Accounting News and Notes

Looking ahead I would anticipate that the recent downturn in the housing/real estate market to continue on into 2008. Real estate has always been a lagging economic indicator and continues to be so for many years to come. Being well armed with information during this time is now more important than ever as you strive to make wise and judicial use of your housing dollar. For most all of us buying a home is the single largest financial decision we will ever make and the constant growing price of home ownership has no end in sight. Location still is the driving force in most of our buying decisions while striving to strike a balance between quality of life issues, proximity, and the strength of the local school system. To find the highest median home prices by zip code please visithttp://www.ajc.com/homefinder/content/homefinder/homesales/2007/06/22/prices.html

If however you are initially more concerned with the sales prices on your street or subdivision and as to what you present home might be worth you can locate recent sales information at

http://homesales.ajchomefinder.com/homesales/homesales_quicksearch/  On the AJC web-site you can also search for varying housing information regarding pricing by county, those areas with the most growth, and prices of starter homes by area.

Today’s housing market mandates that you be a wise and judicial steward of your family’s housing dollar and being aware of all the information available will greatly assist you in the buying and selling process. The listing price continues to be a key determinant in how long a house might be listed. Credit challenges as well are helping to contribute to a slow market and knowing your credit scores and financing options will be a key component to limiting both your exposure and cash outlay.

As the Presidential race heats up, real issues are beginning to come to the forefront rather than political rhetoric alone. The candidates continue to jostle for position in a game of one up man-ship which will continue throughout the primaries, each convention, and indeed up until election day. News was made recently when both Oprah Winfey and Chuck Norris endorsed Barack Obama leaving the press reporters on all sides scrambling. While all of our citizenry are entitled to endorse publicly or privately their respective choices, no one should be able to influence the way you chose to cast your vote as it is yours alone. To that end I suggest that all spend quality time reviewing as many facts as possible about the race, the candidates, and their viewpoints. A good place to start this search would be  http://news.yahoo.com/fc/US/2008_Presidential_Election where you can look deeper behind the scenes and where candidates stand on real issues.

At present the race for the Democratic nomination has Hillary Clinton with a commanding lead of 43% over Barack Obama with 23% but still no majority, with John Edwards bringing up the rear with 13%. You and read more about the Democrats overall political platform at

http://www.democrats.org/

On the Republican side, Rudy Giuliani leads the pack with 25% while essentially Mike Huckabee, John McCain, and Fred Thompson in a dead heat with approximately 14% each.

Unlike past elections where the incumbent might be utilized as an asset, President Bush’s approval rating as resulted in the candidates keeping their distance choosing predominantly strike out on their own. If you visit http://www.gop.com/ you will be able to discover the Republicans premises of their platform.

This prognosticator believes the initial state caucuses will cause a uncertain environment in the polls which will rival that of the late 1960’s. Though time will tell, this race potentially offers many surprises yet to come.

And always remember, the vote you cast today will be the taxes you pay tomorrow.

To find out what the SBA (Small Business Administration) is doing in your area of town, you can get a full listing of closed loans be month at http://www.ajc.com/business/content/business/smallbusiness/index.html This list is sorted by county, loan date, amount, bank/lender, name of borrower, address, and its NAICS/tax code for easy reference. Here you will be able to get at a glance a complete listing of SBA loans and activity in your area and throughout the state.

For business’s who do not fit a traditional banking relationship or that of an SBA lender you can see a list of Atlanta Venture Capitalist (VC) . The listing can be viewed at http://www.ajc.com/business/content/business/extra/vc.html and includes the name of each VC, the year their business was established, their address, lending focus, total capital, preferred lending range, and list of sample funds/incubated companies. Although a VC will typically request a large amount of equity ownership many business opportunities are well suited to this type of lending.

For business’s who are not yet quite ready to go to market there business Incubators who will work alongside and with business owners to help develop their ideas and to mature their business plan. For a listing of Atlanta Incubators please visit http://www.ajc.com/business/content/business/extra/incubators.html Including in this listing you will find the Incubators full name, address, phone, officers/partners, their industry focus, samples of prior clients, their size in terms of square footage, and the average length of past incubations (i.e., the time a business is served by the Incubator).

