Wayne joined StorMan Software in 2007 and is the Vice President of Sales and Marketing in the USA.
Title: Employ America
Date: 20th March, 2008
Employ America – The Essential Business Survival Kit
Anyone care to be scared out of their birthday suit? If you haven’t recently, and you’d like to be, I hear the movie “Shutter” is going to be a good one for it. You also have a number of other options available to you though. One is to have a conversation with someone about the US Trade Deficit. Another is to have a conversation with someone about the Credit Crunch.
Alternatively, if you want to be scared witless but you work alone and do not have anyone with whom you may discuss such things, although we cannot vouch for the accuracy of anything you find there, you can do a Google Search on “US Trade Deficit” and “Credit Crunch” and gawk with mouth wide agape at whatever you find.
The movie, “Shutter”, is fiction. The Trade Deficit and Credit Crunch are both very real and good reason for concern. We do need to be informed. But I don’t think anybody believes that the cure is to subject ourselves to “paralysis by analysis”, worrying ourselves to death in the process. Each of us can, and must, take prudent action to grow the most profitable businesses possible, despite the various challenges. This has always been, and always will be, what businesses do. And today the ability to do this is just as important as it was yesterday, and it is going to be just as important tomorrow. We are not without resource, so let’s take stock of that which is available to us.
The good news for our industry is that the value we offer our customers cannot be out-sourced from somewhere like India or China. This means that our industry may well hold a very important key for the sustainable employment of Americans in what may yet prove to be very tough times. This is an edge that we can make the most of if we give it some thought. Finance these days is tight. We may well need some money to set ourselves up for the next couple of years. Let’s see if we can do something about that…
Our businesses are asset backed, and have two income producing streams. The first of these is “property”. Let’s discuss a resource to do with your property that you may not be aware of at this moment (thank you CSSA Newsletter!!!)
How You May, Almost Immediately, Get Your Hands On A Substantial Amount of *$CASH*
Enlist the Assistance of Uncle Sam
The Inland Revenue Service (IRS) recognises something called “cost segregation” (cost seg). Cost seg is often referred to as real estate’s “best kept secret”. The tax benefits are substantial for the self storage industry. Essentially, instead of using straight line 39 years for the entire depreciable basis, the IRS now permits the “segmenting” of certain costs (both direct and their share of the indirect and general conditions costs, too) to shorter recovery periods. For instance, now all site work (paving, partitions, site work utilities, millwork, lighting, etc.) can be depreciated over 5, 7, or 15 years.
- The IRS has endorsed cost segregation
- There are no filing or amended returns
- Applicable to any property acquired or built since 1987
Working Example
Subject : Self storage business of 250 units
The Taxpayer initiated (through a specialist in this area) a Cost Segregation Study on 250 Units of a self storage facility located in the West (the Subject). The specialist was to segregate the Subject’s direct and indirect construction costs amongst the appropriate property classes in an effort to maximise the allowable depreciation deduction for federal income tax purposes.
The Subject was being depreciated over a 39 year period. The specialist was able to accelerate the depreciation on 42% of the asset to shorter recovery periods (15, 7, & 5 year property). Some of the segregated costs included asphalt paving, curbs, fencing, concrete sidewalks, storm water drainage, retaining walls, carpeting, millwork and specialty equipment.
By accelerating the recovery period, the specialist was able to increase the after-tax cash flow for the Subject, on a present basis, by over US$98,000.00. This engineering-based assignment included a reconciliation of the Subject’s basis, a site visit, reproduction cost study, written narrative report and all the necessary tax support to complete the Automatic Change of Accounting, in accordance with IRS guidelines, while working closely with the Taxpayer’s accountant.
This assignment was completed in a total of 20 business days and came in better than originally forecasted.
The specialist works on the basis of saving its customer 10 x the fee they charge. Through your CSSA membership you are entitled to a complimentary estimate as to what this specialist can save you. So if you do contact this specialist do not forget to quote your CSSA number.
Referral
Peter Park
Vice President Business Development
Tel 914.694.3800
Web www.ccrtaxaudit.com
Day to Day Business Cash Flow Generation
We are not completely powerless when it comes to generating cash flow in our day to day business (as it exists today) either. The tax break mentioned above should resource you all-the-way and then some in this regard because the suggestion we have in mind is not expensive, although it will require your commitment. The more entrepreneurial we can be the better we will fare. We need to attract new customers, right?
Well, yes… and no. Not all customers are created equal. We want to attract the customers we have decided to do business with because it suits our skill set and property asset. So then, wouldn’t it be best if customers were attracted to us by some cost minimal means machine that we can turn up or down, at will, depending upon the needs of our business and the value proposition we wish to offer the market, with consideration given to our particular property asset? Some means that we can measure, and so operate and coordinate our efforts, with precision, effectiveness, and efficiency? Wouldn’t the optimum levels of flexibility provided by such a machine give our businesses the absolute best chance of prospering – in any business environment?
Surely it would! But you need to take the time to figure out how to drive such a fantastic machine before you can send it hurtling down the revenue highway at breakneck speed. The CSSA would like to sponsor your enrolment into this new world of customer attraction. Here is what you can try:
1) Go to www.psychotactics.com.
2) Subscribe to the FREE marketing newsletter.
3) Type in “CSSA” as the referring party to the site.
4) Sit back and wait for the wisdom to be sent to you by this internationally successful marketing company via email – at no cost to you! (Thank you again CSSA newsletter!)
Referral
Another reference you can review to get some background on Psychotactics is over here, in my other blog post.
Once You Have the Customers, Look After Them
Once you have customers inquiring about your services, you need to look after them. This is simple to explain but difficult to do. It is made easier if you are able to specify who your customer is through your marketing. Essentially, your job is to take a product that you bought for $1.00, sell it to your customer for $2.00, and then look after them so well that they believe they should be paying you $3.00.
Referral
For more ideas on customer service refer to my March 18th blog post, and my March 11th blog post.
Becoming a Lean and More Profitable Operation
And then, once we have generated the business and are meeting the customer’s needs, couldn’t we make the most of it by being lean and mean (in an operational sense), whilst exceeding (at best) or meeting (at worst) the needs and expectations of our very valuable customers?
Referral
Check out my March 6th or March 19th blog posts
In Summary
Let’s do a little re-count here on the good news so far:
1) We have released some cash assets to invest in honing our business for long term profitability.
2) We have figured out the most profitable use for our storage property, and how to get the customers we want to work with.
3) We are looking after our customers so they are paying us in excess of what it is costing us to provide our service and, in the mind of each and every customer, they are receiving extremely good value.
4) We have the business systems in place to maximise our business return.
That, to me, sounds like the best plan for any business, in any market.
StorMan has been a developer of storage management software since 1987. They have offices in Riverside California USA, Brisbane Australia, and Auckland New Zealand. Their programme will run on PC or Mac but is not Microsoft based. This helps to protect their customers’ valuable data from attack by the majority of computer viruses.
They are the leader in a number of storage markets worldwide for technological innovation and efficiency. Their smallest client in the USA has one facility, their largest client to date has over 30 facilities. They are staunch supporters of local Associations in the markets of interest to them.
Wayne R.
Vice President Sales and Marketing, StorMan USA
Other posts by this author...
|
|
