Interview with Tim Seivers

Good morning and happy Friday!  It is going to be an awesome day and we get to enjoy Brendan and David this weekend!

Earlier this week I had the opportunity to meet with Tim Seivers with Floyd Watkins & Associates.  Floyd Watkins operates out of Vancouver Washington and specializes in business and personal insurance.  My relationship with Tim goes back several years working with clients jointly on business and key person insurance.

Tim is a very easy professional to work with as he does not try to dazzle clients with “insurance-eze”.  He speaks their language and always looks out for the best interest of the small business owner.  Don’t get me wrong, he cares about the employees as well, but he is primarily driven to help protect the business owner and the value of the business.

This includes not only insurance products but retirement plans which are focused on the business owner.  One of the things I appreciate most about working with Tim is his use of the “Grocery Bag of Savings.”  It is worth contacting him to find out more about how he helps your employees deal with savings for retirement!

I asked Tim what three things he would like a reader to take away from our conversation.

  1. Floyd Watkins carries more than one plan.  When asked to explain he pointed out that he can offer many different types of insurance plans, not just Kaiser or Blue Cross.  His team can craft a compliant plan that maximizes the benefits to the owner and key employees while also offering fair coverage to all the employees.  He pointed out that one of our mutual clients from a few years ago has a policy which cut health insurance in half and provides much greater benefits to the key employees.  This plan was designed to address the fact that most of the employee base was under 30 and unmarried while the management team was over 45 and had dependents.  The plan was designed so that the Company picked up the first $1,000 of medical expenses; and since the younger employees didn’t go to the Doctor, the Company saved huge.  Plus, this policy actually refunded premiums if claims were below the threshold.
  2. Business owners need to plan their exit strategy or face a fire sale.  Tim told the story about a partnership he was working on recently.  The partners were debating if they needed a $1.0 Million or $3.0 Million policy on each partner.  This went on for over six months.  About two weeks before they were to meet with Tim, one of the partners called to say he was diagnosed with lung cancer.  This partner passed away 2 months later and not only did his family receive no value from the business, they actually had to repay money to the partnership because he had personally guaranted loans. This risk can be reduced by using appropriate types of insurance.  He stresses that the paperwork to suport a buy/sell agreement is important but that it isn’t worth anything without the means to pay for it.  Let’s face it, most businesses are worth far more than the cash they have on hand so anything you can do to ensure you protect your family and your business is worth considering.
  3. People should consider this “Money at a discount”, not life insurance.  Let’s face it, you are not going to get the benefit of any of this insurance (in most cases – although Tim knows of products which can allow you to access some portion of the insurance while you live) in the event a pay-out is required.  So he suggests thinking about this as paying money out today for a payment of money in the future. By asking yourself, “How do I make sure that my family has what it needs to go on without me and what is that investment today?” This is especially true for small business owners who potentially put their family at huge risk if something should happen. Investing a stream of cash payments today to receive some greater future benefit to protect them may be worth it.

Finally, Tim wants everyone to know that he likes being the Second Opinion Professional.  He strongly encourages you to have this discussion with your business insurance professional and then he encourages you to have a conversation with him.  The consultation is free and there is no obligation but it will give you peace of mind in knowing that your current plan recommendation is meeting your needs now and in the future.

You can find out more about Tim Seivers and Floyd Watkins & Associates here.  I strongly encourage you to think about getting a second opinion on your benefits and protection and think Tim is the right person in the Clark County area to talk with.  Thank you Tim for the time and great information.

Have a great Fourth of July Weekend everyone.

Taking Credit Card Payment

Good morning.

It is still a little early and I am supposed to keep this is secret from Brendan, but today he is receiving the President’s Education Award.  And on top of that, this is officially his last week of the 5th grade and is moving onto middle school next school year.  I am extremely proud of Brendan for his accomplishments at school and at home as he is just a super-awesome young man to hang around with.  Congratulations Brendan, I love you!

I have updated this post for a picture of Brendan after receiving his award.  He also received recognition for his hard work in band and in their Pride Group.  You are awesome Brendan!

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Small Business and Selling on Terms

One of the more challenging choices a growing small business faces is how and when to sell on terms.  The fact is, the simplest way to run your business is on cash – that is, getting paid with cash or possibly a check when you do something or sell something.  Any other sale is on terms; this includes taking credit cards (as I will explain in a moment).