If you are looking to invest in Georgia, consider looking into the Top 100 Georgia-based companies (based upon annual revenue). This is recap listing of Georgia public companies and recaps by company name, their “Ticker ID”, their current price, current dollar and percent change, the year to date change in stock value in terms of percentage, both their 52 week high and low price, as well as their P/E Ratio (which is the ratio of price to earnings). To visit this detailed list of Georgia’s Top 100 visit  http://www.ajc.com/business/content/business/extra/100stocks.html Here you will find the a recap of companies from which you might begin to explore what stocks you might want to consider investment. I suggest that before you consider any financial investment of any type that you review a detailed prospectus as well as to retain the service of a Certified Financial Adviser to help you carefully evaluate each new investment in light of your overall financial objectives, the business and economic climate, its industry. Before investment of any considerable amount of monies you would also want to read up on the company by evaluating current news about the business, its latest audited financial report, and its overall track record over the last ten years of profitability and payment of dividends. After you have done all of your homework and have made a prudent evaluation; Happy Investing.

As of November 20, 2007 there are 641,385 of active domestic entities in Georgia and 57,839 which are foreign (incorporated in other states). Of those, 302,688 of the domestic corporations are for profit, 65,153 are non-profits, and 245,915 are Limited Liability Companies. LLC’s continue to be very popular since their becoming possible in Georgia approximately fifteen years ago and continue to be used more than ever before. Due to their ease of formation, the lack of a need for a formal Board of Directors, and that there is no requirement for owner/active members to take a salary, the administrative burden of operating an LLC makes it an attractive choice when considering corporate structure. However, an S Corporation has the added advantage of not requiring FICA/Medicaid taxes to be paid on shareholder distributions as long as a fair and reasonable salary is paid. As your results and how you plan to utilize your corporate entity can vary substantially from that of others, be sure to consult with your CPA for all of the possible tax/operational consequences which you will be facing as your proceed with your business.

Working with any large bank or small bank, as well as the Small Business Administration (SBA) will require pulling together financial information.  A well-prepared business plan will carefully document the amount of the loan you are seeking and the anticipated repayment period you are hoping to find.  Obviously, the marketplace and the overall business climate in which you are operating will greatly impact your final loan amount and provisions.  Working with a good CPA is the best place to start so that they might best help you approach banks that are looking for your type of business.  Commercial lenders, like all of us, want to feel that you are approaching them because of a true desire to do business.  If a bank learns however, that you are “shopping a loan” many banks will often pass on the opportunity as they are looking for long-term relationships rather than that solely of a transactional lender.  For example, each time you fully approach a bank, they will pull a “credit score” on both the business and the primary owners/guarantors, which creates a permanent record for all subsequent reviewers to see.  Thus, it is best to approach only a select group of lenders whose lending model fits that of your business. Writing a business plan is an art that is based on scientific fact.  A business owner will want to write his plan so that it tells a story and is an easy to read and follow description of the business.  The business plan has to have all of the relevant market and financial information of the business including financial projections as well as analysis of relevant present and future demographics.  Although banks almost always require adequate capital as collateral for anything larger than a small signature loan, the last thing the bank wants is for you to fail.  Thus, in a sense, you and your bank become financial business partners and they want to know and believe that your loan will be repaid as agreed.  No bank desires for a loan to fail in being repaid as they are in the business of making loans and not on foreclosing on property. 

If you have taken the first step to considering becoming a business owner, you will want to be well armed and informed of the many issues you will now need to address. For just as a soldier trains for war to avoid being a fatality in battle by surrounding themselves with the needed leadership and tools with which to wage battle, so will you as a business owner want to arm yourself with advisers and information to rise to the top. As a soldier will ready himself before launching himself in the fray, you will want to exercise due diligence in obtaining the financial goals and administrative responsibilities your new mantel will now require.

