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A Different Kind of Black Friday Savings

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Last week marked the celebration of our most uniquely American holiday. No, silly, we're not talking about Thanksgiving. We're talking about Black Friday, our national homage to consumerism, conspicuous consumption, and all things capitalist. Walmart and other "big box" retailers pounded a final nail in Thanksgiving's coffin, opening at 8PM that night so shoppers could skip out on the pumpkin pie to save a couple hundred bucks on a flat-screen TV.

And this year, Walmart founder Sam Walton's heirs, who still own 48% of the company, have taken a lesson from their own shoppers. Only, the Waltons aren't just saving hundreds. They've found a way to save millions, just by accelerating a regularly-scheduled dividend payment from January 2 to December 27. (Apparently, they think "everyday low prices" applies to their tax bills, too!)

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Keeping Your Business On The Right Track

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A business plan is a roadmap that sets out your route for the development of your business. It doesn’t tell you just about the current state of the business, its strengths and its weaknesses, it will also show up the opportunities and what needs to be done to stay ahead of the competition.

You might think you know all this now and don’t have to write it down. But what if something happened to you and someone else had to take over the operation? What would they need to know so it was still there and profitable when you returned? This is the kind of information contained in your business plan and its good insurance against the unknown.

It clarifies your objectives

What are your goals? These will be in your business plan, the original goals you had plus any additional objectives that arise in the course of business. Your business plan spells out the goals and shows the milestones along the way that tell you how close you are to achieving them. Goals are flexible and can be as varied as achieving a certain level of turnover or simply acquiring new customers. It’s important, however, that each is presented in the same way – as a target with milestones or indicators that will let you measure how near you are to achieving it.

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Final Expiration Date?

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The history of American business is littered with companies that crash and burn. Sometimes they fly so high they attract attention from antitrust regulators. That's what happened with John D. Rockefeller's Standard Oil, which grew so big that a federal judge ordered it broken into pieces. Sometimes poor management or fraud are the culprit, like when energy giant Enron imploded. And sometimes technology overtakes a company, like when Henry Ford put the buggy whip manufacturers out of business.

Last week, another corporate stalwart threw in the towel. You've heard the sad news. Hostess Brands — maker of Wonder Bread, Ding Dongs, Ho Ho's, Sno Balls, and the pop-culture icon Twinkies — filed for bankruptcy in January. But last week, citing a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, the company announced they would wind down their operations and liquidate their assets. The move leaves over 18,000 Americans jobless just as holiday baking season moves into high gear.

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Jedi Tax Planning

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I have no idea how the evil Empire collected taxes a long time ago, in a galaxy far, far away. (I suspect that R2D2 kept awesome records in case he was audited; Darth Vader hid his money on Endor, a forest moon bearing a striking resemblance to the Cayman Islands; and Chewbacca never bothered to file at all.) But here in the U.S., gains from the sale of a business are treated as capital gains and subject to tax up to 15%. Lucas is taking half of his proceeds in Disney stock, so that part escapes tax for now. (He'll pay if he sells those Disney shares sometime down the road.) But that still leaves up to $2 billion in fully taxable cash gains. And that means up to $300 million in tax for Uncle Sam.

At least, that's how it works this year. On January 1, the Empire strikes back, when those Bush-era rates expire. Unless Washington gives us a new hope, that capital gains rate jumps to 20%. President Obama has said he wants to extend the current rates for income under $200,000 ($250,000 for joint filers), and the Senate has passed a bill to do just that. But if the 20% Clinton capital gains rate returns, at least for guys in Lucas's bracket, selling in 2013 could have cost him up to $100 million more in immediate tax. That's at least enough to recondition a Millenium Falcon or two!

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Are You On Top Of Your Competitors?

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Here’s a list of questions that every business manager should be able to answer with an unqualified "yes." They relate largely to the fundamental need of identifying and understanding your competition, and if you find yourself giving a "no" answer to any of them it means you could be short of valuable information that would provide you with a competitive advantage.

  • Do you know who your competitors are? Do you know where they are and how big they are? Would you be aware if any new competitors entered your market?
  • Do you regularly monitor your competitors’ advertising and promotions by looking for their advertisements, visiting their premises and looking at their websites?

Tax Relief for "Superstorm" Sandy

Hurricane Sandy roared ashore last week, interrupting our regularly scheduled election already in progress. And yes, I'll be addressing election results shortly, especially as we get more guidance on what to expect for your taxes. But I’m impressed, as always, with how a natural disaster brings out the best in Americans, and I’m pleased to see both Democrats and Republicans joining together to help those most affected by the storm.

The IRS gives generous tax deductions to help make our own generous charitable gifts go further. So this week I’m writing to help you make the most of efforts you might make to support storm victims — or any other year-end charitable gifts.