to try to take discounts if we get them. But what about discounts that we’re offering, sales or incentive discounts for people to either buy more, do different things with our products, or buy them at certain times? What about sales discounts? What is that doing to the cash and profitability of our business?
5 Sales Planning Steps to Profitability
True sales planning is one of the most important things that a business can do each year. It forces business leaders to think through – in significant detail – what is necessary to accomplish their business goals.
Sales planning is more than a tactical plan set from on high: “Your quota is $1MM, now go sell!”
Instead, it’s about planning to sell profitably.
Selling profitably is something that is not as straightforward as it seems. We see examples all the time, in companies big and small, that believe they are selling profitably and selling well–but simply are not.
There are examples of strategic decisions to sell certain products or services at lower margins or even at a loss. These may include gaining traction in a new market, gaining a marquee client in a new industry, or an initial sale with high likelihood of highly profitable add-on services.
But these examples should be few and far between and only done based on a specific plan, not because you didn’t realize it was an unprofitable sale.
Importance of Sales Forecasting
The single most important element in the forecasting process is the Sales Forecast. Generally, Sales drives everything else; it is what determines the expense spending plan. If the company is a manufacturing company, the sales forecast will drive the production plan.
There are several different ways to approach Sales Forecasting. Typically it starts with the Sales Department figuring out how much product they can sell in the following year. Sales people are naturally optimistic by nature, usually overestimating achievable sales. There are several factors that can impact the forecast:
Sales and Accounting – They make a great team.
Sales and Marketing is a far more regular team than sales and accounting. CEO Matt Garrett outlines the many ways that sales and accounting are actually on the same team.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.