To determine your new venture choice the initial decision will center around the market in which you are desiring to place your business. Many have failed on this issue alone and their business was doomed from the offset because they did not carefully examine the environment or location sufficiently. When a soldier readies himself for the actual battle ahead his first charge and responsibility is to obtain a lay of the land understanding its topography, population, obstacles, and infrastructure. He then scrutinizes this information in great detail striving to maximize its strength and minimize the negative influences on his plan. Often after such examination he will decide not to fight at all, to move the fight to another day when the circumstances are right, or to move the battle to a location whose environment is more suitable to his liking. It is often during this planning process alone that the battle is fought and won as he is able to overcome the deficiencies in his plan and allow him to overcome those who would dare to defeat him. A new business owner should take no less of a detailed posture in evaluating his business model and carefully craft their business before it starts enabling him to ensure a greater chance of survival.

After you have carefully evaluated your business model you will want to spend great time and care in developing a business plan. This will be the way that you wage economic warfare in determining the how and care of your business. Your business plan will be a source which you can review and update periodically to ensure that you are on track and that your plans are valid. Just as a soldier makes changes during a battle as it progresses so should a business owner adjust his plan and actions to meet the ever demanding needs of both their clients and technology. A well crafted business plan will include the below components:

Introduction which will detail the business, its legal structure, and the talents and experience the owner brings to the fray.

Marketing the business detailing its proposed location, traffic flow if relevant, demographics, who your proposed clients are, as well as your competition.

Financial needs of the business detailing a monthly operating budget for the first year with at least two additional years forecast by quarter. The plan should include the projected profits, cash flow, fixed asset purchases required, capital and its sources, and a contingency fund for unexpected occurrences which are bound to always occur.

Operations section of your business plan will include how the business is to be carried out and managed. Care in this section should be taken to carefully determine the amount of personnel which will be needed as well as any infrastructure and facilities which will be required.

After you have set about your basic business model there are many more components in which you will want to consider such as which legal entity you will want to use for your corporate structure, licenses/permits/local codes & ordinances, payroll/sales taxes, and the protection of your business’s intellectual property. Going into business for yourself, though not for the faint hearted, has substantial quality of life issues for those who are willing to go the distance. Surrounding yourself with professionals who have a track record of success will be the first most important step in beginning your journey into business ownership.

Small Business is the Backbone of the U.S. Economy. Without the presence of small business in our economy it would most certainly fail. Imagine shopping centers along our highways without the presence of small business’s. Absent the major retailers, all of the office space you pass every day would be largely empty. According to the Small Business Administration latest data approximately ninety-eight percent of all small business’s are small. Although these business’s do not make up the equivalent percent of jobs imagine what the American landscape would be like if were not for these entrepreneurs who are pursuing the American dream of owing their own business. To help measure this impact approximately thirty-two thousand net jobs were added in Georgia by firms with fewer with twenty employees. Although owning your own business is not for the faint hearted or the ill prepared, owning ones own business offers financial as well as quality of life issues not afforded to those who work in corporate America. An excellent resource tool in beginning your new venture is www.sba.gov/ga or feel free to contact the SBA’s District Office directly at 404-331-0100.

No, we are not perfect but we strive to bring the Good News of Christ to our business and to our clients each and every day. We “Serve Him…by Serving You”. Looking to advise our clients on each and every issue taking on the task of walking in our clients shoes being willing to look out for the best interests of our clients and not that of our own.

In many of our free initial client meetings we often share strategic and never before heard of advice that they take back to their present advisers and utilize. Though this might often upset others we feel our responsibility is to impart wisdom and advice to our clients without having to hold them ransom or under contract. We feel that our relationships should be open and not one sided allowing our clients the freedom each and every day to chose what they should do. No, we do not bend on our principles as they are handed down to us from on High, but we do not hold our clients hostage making them bound to continue to use our services. We constantly advise clients on changes in tax law keeping them abreast of changes which they utilize in their business and financial planning. Our long term goal is your financial security and we work hard to accomplish this each and every day.

The Truth about Taxes (by Anonymous)

The nine men surrounded the tenth and beat him up.  The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short! And that, boys and girls, journalists and college instructors, is how the tax system works.  The people who pay the highest taxes get the most benefit from a tax reduction.  Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

Our tax system heavily depends on the upper class paying a predominant portion of our national operating budget.