The closer you are to selling to the end-using person, Business-to-Consumer (B2c) sales, the closer you can get to collecting cash on delivery.  There are 2 key parts to a  cash-based B2C transaction – 1) relatively low unit price and 2) ability to take ownership of the goods/service at the time of sale.  If you are a Food Truck in a downtown area, I would encourage you to stick to a “Cash Only” policy.

“What about accepting credit cards?”, you ask.  “Isn’t that the same as cash?”

No, accepting credit cards is not the same as cash, no matter how much the credit card industry wants you to believe otherwise.  But it can be very beneficial to your small business to accept credit cards from customers.  Now, I am going to apologize because this might get a little confusing but bear with me.

When someone wants to buy from you but doesn’t have the right amount of money on-hand, they have to ask to pay for it later. (Think Whimpy from Popeye’s cartoons where – he will gladly pay you Tuesday for a hamburger today) You are taking them on faith that the payment will be coming when they promised.

From an accounting standpoint, you have created an Account Receivable (A/R) from Whimpy.  The sale of the burger happens today and you collect Tuesday (unfortunately you never seem to sell on a Tuesday so you can collect same day).  Now, the sooner you collect that A/R, the better your cash flow will be.  But what to do when you have other bills to pay and the money won’t be in for some period of time?

You Sell your Receivable

A few years ago, there was a very large industry which specialized in buying – or loaning against – A/R.  This is known as factoring.  These company’s would give you money for your A/R and then collect the face value from the Customer.  You would receive a little less than face value but you had cash today to pay your bills.

This is exactly how taking credit card payments works.  Let’s walk through the Whimpy hamburger sale.

Whimpy buys $50.00 worth of hamburgers a week.  He always pays on Tuesday for the hamburgers bought Wednesday to Sunday.  You still have other bills to pay, so you are wondering what you can do about this.

  • Does it make sense to deny Whimpy his $50.00 of hamburgers if he can’t pay for them daily?  That could be a good percentage of your weekly sales so that might not be a great idea.
  • If you could find someone willing to give you $45.00 every Friday who would then collect the $50.00 from Whimpy on Tuesday, would this help your cash flow?
  • Or, if Whimpy has a credit card, he can buy his $7.00 hamburger every day and we can pay the Credit Card Company $0.25 per transaction (hamburger) and they can worry about collecting from Whimpy on their terms.  Over the course of a week, your this $50.00 of sales costs you $1.75 so you actually net $48.25.  Would this be even more helpful to your cash flow?

For today’s small business selling B2C, selling on Credit Card terms can offer a substantial boost to revenues and profits.  The truth is, most people are not running around with lots of cash in their pockets so your ability to sell to them can be limited on a cash-only basis.  Accepting their ability to essentially “Pay you tomorrow for the hamburger today” may beat “Sorry I would buy from you but I don’t have any cash”.

Now, I am not suggesting that the fees charged by credit card companies are fair or reasonable, or even that they are not as it depends on what you want and need. I honestly believe though, your first consideration as a small business owner is what you can do to increase sales.  Offering a new term to current and potential customers might be an easy solution to get you access to new business.  But remember there is a cost.

Every credit card offered has different fees they charge a merchant and it can be confusing.  You will need to have a conversation with several different merchant services providers and even your bank.  It might also be helpful to bring your accounting professional into that conversation so you get an unbiased, independent evaluation of your credit card acceptance options.  If you do not have an accounting professional or would like a second opinion, contact us at Currie & McLain and we would be happy to have a free no obligation conversation with you about your business and if offering to accept credit cards (or other terms) is right for you.

Have a great Tuesday.

Crestline Culture Fair

Good morning.

A short post this fine day as I have a meeting coming up in a little bit.  I wanted to share about last night’s adventure at Crestline Elementary for David’s Third Grade Culture Fair.

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My fine young gentleman chose to honor his Mexican culture for the event.  When I interviewed him for this post, he was absolutely thrilled I was going to be blogging about him and his work.

He had to do all his own research about Mexico.  When asked how he started his research, he replied, “Grandma”.  Smart kid.

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He even hand-sketched the National Flag of Mexico.

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Kubae enjoyed the food court where she sampled Churros, Pan Dulce (this was David’s potluck dish), and Crimean candy.  We asked David how we came up with the idea for Pan Dulce and his reply, “Grandma.”  I know it is hard to tell in this picture but I caught him just beginning to laugh as he answered this question.  He still has to work on his poker face.

I am proud of David’s work and of course the hard work all the kids put into their culture boards and the foods provided by the families.  Congratulations to David and all the 3rd Graders of Crestline Elementary!