Summer 2007

President’s Message

Re-discovering the value of a good book.

During the past year, I’ve read more books than the previous six years combined — much of it out of necessity, as a new entrepreneur. Some books were “classics”, many contemporary, almost all were business related themes. Much of my reading is related to either a specific topic that I have little knowledge of (marketing, for example), or general topics on entrepreneurship and designing your career around the type of lifestyle you desire.

Unfortunately, many of us do this backwards. We adapt our lifestyle around career demands. One day we wake up and realize that 10, 20 or 30 years have passed and that we’ve been going along for a ride instead of grabbing hold of the steering wheel.

Some of you have probably heard of the new, best-selling book by Tim Ferriss entitled The Four-Hour Workweek. I recently heard an audio interview with the author that I thought was fantastic, and as a result of hearing it, I immediately purchased the book.

The title may seem a little far-fetched, but the book is about “lifestyle design” and how to use work to get the most out of life. It isn’t about getting rich or striving for excessive leisure time. It’s about creating an exciting and fulfilling life, supported by as little “traditional” work as possible.

Please click the link at the top of the page for a related free gift I think you’ll find very valuable.

As always, please feel free to forward this newsletter to anyone you believe may have an interest.

Best Regards,
Todd Rammler, CMA

Is a Flight Attendant Flying the Plane?

In this issue I’d like to present what I consider to be a major flaw in thinking that occurs in many small businesses.

The first time I meet with a prospective client, we have an informal “needs analysis” discussion. A variety of common issues come up in these discussions — cash flow, lending relationships, profitability, clarity/accuracy of financial reports, to name a few. Most business owners I talk to are experiencing one or more of these issues, but they don’t all share the same problems. It’s generally a combination of a few different things.

Except for one.

Before I share it with you, let me ask a couple of questions:

These sound like ridiculous questions, right? But consider this all-too-common, real life example.

I recently spoke to the owner of an $8 million dollar business that is struggling. Cash is tight, margins are thin, and the bank is giving them pressure. The person responsible for accounting at this company was transferred into the position from Human Resources. . . because they had some prior experience. . . years ago. . . working in. . . accounts payable.

How are the ridiculous questions above any different?

The One Common Problem

The one issue that many small businesses have in common is this: the primary financial person in charge of overseeing your biggest investment is in most cases a bookkeeper with little or no formal training and no real experience in accounting beyond day-to-day transaction processing. And often times, even that is hit-and-miss.

The financial oversight of a multi-million dollar business is done–intentionally or unintentionally–by a clerical bookkeeper.

How is this person going to help you build value in your business?

Mission> Impossible?

Many businesses today have a Mission Statement. A typical mission statement might read something like this:

“We strive to be the recognized leader in the ________ industry.”

“To be the premier provider of ________ products.”

A lot of lip service is given to mission statements these days, so let’s view our bookkeeper situation through the lens of the mission statement.

Do “industry leaders”. . .

Obviously, not every business can be the industry leader. . . and not every one wants to be. But if we substitute the words “Well run businesses” for “Industry Leaders” in the above set of questions, the answers are the same.

It’s going to be very difficult to be the leader in any industry if you don’t know more about your numbers than your competitors know about theirs. And you’re not going to get there by relying on a clerical bookkeeper.

And, it’s not the bookkeeper’s fault. They were hired to be a bookkeeper. Not a financial advisor. Not a Controller. Not a CFO.

A Critical Competency

To build value in your business it is critical to know your key numbers inside and out. It is critical to know what happened (past), what is happening (present), and what is likely to happen (future). . . and plan accordingly. Without this critical competency, you’re merely “hoping” things are going to work out.

If you’re not planning you’re hoping. And in the words of best-selling business author Dan Kennedy:

“Hope is not a strategy.”

Contact Michigan CFO Associates, Inc. for more information on Management Accounting solutions for your company.

The Michigan Business Tax

After a lengthy and oftentimes contentious debate, Gov. Jennifer Granholm signed Michigan’s new business tax into law on July 12, 2007.

