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Monthly Archives: January 2015

Dale Hammernik Reveals The Importance of Specialized Knowledge

Well, this week I want to tell you a story, and it’s one that will help take some stress off ye olde plate, for you and your business.

There are more than a few lessons in this (old) story …

… the importance of knowing “who to call”
… the amount of knowledge that doesn’t get passed along during staff transitions
… bravely charging what you’re worth …

But I’ve saved the most pertinent lessons for the end.

A few reminders before I share them:

* 1099’s and W-2’s are due to be mailed by Monday! If you need help with this process, this is something we *routinely* do, even for previous or non-clients. Give us a call: (414) 545-1890

* On the personal side, if you are one of our business clients, we are also glad to handle the preparation of your personal tax return. Depending on your business entity, we cannot file your personal return until your books are in order. Start that process now.

[And, of course, this is also something we are glad to help you with. Don’t try to “go it alone” in these areas … it can be a 4-5 figure mistake!]

Now, assuming you’ve got those w-2’s and 1099’s all set, delegated, etc…. let’s talk about the right kind of knowledge …

Dale Hammernik Reveals The Importance of Specialized Knowledge
“Most people give up just when they’re about to achieve success.” – Ross Perot

Some years ago, one of the major manufacturing companies in this country was facing a crisis. The central conveyor belt of its automated assembly line quit running and brought the entire plant to a stop.

Although they tried everything they could think of, and even brought in several consultants, no one was able to get the conveyor belt running again, or even to identify what caused the breakdown in the first place. The company was really in a bind. With ongoing overhead, and the loss of production, the company was losing money at the rate of $1,000,000.00 a day.

Finally, after a week of down time, the big brass told the plant manager to call Tom — the mechanical engineer who had retired the year before, after 25 years with the company. The conveyor belt had been Tom’s specialty and primary responsibility.

When Tom got the call, he caught the next flight from the city where he now lived and arrived at the plant the next day. He met with both the local vice president and the plant manager to get as much information as he could as to what had happened and what they had tried. He then walked slowly along the belt until he came to a particular point.

He put his ear against the machine and listened. He asked for a hammer and then gave the machine a swift and forceful blow.

“Give it a try now!” he called to the foreman. The conveyor belt started right up and ran like a dream.

Tom then left and went back home, but before he did, the company vice president told him to send them a bill for what he had accomplished. Two days later, the company received Tom’s invoice for one million dollars!

Thinking that was way too high for the little time Tom had spent to solve the problem, and how he did so with just a single blow from a hammer, the company wrote back and asked Tom to provide them with an itemization. This was Tom’s response:

One hammer blow: $2.00
Knowing where to hit it: $999,998.00

With the receipt of that simple invoice, the company came to understand the reason for Tom’s fee and immediately issued a check to him for one million dollars.

Special knowledge is the key. Although the company’s leaders had to be reminded of that fact by receiving Tom’s invoice, as soon as it did, they knew he was right. They could have given hammers to every employee in the plant and even had the big brass banging on the machine from sunrise to sunset, but it would have done no good … because they didn’t have the knowledge; they didn’t know where to hit it.

This is an old story, told in different ways, with different names and amounts. But it’s powerful for a simple reason: labor is NOT about how much “time” is put into executing a particular solution to a problem — it’s knowing when and how to do it.

In the realm of preparing your tax return for your business, I urge you … do NOT fall prey to the thinking that a software program or forms downloaded from the internet can suffice to enable you to preserve your resources, or properly leverage the multiplicity of credits, loopholes and deductions available.

Give yourself and your business the gift of financial peace of mind during tax season, and do it with someone who knows how to do it right.

I’m grateful for our partnership, and for your referrals!

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Six Questions For A Clear-Eyed Look At Your Business (Part 2)

I have a few more questions for you today.

Last week, I identified the six major mistakes made by local business owners … and I’d like you to thoughtfully consider the questions I’m asking, and send me an email with YOUR answers.

You don’t have to email, of course … but please do consider these six issues as you work through growing your business — they can really catch you off guard sometimes.

As I mentioned last week, most of these issues are things which I and my firm do not handle, which is why, if necessary, I will gladly recommend to you someone who can assist you with them — and do it well.

So, here are the final 3 …

Six Questions For A Clear-Eyed Look At Your Business (Part 2)
“I look to the future because that’s where I’m going to spend the rest of my life.” -George Burns

Continuing from last week, every business has its blind spots.

Too often, legal and financial planning are left behind in the pursuit of operations efficiency and sales.

And that’s a huge mistake.

Take a look at each of these questions, and if you are troubled by any of your answers–give me a call ((414) 545-1890) or send me an email…

Mistake #1: Is the value of your business firmly established? [Buy/Sell Agreements]
Mistake #2: Is there an emergency plan? [Will & Asset Protection Strategy]
Mistake #3: What is to happen next? [Business Succession Plan, and more]

#4: What are your retirement plans?
Questions to consider:
* Do I know how much income I will actually need at retirement?
* How much control in the business must I maintain to secure my retirement income?
* Have I looked into financing options for key employees to buy me out?
* Do I want to be running my business, full-time, five years from now?
* Do I have contribution protection for my retirement if I were to become disabled?

Too many business owners view their business as their “retirement cash cow” … but have not made serious plans for how it can BE that cash cow.

#5: Are all of your eggs in one basket?
Questions to consider:
* Do I have reliable investments, other than my business?
* Will my business assets account for less than 25% of my retirement plans?
* In the past year, have I spent more than one hour planning my retirement?

If you haven’t diversified your retirement income outside of your business, you could be in trouble.

#6: Is there a REAL tax strategy?
Consider these questions …
* Am I pro-actively planning to deal with tax law changes?
* Have I determined my financial goals — and how taxes will affect them?
* Will I maximize my tax-free earnings in retirement (and before retirement)?
* Do I have an exit plan for my business — and is it written down?

