December Action Items for Business Owners

Now that we are in December, the Viking team wanted to give you a short reminder on a few questions business owners should be asking themselves. Here are our top four:

Number One: Do I have a W-9 from everyone I will need to file a 1099 for?

The W-9 form must be filled out by self-employed workers such as independent contractors, vendors, freelancers and consultants. This will aid in the filing of 1099s required of business owners.

Number Two: Is it time to make that asset purchase to aid in tax mitigation?

Purchases will allow your tax accountant to utilize current depreciation rules to lower your tax burden.

Number Three: Am I prepared to close my books at the end of the year?

Make sure your financials are in order and that all items have been entered.

Number Four: Have I prepared my 2021 budget?

An often overlooked planning activity that will help you prepare for success in the coming year. For more details, read last month's blog, The Benefits of Budgeting for Your Business.

If you need help answering any of these questions, contact us. We would be happy to discuss these issues with you. As always, any initial discussions with Viking are free of charge. We look forward to helping you.

The Benefits of Budgeting For Your Business

As we near the conclusion of 2020, there are several actions that can be taken to prepare for a successful 2021. One of the most important, and often overlooked, is creating a thorough budget for the coming year. There are numerous benefits to creating a budget that can lead to increased profitability.

The first step in the budgeting process is creating a sales forecast for the coming year. A sales forecast should not be based on a flat percentage growth. A sales forecast should be the result of analysis of the current customer base and the business development strategy. The current customer base should be analyzed for opportunities to grow the relationship. The business development strategy should define the goals regarding the addition of new clients / new revenue throughout the coming year. Combined, this should form your sales forecast.

Next, expenses should be analyzed. There are four broad expense categories to analyze:

1. Cost of Goods Sold (COGS) – Can processes be changed to increase efficiency? Are your vendors providing the best prices / value?

2. HR – Are you hiring the right level people at the correct salary? Can you pay less for equal benefits?

3. Variable Costs – are you getting return for your discretionary spending?

4. Fixed Costs – Is what you pay for non-revenue generating items (insurance, rent, etc.) appropriate? Do you need to shop the market?

Finally, analyze needs for the coming year. Do you need a new piece of equipment? Do you need to add personal? These items are included in an effective budget. Following these steps will provide you a sound budget for the upcoming year. A sound budget provides many benefits. It provides a benchmark against which to compare results. It defines to your

organization the goals of the company for the coming year. It provides tools for financial control. Most importantly, if forces ownership / management to quantify what to achieve, how to achieve it, and what is needed to achieve it.

The experts at Viking Advisory Group can assist business owners with this valuable process. With years of experience in numerous industries, we can provide structure to the budgeting process and anticipate challenges that come with growth and change in the market. Please feel free to contact us so that we can discuss how to assist your business.

Client Spotlight - Box Gang Manufacturing

There is no greater feeling than sharing in the success of our client partners. Recently, we received news that Box Gang Manufacturing had been named to The Fast 100 by The Houston Business Journal. This list recognizes Houston-area private companies with the fastest revenue growth over a two-year period.

ABOUT BOX GANG

Box Gang Manufacturing is based out of Houston, Texas and has a network of partner manufacturing facilities throughout the United States and Canada. They specialize in providing all types of waste, recycling, and environmental handling equipment. They build new equipment and can customize containers and compaction equipment for their customer’s individual needs.

Owner Rafael Marrero is a veteran and graduate of the United States Air Force Academy. His background has been with Fortune 500 companies, with expertise in operations, global supply chain management, and labor management.

MEASURED RESULTS

Our relationship with Rafael and Box Gang began back in 2017. With our sights on the future, Viking and Box Gang worked together to establish policies and procedures to ensure that Box Gang was positioned to operate efficiently and enjoy continued growth in the market.

In a little over 3 years, Box Gang has seen over 40% revenue growth during their engagement with Viking. This increase in production necessitated a new facility to handle the increased demand. Viking was able to assist Box Gang in procuring financing for a 140,000 square foot manufacturing facility on 11 acres at an effective interest rate of 3.79%. We at Viking value our relationship and look forward to the continued success of Box Gang Manufacturing.

If you have any questions about our outsourced finance and accounting services, or have a need to raise capital for your growing business, please contact us at 713-454-7641 or info@vikingadvisorygroup.com.