While these are the early days of the new legislation, those in favor of the new Michigan Business Tax (MBT) state it is designed to give seven of every 10 Michigan businesses overall tax cuts.

The legislation still will raise the roughly $1.9 billion now raised through the 30-year-old Single Business Tax. The old tax will expire at the end of this year. The MBT will take effect Jan. 1, 2008.

Under the new tax structure, credits will be available for companies investing in Michigan, large entertainment and sports complexes and for large Michigan-based retailers. The law also helps domestic automakers and large manufacturers by lowering personal property taxes on machinery and equipment. But out-of-state companies that sell goods in Michigan and don’t have a significant physical presence could wind up paying more.

Use the link below to visit the Michigan House Legislative Analysis Section for a thorough summary of Michigan’s new business tax system. Here are the highlights:

It should be noted that these are just the highlights of the complex legislation. Visit the link below for a summary of the recently passed bill available on the Michigan Legislative website.

For more information click on the following link:

Contact Michigan CFO Associates, Inc. to see how you and your business can better prepare and plan for next tax season and upcoming Michigan tax regulation changes.

A Mid – Year Check-Up: Take this Quick Financial Check-Up for Your Small Business

Small-business owners should take the opportunity in the next few weeks to conduct a mid-year financial check-up.

It’s a good time to take stock of the company and see whether it’s meeting its goals and whether there’s enough cash on hand for tax payments. In addition to tax considerations, take a look at these areas for the second half of the year.

Contact Michigan CFO Associates, Inc. for more information on a mid-year checkup.

The Coming Skill Shortage

What Happens When the “Baby Boom” Bubble Bursts?

That’s what many experts are asking, considering that more than a quarter of the current working U.S. population — the baby boomers — will reach retirement age by 2010.

Will the retirement of the ‘baby boom’ generation lead to a labor shortage in the U.S. or will there instead be a skills shortage and increased unemployment as organizations offshore jobs in search of cheaper skilled workers?

According to the U.S. Bureau of Labor Statistics, the overall labor force will grow by 12 percent by 2012. But the percentage of workers aged 55 and older will increase by nearly 50 percent over the same period.

The “Future of the U.S. Labor Pool Survey Report” from the Society for Human Resource Management (SHRM) finds that as millions of baby boomers retire, and with some workers now entering the workforce lacking core competencies, these are serious workforce issues that could affect small businesses.

How to Cope

Given these workforce shifts of massive retirement, and lack of skills of entering workers, the small business owner can consider the following:

Take a Close Look: Many experts suggest taking an inventory of employees’ skills. As one expert noted, “You can’t tell what skills you are going to lose if you don’t know what skills you have.” A so-called skills-gap analysis will help you determine what skill sets you will be losing, although it won’t necessarily help determine what skill sets you need.

Skills Training: Many forward-looking small businesses provide continuous skills training for incumbent workers or are researching and modifying current employee training programs to remain competitive. As a rule of thumb, organizations are wise to invest 3% of payroll whenever possible in training employees.

Focus on Retention: If you want to keep certain employees, look at retention policies. Your boomers may choose not to retire if you can change the structure of the employment contract so that they can provide their skills on a more flexible work schedule.

In short, the coming baby boom retirement will drive change in the workplace for companies of all sizes, including small business. Benefits, 401(k) plans, self-service HR applications, hiring, training, retention will all be affected in the upcoming decades.
Small businesses can do their part to address the issue by workforce planning and by being more creative and open-minded in the tactics they use to attract and retain talent.

Contact Michigan CFO Associates, Inc. for more information or assistance with employee related issues.

Free Gift For Our Readers

As discussed above, I recently heard an interview with author Tim Ferriss on his new best-selling book, The 4-Hour Workweek. If you would like to hear the interview for yourself, I will send you an audio CD absolutely free – just tell me where to send it. It’s a little over an hour long. You can listen to it in your car on your way to work. It’s definitely worth hearing.

To get your copy of the CD, email me at
with your name and address where you’d like it sent.

Offer expires August 31,2007.