{"id":61447,"date":"2019-05-27t12:00:43","date_gmt":"2019-05-27t16:00:43","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=61447"},"modified":"2019-05-27t13:16:42","modified_gmt":"2019-05-27t17:16:42","slug":"saving-a-business","status":"publish","type":"post","link":"\/\/www.g005e.com\/2019\/05\/27\/saving-a-business\/","title":{"rendered":"how i saved a business"},"content":{"rendered":"
<\/a>a step-by-step breakdown. by ed mendlowitz<\/i> saving a business creates one of the greatest highs you can have in accounting.<\/p>\n more:<\/b> start with the cash<\/a> | secret success formula: e=fs4uh<\/a> | becoming an expert in irs collections<\/a> | high cpa fees should be a client\u2019s goal<\/a> | how hidden bias taints results<\/a> i remember one instance when i received a referral for a business in another state requiring a plane trip. the situation was quite simple. the irs was going to close up her business, and the owner wanted to be able to walk away without the business, broke and without her house, but also without a continuing debt for unpaid payroll taxes. so it seemed i had one purpose \u2013 to get the irs to apply what they would receive against the personal liability. note: i told an earlier story of the first time i ever did this, so now i was an \u201cexpert.\u201d<\/p>\n before the trip, i had asked the owner to send me monthly financial statements for the last five years that one of my staff people had entered on a spreadsheet. a quick review showed me that the percentages for monthly purchases to sales for every three consecutive months were right on the button.<\/p>\n however, the inventory increased every month on the financial statements that the business presented to the bank. that made no sense, so i ignored the inventory. i also did a quick break-even analysis and saw that the business had very large margins, with too much nonessential overhead and not enough sales. i pretty much formulated a plan before i ever got on the plane.<\/p>\n this was one of my most interesting days ever. the plane arrived at 10:15. i was picked up, driven to the client\u2019s factory, and after some small introductions i was ready to work at 10:45. i asked to go for a tour of the premises and factory. this took about an hour. at 11:45, just as the walkthrough ended, the client\u2019s attorneys arrived to meet me and find out what my strategy was going to be. i mentioned that since they had never seen the factory, perhaps \u201cwe\u201d (i now being part of the business owner\u2019s group) should give them a brief tour. at 12:15 we all sat down, and as often happens, the lawyers and i were bragging about how great we were and not much was said about the client.<\/p>\n the lawyers then wanted me to explain in detail how i was going to accomplish the job. keep in mind that i was talking to people who weren\u2019t able (along with the client\u2019s accountant) to get to first base with the irs revenue officer, but they were going to \u201cevaluate\u201d me. things don\u2019t work that way with me. i wanted to find out the extent of the problem, what the client was willing to settle for as a successful resolution, and i needed to ask the questions that would provide me with the ammunition i needed to speak with the irs. at 12:45 we ran out of time because the lawyers had to leave. the client then gave me a room i could work in, but i said, \u201cit looks like lunch time. let\u2019s go to lunch with you and the controller,\u201d which we did.<\/p>\n we got back at 2:30, and i said i needed 45 minutes alone and would meet with them at 3:15 for 45 minutes and then would need to be driven back to the airport for my flight home.<\/p>\n when we met i presented a plan to save the company, but said it would only work if they got more sales. i then told the owner that she had to devote herself fully to getting more sales. she had to stay out of the office or factory. i said nothing else should change. if she got the sales, we could then make changes to cut costs, but if she did not get the sales, nothing else mattered because she would be out of business. i also told the controller to set up a meeting with the irs for the following tuesday at 11:00 (i was there on a thursday).<\/p>\n when i met with the irs revenue officer, i presented a plan in which the company would continue in business, with the irs getting all \u201cexcess\u201d cash flow until the taxes were paid in full, and that i would want the excess cash flow applied first to the past-due trust fund portion. a condition i set was that the current withholding taxes would be paid weekly on the payroll payment date, either to him or through the federal tax deposit system.<\/p>\n i showed him all the details of my plan. i asked for a month to put my plan in effect to \u201csave\u201d the company, which he gave me. we agreed that the weekly tax payments would start immediately and that i would meet with him in a month. we would decide together if the plan would work and should be put into effect, or if he would proceed to collect the past-due taxes in full. i was there for two and a half hours. i then met with the owner, controller and their attorneys for a (very late) lunch, where i laid out my plan and assigned everyone a role.<\/p>\n the final result was that the business was saved.<\/p>\n","protected":false},"excerpt":{"rendered":"
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\nin those days a one-hour plane ride really only took one hour, and you could get to the gate only a few minutes before takeoff. before the trip, i had already spoken to the business owner, quoted my daily fee to take a look-see and told her i would propose a method if i thought i could help her.<\/p>\n