?
Veterans Day, Loan, borrow, holiday

Posts Tagged ‘Generally accepted accounting principles’

The End of the First Quarter

Well, the end of the first quarter for the new business happened recently, and I finally got some numbers together to look at the results.  In fact, the bank representative emailed me yesterday in order to file a report on the new ownership, so it was easy to just send him the spreadsheet.  Hopefully, the bank is pleased.  Bills are getting paid and payroll is being met at the same time that debt is being eliminated so it should all be good.  February was a bit lean, but weather was terrible in January and February.  The business was actually totally shut down for 3 days, and we still managed to come out reasonably unscathed.

Comparison to 2013

I won’t share detailed numbers, but I know the sales from last year and divided by 4 to come up with a quarterly average.  When I compare to the net receipts after taking out sales taxes, I find that the current number was up by 7%!  And that is without anyone doing full time sales.  The business had tried to get lean in order to survive and only had 3 workers down from 5 at one point.  We have talked about bringing on a 4th part-time in order to get someone out to do more sales and customer interaction.  That will probably happen this quarter.

ProForma

I think one of the issues with the prior management was lack of attention to detail when it came to finances.  Looking over the books, I got the sense that there was lack of awareness as to the actual expenses of the business.  I got an initial proforma from the prior owner, but went to look back at the past 3 years’ tax returns in order to come up with my own numbers and make some modifications.  There have only been a few surprises when comparing expected vs. actual performance.

First, the amount spent on telephone has been double.  It could be because we added another cell phone so my wife could have a dedicated business phone since she has been doing a staggering amount of work during these first 3 months to keep things heading in the right direction.

The other surprise has been the expense for health insurance.  The prior insurance company pulled out of the market due to ObamaCare and the new policies with a different company ended up being about 30% more expensive for a similar plan but with slightly less favorable deductibles.  That is one reason that the next employee will be part-time.  No way I want to pay another 25% increase to the benefit column at this time.

Slight Profit

The good news is that at the end of the quarter, we were able to show a slight profit after paying all expenses.  Hopefully, as spring and summer arrive we will be able to continue the current pace or even grow a bit more.

 

 

 

Enhanced by Zemanta
Related Posts Plugin for WordPress, Blogger...
Shop Amazon Here

Be the first to comment - What do you think?  Posted by Cash Flow Mantra - April 9, 2014 at 10:05 am

Categories: Investing   Tags: , , , ,

Enter your email address:

Delivered by FeedBurner