Month: January 2015

Referrals in Business

By far, the single most effective and inexpensive marketing tool is referrals.  Simply stated it is a ‘Selective Word of Mouth’ form of marketing.  The key to its success relies in the ‘Ask’.  This is where the business asks its existing customer to refer a future client or customer.  It is most commonly used in …

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Cost of Sales – Various Formats

Many business owners misunderstand the use of term ‘Cost of Sales’ by restricting it to just simply ‘Cost of Goods Sold’.  Basically, most business entrepreneurs and even accountants don’t realize that it has several different names and presentation formats.  But it is essentially costs of sales.  Cost of Sales is the generic term used.  However, …

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Estimated Tax Payments – Why and How

In the normal taxpayer relationship with the Internal Revenue Service, the taxpayer is an employee and via withholding, taxes are paid the U.S. Government by the employer.  Basically the employer pays the tax after each payroll run on behalf of all the employees and the corresponding mandated matching taxes (Social Security and Medicare).  But in …

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Real Estate Syndication

Have you ever wondered how apartment or office complexes are financed?  A typical complex will have 80 to 100 units and the cost of construction will approximate $7,000,000.  So where does this money come from?  Your average person will think it is financed by a mortgage of some sort.   Well, this is partially true, but …

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Restaurant Profit and Loss Statement – Best Format to Use

A well organized and understandable profit and loss statement can provide infinite value to a restaurant owner.  The best format to use allows the owner to understand his prime costs, total variable costs and the required contribution number necessary to cover fixed costs and desired profit.  Naturally, every business operation is about the bottom line.  …

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Limited Liability Company – Step By Step Setup

There is multi-step process to establish a Limited Liability Company (LLC).  You must first be recognized by the state of origin and then apply to the Internal Revenue Service to identify the particular tax entity arrangement.  Both recognition processes have several steps involved.  This article guides the entrepreneur through each of the steps to create …

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Limited Liability Company – Introduction to Basic Principles

The Limited Liability Company or LLC is really a fusion of two forms of business entity status.  Each has unique positive attributes and legal protections.  The first is the corporation.  Every state allows this form of business entity status.  It basically protects (shields) the owner from lawsuits and financial recourse.  The second entity status that …

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Fixed and Variable Costs in a Restaurant

Many restaurant owners and managers do not understand the difference between their fixed and variable costs.  The problem with defining the two types of costs relates to their connection with sales.  In addition, reasonable assumptions have to be made in order to delineate between fixed and variable costs in the food service industry.  This article …

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Price to Earnings Ratio – Introduction and Interpretation

Price to Earnings Ratio (P/E) is an analysis tool used to evaluate publicly traded stock.  It is a simple mathematical formula relating the stock price in the market against the prior 12 months of earnings.  The following is the formula:  Price to Earnings Ratio = Current Stock Price in the Market/Prior 12 Months of Earnings …

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