Protect Yourself against Identity Theft
May 7, 2012 | 
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This week on the Wealth Wisdom blog, we’re going to cover identity theft in detail to keep you protected and help you recover should you ever fall victim to theft.
Identity thieves can empty your bank account, max out your credit cards, open new accounts in your name, and purchase furniture, cars and even homes on the basis of your credit history. And what will you get in return? You’ll be left to clean the mess they made and restore your credit history through a painstaking process.
Here are some tips to take to help prevent becoming a victim of identity theft:
1. Check yourself out
It’s important to review your credit report from time to time. Once a year, you can check your credit report for free by contacting the Annual Credit Report Request Service. Check to make sure that all the information contained in it is correct, and be on the lookout for fraudulent activity.
If you need to correct any information or dispute any entries, contact the three national credit reporting agencies: Equifax, Experian and TransUnion.
Business Valuation and Why it’s Important
May 1, 2012 | Subscribe to our RSS Feed
Why business valuation?
Business valuation is a critical component to your estate or business succession planning. Your business maybe your largest asset, and if you plan to engage in either one of these types of planning, at some point you will need to determine the taxable value of your business interest. An incorrect value (i.e. one that is underestimated) could cause you to miss out of tax-saving strategies, while a value that is inflated could result in an investment of time and money in unnecessary planning.
Why might a valuation be needed?
Business may need valuation for any of the following reasons:
- May be no active market to set price
- Determine capital gain
- Sale of business to family member or outsider
- Transfer of business under buy-sell agreement
- Transfer of business interest by gift
- Estate tax purposes
2012 MD General Assembly Recap
April 12, 2012 | Subscribe to our RSS Feed
The 2012 Maryland General Assembly closed session on Tuesday, April 10th, ending a 90-day session in which legislators discussed and made decisions on 2,580 bills designed to alter current Maryland legislation. While the assembly made decisions on a few key tax bills detailed below, they failed to pass a significant number of revenue and tax bills, increasing the possibility of significant cuts to the state budget.
SB 523
Affect: Increase individual income tax for persons with income over $100,000.
Verdict: Declined due to negative impact on small business owners. SB 523 could be resurrected in a special session.
HB 1051
Affect: Imposed taxes on 29 common services. (We talked about this one before..)
Verdict: Declined
SB 249/HB 784
Affect: Imposed a 6.25% individual income tax bracket on those with high incomes.
Verdict: Declined
HB 1472
Affect: Would have allowed counties to impose biased property tax rates on business owned properties.
Verdict: Declined
The General Assembly discussed numerous important topics aside from tax, including the Maryland state budget, economic development, civil liability and others. For an in-depth recap of the session and all the topics covered, check out this Maryland Chamber of Commerce Memo.
Glass Jacobson’s team stays abreast of changing legislation in Maryland so that we make sure our clients are given the most up-to-date, credible information. Feel free to contact our team with questions.
Growing and Expanding Your Team
April 2, 2012 | Subscribe to our RSS Feed
Roughly 1 in 4 employees quit each year, and in a downtrodden economy, a great majority of people may be looking to fill the job position. Maybe it would be beneficial to promote from within to fill the position. How can you make sure that you hire or promote the “right person” for the job? David Lunken, Principal of Cedarcroft Advisors, came up with a few things to watch out for during the process of hiring and promoting to grow your team.
1. Begin with the end in mind. Job descriptions are not always the way to go when trying to lure applicants. David recommends coming up with at least 3 measurable “key result areas” that support the overall goals of the firm. An easy way to come up with these is to imagine, in a year’s time, what you would have liked the employee to accomplish. Make sure these goals are results oriented and able to be measured.
2. Don’t trust resumes. 50% of all resumes contain blatantly fraudulent information (mostly in the area of education) and 53% of all resumes contain significant inaccuracies. Falling in love with a resume could lead to a bias in the interview process, and the information you based your bias on may not even be true!
3. Bring objectivity to the interview process. You may be interviewing someone who is currently working for you, and that brings the risk of bias. Also, as mentioned previously, you may feel a certain way based on your impression of a new applicant’s resume. Objectivity is a fine line, but is a necessity in finding the right person. David recommends using an assessment tool, such as PI MidAtlantic’s Predictive Index (PI) Survey, which measures personality traits and behaviors related to how people work. You can describe an ideal candidate for the job, survey applicants and see how their behaviors measure up to your requirements. From the results and an extensive report, you can identify areas of concern that will allow you to ask the best questions in an interview.
4. Promote on success at the next job. As stated earlier, it may be easy to promote someone who is currently working for you and doing a job worthy of reward. David warns that business owners should be most concerned with how that person will perform at the new position, rather than how they perform at their current job. Sure, the person you have in mind might be a hard worker, always on time and has no problem staying late, but there may be some fundamental behavioral difference that could prevent them from performing the new job exactly the way you want it done. Though they may be a great worker, they may not be your ideal candidate for the position.
If your business is growing and you need to build a sophisticated team of business advisors, or if you are interested in utilizing the PI Survey for evaluation of job candidates, contact us.
5 Key Financial Ratios Business Owners Cannot Afford to Ignore
March 23, 2012 | Subscribe to our RSS Feed
On Wednesday, March 21st, we learned from Tammy Schneider, a manager at Glass Jacobson and the Director of our Women in Business Practice, how helpful financial ratios can be when growing a small business.
Check out Tammy’s full presentation Key Financial Ratios for Small Business Owners, but for the cliff notes version, there are 5 key financial ratio catagories (often dismissed) that can play an important role in decision making for your business. These are:
- Liquidity- a measure of the company’s ability to meet obligations as they come due. One way to improve liquidity is to avoid pre-paying expenses or Accounts Payable to keep funds inside the business.
- Profits and Profit Margin- a measure of whether the trends in profit are favorable for the company. More sales is not the only way to improve profit margin- watching expenses can be just as effective. What do you spend on office supplies?
- Sales- a measure of how sales are growing. You should always look at sales in conjunction with profitability. Increasing sales don’t mean much if expenses are also increasing.
- Borrowing- a measure of how responsibly a company is borrowing and managing debt. Banks are obviously looking closely at this one! You may have heard the term “EBITA” thrown around. Its actually an acronym: Earnings Before the deduction of Interest, Tax and Amortization expenses.
- Assets- a measure of how effectively the company is utilizing its fixed assets. The “Return on Assets” calculation measures the ability to use assets to create profits. This is an important number to look at when evaluating managers and how well they use the assets available to them.
Are you currently looking at these ratios when making decisions for your business? If not CONTACT US FOR A COMPLIMENTARY RATIO ANALYSIS.
Tammy dispelled the myth that certain financial ratios are only helpful to larger companies with big numbers in their bottom lines at our fourth Women: Protect Yourself workshop,
“Business 201: Taking Your Business to the Next Level”
Along with Tammy talking about the ways financial ratios can help, we heard from:
Gregory S. Weiner, Esq. Hodes, Pessin, & Katz, P.A. on legal issues and minority certification for women business owners, and
David Lunken, President, Cedarcroft Advisors, on effective communication for hiring and management styles.
For more information on the Business 201 workshop, contact us.