A few years ago, we were engaged to help clean up the accounting for a rental property portfolio that had recently been sold to Carlyle. The accounting was being done partly by an in-house "accountant" and overseas full-time accountant. Carlyle had just taken down the entire portfolio but left the GPs in place to manage it - and were not happy with the non-GAAP accounting and lumpiness in the monthly P&Ls. We rolled up our sleeves and dug-in to clean them up and eventually shared our...
14 days agoΒ β’Β 5 min read
π¨I've replaced the "News" section with some of my favorite Twitter / X posts from the last week. Enjoy!π¨ Tax structuring won't make a bad business good, but it can make a good business better. And with millions in capital flowing to SBA loans from real estate, I wanted to share some best practices to keep your post-tax cost of capital as low as possible: Partnerships > S-Corps > C-Corps Any time you're buying a business with debt (SBA ποΈ, seller notes π΄, traditional π¦), a partnership is...
21 days agoΒ β’Β 5 min read
The average business will spend 1-2% of revenue on accounting and finance. π€ That means you're at $5 - $10 million of top line before you get a dedicated accountant. But good accounting really doesn't happen until the department is 2-3 people deep - as one accountant usually ends up wearing too many hats (operations, legal, HR, etc.). So from 0-$20 million, business owners often find themselves in a no-mans land of good reporting. Which means owners need to have a good baseline of accounting...
28 days agoΒ β’Β 4 min read
56% of you are lawless degenerates π§ - opting for the "give me all the above" content on last weeks poll. But I'm here for it. It fits in with the below graphic that pretty well sums up what I'm about: my mission is to lower the cost of capital for business owners, investors, and advisors through accounting, tax, and planning. So this week, we're going to talk about a concept I've been cooking on for a little while: how to capture 80% of good tax strategies and plot them out chronologically...
about 1 month agoΒ β’Β 9 min read
An unexpected benefit of writing this newsletter for the last 6 months has been the ability to clarify what I do and for whom. The best experiences I've had are when I'm walking alongside entrepreneurs on a path to meet their personal financial goals by lowering their cost of capital - quantifiable and not. This journey usually follows three steps unique to business owners: Get better accounting Get better tax strategy Get better business forecasting I spend a majority of my time on #2, but...
about 1 month agoΒ β’Β 5 min read
Confession - this is the second newsletter I wrote this week. The first one was a wrap-up of the last few weeks talking about how business owners can turn their business finances around in three steps - accounting, tax, and cash forecasting. But it felt bland AF so I'm shelving it for now. If you want to read it, let me know. This week, what's really been on my mind is partnership allocations. π¬ Mainly because we finally hit our stride and hit a record number of partnership returns filed for...
about 2 months agoΒ β’Β 3 min read
Last week, we talked about why basic accounting is critical to small business owners - including the extreme real example of having the business valuation move by 7 figures in the wrong direction. If you missed it, check out the previous issues link at the bottom of this email. π But accounting is the boring bit. Once we feel good about our reporting, nailing down the tax strategy is the next big project. ποΈ That's because taxes are the average highest single cost over the taxpayers lifetime....
about 2 months agoΒ β’Β 6 min read
β οΈ First - welcome to the new layout of The Plug. I'm still bringing the core content but have added a section below for the latest tax and finance news & some ways I could use your help to grow the impact of this letter. As always, let me know what you think! β οΈ Confidence is everything in business. As a business owner, your team is looking to you for leadership through good times and bad. π And while you can't always predict external impacts, there are some very simple steps you can take...
2 months agoΒ β’Β 6 min read
I've been asked by a few readers to do a deep dive on "basis" - and never one to shy away from nerd-level content π€, what follows is as good as I've got. But what should be said first is that entire careers can be built on basis-specific and basis-adjacent niches. So this can't begin to touch on all the nuance and fringe cases. 𫨠But we can get to a really good grasp of what it is, isn't, and why it should matter. Let's dive in. We'll cover the below and hopefully come out better for having...
2 months agoΒ β’Β 11 min read