Winter 2007

President’s Message

Welcome to the inaugural issue of the Michigan CFO Associates, Inc., newsletter! The objective of this newsletter is to keep in touch with key customers, suppliers and professionals. The newsletter will highlight important issues facing Michigan small businesses, tutuorial articles, general business & management tips, mini “case studies”, and other common issues faced by local small businesses.

The format will be a “light read” highlighting issues, with links or assistance in finding additional information, if necessary.

I hope that you will find this communication beneficial. Please feel free to forward this newsletter to anyone you believe may have an interest.

Best Regards,

Todd Rammler
Todd Rammler, CMA

The Proposed Michigan Small Business Tax: What does it mean for your business?

In late 2006, Michigan Governor Jennifer Granholm proposed a new business tax –the Michigan Business Tax (MBT) — to replace the single business tax. The proposed MBT is based on a combination of income, gross receipts, and assets. As a business owner, it is important to stay informed about the bottom-line costs to Michigan small business from the various tax proposals that have been put forward to replace the Single Business Tax.

The Plan

As introduced, the current MBT plan would expand the current small-business exemption of $350,000 in gross receipts by phasing in the tax between $350,001 and $700,000 in gross receipts. Businesses with $350,000 or less in gross receipts would continue to be exempt. The proposed tax would use three components as the tax base. Business gross receipts would be taxed at 0.125 percent, assets at 0.125 percent and profits at 1.875 percent. Assets would not include inventory. In addition to the gross receipts exemption and phase-in, small businesses with less than $10 million in gross receipts and less than $115,000 in owner compensation would be allowed to use an alternative tax of 1.8 percent of adjusted income rather than the tax on the gross receipts, asset and income base.

Property Tax

Also under the MBT plan, businesses that are currently paying personal property tax on industrial or commercial property (this would include most business personal property) will receive an exemption from the current 24 mills education assessment. For most businesses this would be a 46 percent property tax cut.

Learn More

For more information on the plan, read the most recent Senate summary at:

Contact Michigan CFO Associates, Inc. to help plan for upcoming tax regulation changes.

The Bottom Line of Financial Management

As a business owner, you well know the importance of sound financial management. Yet this term has many meanings for each business owner. To put best practices into place, it’s helpful to start at square one — what does the term financial management mean, and what can this approach do for you?

The Basics

In general, the term “financial management” puts your numbers to work to make your business more successful. With good financial management practices, you will know not only how your business is doing financially, but why. And you will be able to use it to make decisions to improve the operation of your business. The fundamental tools of financial management are financial statements that analyze numbers from your accounting activities, including the Profit and Loss Statement (or Income Statement) and the Balance Sheet.

A Key Indicator

Often, it’s your financial statements that can offer one of the earliest warning bells that there’s something amiss. For example, you might be taking whatever income you can from your business and using it to pay down some of the loans you may have used to start the business. However, properly organized financial statements can show you that your income is not high enough to service your debt load. Without this key indicator, you’ll run your business into the ground simply trying to service your debts.

Accomplishing Goals

Financial management lets you accomplish important big picture and daily financial objectives, such as:

  1. Borrow money more easily. Not only can you plan ahead for financing needs, but sharing your budget with your banker will help in the loan approval process.
  2. Provide financial planning information for investors.
  3. Make your operation more profitable and efficient.
  4. Access solid financial information when faced with key financial decisions.

Excerpted from Start Your Own Business: The Only Start-Up Book You’ll Ever Need, by Rieva Lesonsky and the Staff of Entrepreneur Magazine, Entrepreneur Press

Contact Michigan CFO Associates, Inc. to learn more about sound financial management practices.

Team Building 101

It’s hard to find workplaces, even in a small company, that exemplify true teamwork. Whether you work with one person or many, it’s important for everyone to come together as a team and work toward the same goals.

A focus on teamwork has its place in any sized business, and it doesn�t have to be that involved or costly of an effort. You can create a teamwork culture by doing just a few things right.

Contact Michigan CFO Associates, Inc. for more useful tips on managing a small business.

Small Business Success Story

A local manufacturer was stuck in a quandary — they needed the help of a qualified and experienced financial professional to take their financial systems to the next level, yet they could not afford to add a full-time executive to the payroll. Their solution? The company engaged a part-time Chief Financial Officer (CFO) that specializes in working with small, growing businesses.

A Flexible Arrangement

Michigan CFO Associates, Inc. serves Michigan Custom Machines (Novi, MI) with financial analysis, budget and forecast development, cash flow management and financial oversight. The outsourced CFO is available to small companies for as little two days a month or several days a week, depending on the need.

A Perfect Solution

Notes Michael Schena, President of Michigan Custom Machines, “Michigan CFO Associates helped us to implement analysis and planning tools that we have always wanted, but did not have the in-house expertise to create. We now have the ability to manage the business much more effectively on a monthly basis to ensure that we’re hitting our targets. Using a contract CFO 2-4 days a month is the perfect solution for a company our size.”

Michigan CFO Associates has gotten to know the business on an in-depth basis, and is available to offer high-level financial advice when necessary. Additionally, there is no burden added to the payroll and no long-term commitment that hiring an employee implies.

“Businesses that partner with Michigan CFO Associates access strong operational finance and profitability analysis experience. We provide the tools and insight to manage business more effectively and more profitably,” stated Principal and Founder Todd Rammler.

Contact Michigan CFO Associates, Inc. for more information on an outsourced CFO solution for your company.