Again, all of these issues always seem “procrastinate-able” on the front end … but if you don’t have a good answer to more than a couple of the above questions, you might be cruising for a financial bruising.

We will either help you fix these issues ourselves, or put you in touch with someone competent who can help to fix it. Call: (414) 545-1890 or send me an email.

I’m grateful for our partnership, and for your referrals!

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in business tax preparation and planning (for Waukesha County business owners, as well as families). And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Six Questions For A Clear-Eyed Look At Your Business (Part 1)

I have some questions for you today.

Running a business effectively, seeing it grow (or shrink), can be a time-consuming process, so I don’t blame you for little mistakes you may have made along the way.

But mistakes made out of improper planning — well, I can’t let those happen to you and sit idly by.

So, in that spirit, and as we launch into 2015, I’ve identified six major mistakes made by local business owners … and I’d like you to read the list (starting with the first three this week), thoughtfully consider the questions I’m asking, and send me an email with YOUR answers.

You don’t have to email, of course … but please do consider these six issues as you work through growing your business….

Since we mainly work with business tax clients, some of these issues are things which I and my firm do not handle, which is why, if necessary, I will gladly recommend to you someone who can assist you with them — and do it well.

But regardless, you should take this chance to look these over … and, further, to review the little treat I left for you at the end.

Six Questions For A Clear-Eyed Look At Your Business (Part 1)
“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” – Henry Ford

When you’ve seen the “unexpected” strike so many businesses over the years (as I have), you tend to see certain optimistic New Year’s projections made by entrepreneurs with a bit of a jaundiced eye.

I’d hate to see you get burned.

Which is why I’m about to raise some issues to you, and ask you some questions. It’s a bit of a different approach than I normally take in my blog, but if you take it seriously … it can be a transformative process.

Take a look at each of these questions, and if you are troubled by any of your answers — send me an email … and again, if it’s not something we’re equipped to handle, we can equip you with a good advisor.

#1: Is the value of your business firmly established?
Questions to consider
* Have I ever had my business value appraised by an outside party?
* Do I have a formal buy/sell agreement in place?
* Is my buy/sell agreement funded?
* Does my buy/sell agreement adequately protect my heirs, my business, and my partners?
* Has this agreement been reviewed in the last 3 years?

If you have any plans to someday extricate yourself from your business (and you should ALWAYS consider your exit strategy), these are critical questions.

#2: Is there an emergency plan?
Questions to consider
* Do I have a will, and is it up to date with my business wishes?
* Do I have a plan to retain key employees if something were to happen to me?
* Are my assets protected from potential litigation?
* Have I identified and written down my trusted advisors?

Unless you plan to forever cheat death, a business owner would be foolish to not prepare for that event.

#3: What is to happen next?
Questions to consider
* Do I have a formal succession plan prepared and on file?
* Does my succession plan have a provision for disability?
* Have I involved both family members AND key employees in my succession planning?
* Do I have a disability buy-sell, or overhead expense coverage?
* Do I have contribution protection for my retirement if I were to become disabled?

Again, these eventualities always seem remote on the front end … but if your answer is “no” to more than a couple of the above questions, it would be a good idea to get in contact with someone competent to help you fix it.

I’ll be back next week with mistakes 4, 5 and 6.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in business tax preparation and planning (for Waukesha County business owners, as well as families). And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates

Dale Hammernik On Saying No and Staying Focused in 2015 (Part 2)

Last week, I wrote about saying “no” in your business.

In the days after posting it, I realized another place where we need to say “no”, if you will — and it’s one which is possibly much more important.

It’s about how we, as business owners, process the world around us.

Frankly, I’m tired of seeing small business owners who are “beaten down” by all the fear and stress in their lives, and there is one major source for it — which I would like to have you understand is entirely optional.

And I suggest you “opt-out”, if you will.

Dale Hammernik On Saying No and Staying Focused in 2015 (Part 2)
“One resolution I have made, and try always to keep, is this: To rise above the little things.” -John Burroughs

Life as a small business owner isn’t always a trip in the sunshine.

But it’s made so much harder by the tendency of our world to suffocate you with mental junk and global negativity.

I believe that the number #1 danger for small business owners moving forward in 2015 is allowing today’s world to starve your brain with “junk food” and deaden your spirit with the overwhelming feeling that you are small, insignificant … helpless.

I’ve learned to avoid the 24-7 news channels, and the sites online that traffic in fear. I figure that I’ll see what I need to when seeking out resources for our clients about current events. But recently, I did, in fact, watch some CNN.

Now, CNN is about as bland as you can get — it’s “normal” to “normal” people. But I also realize, most “normal” people accomplish relatively little in their time on this planet (at least on the outside). Those of us who are going somewhere in life must have better things to do than to listen to talking heads opine about dozens of tragedies that we can’t (and won’t) be able to do anything about.

But right now, the world is swimming in negativity. And you need to be serious and proactive about it. Because — if you don’t — it’ll kill your business, kill your sales, kill your dreams and everything you really care about.

The mass news media is NOT your friend.

They feed on fear, and they sell paranoia, division and hyperbole. It’s what they do.
And not only must you protect yourself from this drip, drip, drip of depression, you need to fight it on behalf of your clients.

Tell them what’s good. Greet them with a smile and with encouragement. Tell them what they’re doing right. Give them a voice to the hope within their bones–which is too often buried in a junkpile of media-fueled negativity.

You (and they) need to celebrate little tiny victories. Every. Day.

This is an essential skill for a business owner: when you have a major victory in your life, you need to find encouraging people who will celebrate it with you. Because good news is good news indeed.

Best to you. May your 2015 be full of JOY.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Waukesha County families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates