As a small business accountant in the Fort Collins area, maybe you could talk about the kinds of services you provide and what the business climate is like in that area. Generally what type of businesses are there and what’s Fort Collins like in terms of a business community?
Steve Wick of Steven J Wick & Associates – CPAs – Fort Collins Certified Public Accountants
Steve of Steven J Wick & Associates PC., Small Business Accountant, Fort Collins, Colorado:
About Fort Collins Small Business Community
Fort Collins has a high amount of diversity within the community. The business world here has a consensus that it is a very good place to do business in. This is particularly true for small businesses.
Fort Collins has Colorado State University with roughly 30,000 students that go there. That is along with all the services that support that. There is a strong brewery industry, which is alive and well despite the influence of Covid. I believe we have the title for most beer per capita produced, along with strong national exports, so there’s that…
Fort Collins has a lot of presence in the tech industry. For example, Hewlett-Packard has a strong presence here along with many related businesses. There is also a very big developing industry in alternative energy: solar, wind, biofuel, and so on. These are spread out all the way down to Denver. Smart small business accountants are therefore very much in demand in the Fort Collins area.
Fort Collins Types of Small Businesses
By way of the types of businesses, a lot of these are manufacturing alternative energy businesses in Fort Collins and spread out into surrounding communities. A large part of this is alternative energy technology design such as the microchips and other control components for computers managing alternative energy sources.
Small Business Accountants Fort Collins Best Help Local Intelligence – Part One
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Small Business Accountants Fort Collins Best Help Local Intelligence – Part One Transcription
Colorado State University has a testing lab that works with and helps local small businesses. The prevalence of local testing facilities helps as well. These are the things that add up to making the location so attractive to entrepreneurs and small business owners. The business owners can easily work in close coordination with local professors whose focus is on working with private industry.
So, there is a lot of start-up high-tech development going on in the Fort Collins area.
Covid Impact on Local Small Businesses
With all these things going on through the pandemic it seems that generally speaking, the local employment rate has remained pretty stable.
The high-tech industry has remained strong and of course, people drink beer when they are happy, and they also drink beer when they are sad. So that industry seems to have been stable as well!
Fort Collins would appear to have not been hit so badly, certainly no slump like a lot of the rest of the country.
All in all, Fort Collins is and has remained a very vibrant area. Personally, for me, I love places and communities that have universities in them. They have a kind of younger vibe within the community. That seems to help to keep things going well, as well as interesting and different all the time.
Fort Collins a College AND Small Business Haven
The community is about 170,000 plus about 30,000 students. Fort Collins is a bit of a college town and there are a lot of college kids here along with the full range of support services and people who work for the university. However, this is pretty well balanced with industry, particularly in hi-tech areas.
Small Business Accountant Typical Clients – Beyond Basic Bookkeeping
As local specialist CPA, we consequently have a number of clients that are in hi-tech, development, and manufacturing renewable energy solutions.
For example, one of our accounting clients designs a lot of different things that are related to natural gas. These products and processes are designed to burn the gas more efficiently along with methods for packaging in a smarter way. They are mostly an engineering development company, they do not manufacture, instead, they subcontract the manufacturing out.
They, therefore, have a lot of research and development that goes on every year. At Steven J Wick & Associates, P.C. we work closely with them across several fronts which go far beyond basic bookkeeping. For example, in the design and development of new products, we help them maximize the research and development tax credits. That can make a lot of difference to their financial viability.
When a savvy small business-focused accountant helps to uncover unrealized tax credits they become an asset, not a cost to a Fort Collins business.
How Fort Collins Small Business Accountants – CPAs Add Value
With research and development credits, in order to qualify, you need to go through four Gates. You have to be able to document what you’ve done, how you’ve done it, and what different methodologies you used.
Oddly enough in R&D of this type, failure can be a good thing when it comes to getting the R&D credits. You have to show that, you’re testing and following solid scientific methodology to get to your end goal. The end goal could be a new process or an actual product. In either case to get the credits you have to show the process you used to get there.
We are usually quite involved in the management and documentation of the process. Sometimes on a really big project, we may contract out parts of it to trusted local specialists.
There are a surprising number of smaller businesses that do not even realize that they are doing R&D or that they don’t actually need a formal R&D department and that they could get significant credits at all. In those cases, we are identifying the relevant projects and assisting them with the needed documentation to win the credits. That is where the savvy certified business accountant goes far beyond basic bookkeeping services to provide additional value and profit to local small businesses.
Small Business Accountant Fort Collins R&D TAX Credits – Part Two
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Small Business Accountant Fort Collins R&D TAX Credits – Part Two Transcription
What are we talking about in terms of credits? What kind of amounts of money are at stake?
Just this last year we worked with clients getting credits in the range of $50,000 along with others that were close to $100,000. There are also quite a few smaller ones between $5,000 to $15,000.
Therefore, getting the documentation right, going through the right questions, and making sure they get through the ‘four gates’ required to qualify is a big deal.
Fort Collins Small Business Accountant Tax Credit Focused
Much of what we do as a small business accountants is tax credit oriented. This year in particular is crazy as there are hundreds of them.
This is driven by a stream of new tax laws. A ton of tax credits are applicable to small Fort Collins businesses. For example, employee retention tax credits, which are affecting at least 50% of my small business clients. They can typically get some credits for basically keeping people working during COVID.
Tax Credits are Across the Board, Regardless of Industry.
For employee retention tax credits for 2021, if your revenues are down 20% compared to 2019 if you are able to show 20% down for the quarter, then you get it. That is great credit. It is 70% of each employee’s pay up to $7,000 per quarter. As a business owner, you do not want to miss that.
What I would say to any Fort Collins business owner is, do not assume anything. Talk to your small business accountant to make sure that you qualify. It is sure helping a ton of my clients right now.
Is This Something Small Business Owners Can Do Themselves?
The owners who think they can do it on their own miss out on something most times.
At Steven J Wick & Associates PC. in Fort Collins, our philosophy is that a good accountant, and good accounting, should be able to pay for itself and some, every time.
A good accountant should be able to do that at the very least, once a year. If not, three or four times over their cost.
We will sometimes point out to a new Fort Collins client that the work we did for them in the first three months paid for our services for the whole year.
In a recent case, we were able to show a new client, a sole proprietor pest removal business, that by switching them over to an S-corporation that action alone paid for our services for the rest of the year.
Pretty good deal I would say!
That is the beauty of working with an experienced local accountant, it is the service that keeps on giving, it just keeps giving for years and years and years to come.
Different Small Businesses – Different Challenges
Every small business has its own special challenges. If you are in the service industry, it is all about labor. You are probably selling two things, time and talent.
Restaurant Accounting Services. A restaurant on the other hand, besides head counts and infrastructure, is all about food and labor costs. Everything else is relatively stable. They also have to watch seats or fill rate or headcount. Along with dollars per plate or dollars per table. What is your average revenue on those and are they are trying to upsell desserts or wine? We have restaurant clients that are doing quite well, in fact, great with takeout.
Construction Accounting Services. With construction, we have a lot of contractors on our books, if you are a general contractor there is definitely a different set of books. Often projects are going to be six months to two years. Therefore, there is a difference to account for those versus, uh, somebody who maybe is a plumber.
Plumber Business Accounting Services. A plumber or a flooring guy is going to be in and out in a week, that is a different accounting practice for them with different numbers to be very aware of. Their small business accountant should deeply understand these different business models.
Small Business Accounting Fort Collins – A Good Accountant Should… Part Three
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Small Business Accounting Fort Collins – A Good Accountant Should… – Part Three Transcription
Small Business Imperatives – Common Elements – Critical Numbers
In all of these business types though there are critical numbers to watch closely and manage. Regardless of whether we are talking about labor and materials, whether a restaurant or a builder or manufacturer, there are certain numbers that you need to highlight and go from there. There may be inventory, i.e., knowing how much inventory is too much and understanding the accounting process and the timeline that it goes through. As small business accountants that is something we usually get into pretty deeply.
Do Small Business Owners Struggle with These Accounting Practices?
Yes, small business owners in Fort Collins trying to be their own accountant struggle with this a lot. They are constantly in cash flow hell. Typically, once we help them get on top of accounting processes, they become aware of the right numbers and a lot of the business’s problems evaporate.
It Usually Comes Down to Cash-flow First.
If you make something today, how long is it going to sit on your shelves before you sell it, right? Your basic in and out. As they tumble erratically through their accounting cycle, payables, and vendors, they have to pay receivables as they bill them. Then finally get the receipt for that money. How long is that?
Often small business owners work as if they are a bank. That is not usually the smartest way to run a business, it is a very common mistake.
When the small business owner does not deeply understand those things and the effect they can have on their business, financial troubles usually follow.
One of our new clients, right at the end of last month took his eye off the ball and lost a ton of money. He was doing great last year, then all of a sudden, right at the end, he was really doing well, then wham, bad cash flow management almost killed his business. Fortunately, we were able to work through it and now his financials are stable and solid with a nice feedback mechanism to help him stay on track.
Savvy Small Business Accountants Always Add Value
Do You See Common Elements Associated with Small Business Successes and Failures?
- Operating in a pride-driven way, for example building a new showroom without appreciating the cost benefits of doing so.
- Getting distracted and consequently not being out bidding jobs.
- Forgetting that it all starts with marketing.
- Making sure the pipeline is constantly filled.
- The owners try to do everything themselves.
- They end up going in at 5:00 AM and working until 9:00 PM at night and killing themselves in the process.
- Making sure they have the right people in the right roles so that the owner is not killing themselves.
- Trying to do the accounting at 9:00 PM when they are dead tired.
They might be an electrician or a plumber, they are working all day long. No one wants to start doing accounting at 7 PM, or 8 PM at night. However, if they do not have a good accountant, they have to do that. They have to get those bills out to customers so that they can get paid for all the work that they just did. Then they miss things and do things in a less-than-smart way. That makes their finances worse and before you know it, they are in a negative spiral.
Successful Small Business Owners Do Not Do It All Themselves
Less successful business owners try to do everything themselves, rather than bringing in specialists. Smart business owners who do well typically leverage other people. They have a local accountant who understands their business so they can focus on what they do well. That is the smart way to go. The less smart way to try and do everything yourself, not realizing that ultimately bringing specialists in pays for itself.
This mindset is not just about getting an accountant. Maybe they need someone in their office? Ad trusted Fort Collins small business accountants we work hard to help our clients think about what their time is worth per hour when they are spending time on the core of their business.
What they are good at, what makes their business money, and what makes it grow? When they are doing the work that drives their business, where they are worth the most, $100 plus per hour, that is time invested well. When they are doing things, they are not good at, they are not trained in, that other people can do, they should have other people do it. This is especially true when it is a $ 20-an-hour task.
You would not believe how often I discover the reason a pipeline is not filled, or a project does not get completed on time, is because the number one player in the company is spending large amounts of time doing $20 an hour of work.
Small Business CPA Fort Collins – Part Four
Their time is always better spent on the core of their business. What they are experts at. Not trying to do tasks that are not their specialty. It takes them three times longer, and they probably will do it poorly.
Fort Collins Small Business Accountant – Clients that do Better
- Fort Collins small business owners who have savvy accountants do better. It’s just a fact.
- Owners that know when to outsource or hire people to do the things they are not experts at do better.
- Owners that hire people to do work that allows them to focus on the essentials of their business do better.
- Owners hire people to offload the things that they are not good at doing better.
- Owners who are organized, driven, and goal-oriented, and yet know their limitations do better.
- Owners who are not afraid to have advisors close to them and take that advice do better.
- Owners that make customer service a priority do better.
- Owners that dedicate funds to building their pipeline, usually means marketing, do better.
- Owners that apply constantly monitored pressure on the gas pedal as against sporadic bits of marketing here and there will do better.
- 3% to 5% of revenue invested in a well-managed marketing budget can do wonders.
Lastly, small business owners that actually answer the phone do better!
- It is quite common that owners neglect to answer the phone or make sure the phone is answered because they are too busy.
- In the age of internet search, “he” (or she) who answers the phone, will tend to get the business”.
- Owners that rely on voicemail will lose between 30-60% of leads.
- When your website or business listing is just one in a search result list, if you do not immediately answer the phone, a significant percentage of searchers will just call the next on the list.
- People who use Google to search, want immediate results. That is just the world we live in.
As locally focused small business accountants in the Fort Collins area, we work hard to add value to our clients saving them costs, getting them all the tax credits possible as well as managing their basic bookkeeping needs. Our goal is always to pay for ourselves with additional profits and tax savings.
If you are a Fort Collins business owner doing it all yourself, give yourself a break and get professional help, from your local small business accounts. Save time, save money, and save heartache. Contact us at (970) 224-3366 or complete our simple small business accountants Fort Collins contact form and we will contact you.
