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On time taxes, no audits, clean books, and a financial plan that hits the mark. Profit Solutions gave all of this to me. So I recommend them to any business owner out there trying to get their books in place.
This owner-operator came to us after a 2-year build out of their shop. The owner used their 401(k) savings to open and build the shop in an urban area and was trying to make not an ordinary laundromat but a laundromat that was a destination for the neighborhood and hoped to franchise it. So they have bigger dreams on how to go forward with this business. The owner needed to sort out what exactly was his capital investment, who and how much the business borrowed funds from, and then how to untangle their personal accounts from the business. This happens quite often with new businesses where you’re trying to start a new business and you put your own money in it and you don’t realize that you’re actually paying bills from your personal account and things like that.
So we had to untangle all these items for this client. Then we also used the model to show them exactly what they’re expenses were and their overhead should be. We used the model extensively with this client to really get them to understand what their fulfillment costs were versus their overhead and that they really needed to bring down quite a bit of that fulfillment costs and get it in line or at least closer to what we have as rules.
By following this procedure and re-allocating some of their resources from overhead and operating expenses, and some lead generation. They actually wind up in creating a profitable within a year, actually about 18 months, but in that first year with Profit Solutions, which included the obstacles of Covid and having to shut down any in-shop customers, so they cannot come in to their shops, so we talked to them about having an outdoor receiving area so that they can drop off their laundry and still have that experience that they were trying to create and they got a buzz in their neighborhood and still continue to grow as we speak.
So Case study 2 has been continuing to reduce their expenses. They had some very heavy leasing contracts that they renegotiated now at this point and they are still going steady and going strong.
Case Study 1 is an owner-operator of seven 24-hour franchise convenience store gas stations. This client came to us as a new business owner who had not filed taxes for the first 2 years of business. They were unsure of how to set up their books or how to proceed. They were afraid of getting bad advice and making costly mistakes. Not only that but they were terrified of losing their investment, which was their life savings, so there was a lot on the line. To their credit, this owner-operator knew how to effectively run each store, even through Covid restrictions and incredibly difficult labor issues that continue through today.
Profit Solutions took the burden of the fear of not knowing off their plate by walking them through how to set up a good book according to the Generally Accepted Accounting Principles (GAAP), and creating a model that showed them just how and what percentage of their monthly revenue they should be using each month against their fulfillment cost, operating costs, lead generation cost, and how to prepare for things like taxes.
We caught them up on their tax filings and have gone further in planning their business and personal tax implications each and every quarter. This allowed the owner to take the time away from focusing and worrying about that and really focusing on their labor issues, on their low performing stores and what to do with them and to make some serious decisions regarding any kind of drain on their revenue but above all to give them peace of mind so that they can start planning for their retirement in the next 5 to 10 years.
This client is now a very confident owner-operator in both the ownership role and the operator role. So much so that the franchise has been recognized and rewarded as top producers in their region and in the United States.
Profit Solutions was very successful in coaching this owner-operator and creating a long-term client that is going to continue being successful by having the means necessary to make informed decisions on how to maximize using the resources.
This owner-operator came to us with a not uncommon situation of not having filed taxes for some time. And by not filing taxes on the business, it parlaid them into not filing taxes personally.
Each year that passed that had not been addressed for this reason had put each year of a burden on that owner-operator’s head. It was at the point of them being concerned with not only the cost of not filing and penalties of not filing, but really about “Am I gonna lose my house? Am I going to lose my family? Am I going to jail?” This owner-operator was terrified.
Each year that passed that had not been addressed for this reason had put each year of a burden on that owner-operator’s head. It was at the point of them being concerned with not only the cost of not filing and penalties of not filing, but really about “Am I gonna lose my house? Am I going to lose my family? Am I going to jail?” This owner-operator was terrified.
The thing about this operator that was amazing is that they allowed Profit Solutions to come in and slowly walk through each step of how to address this back tax issue. With the help of our tax professional, we were able to create a plan, we were able to go back in time and create a book as necessary to prepare to file for the business and for the personal. Every step closer to the filing this owner became more and more strengthened and more and more relieved. And when we finally did file the taxes and created a plan of payment with the government, that has now been accepted, this owner-operator now has become much more focused on the business, focused on his life, and focused on going forward.
The burden of the back tax issue was crushing this owner-operator, and unfortunately at that time, he had a very good business going, so that was actually in his favor, but he was not taking advantage of it because he was so hard-pressed about how to resolve the tax issue. That’s all he could think of every day when he woke up was “How do I get off of this?”
When we met this owner-operator, aside from letting him know that there would be someone with him as he went through the process, we also were able to use the model to show them how to use what they have, which is a very good business. We were able to identify some re-allocations of resources towards fulfillment. We were able to identify what fulfillment actually meant for this client. And that business is thriving now and will continue to thrive if they don’t sell it because now it has become very attractive to buyers.
So this client’s success story has made a long-term client for Profit Solutions. More importantly though, I think we relieved pressure from the owner-operator so not only could he focus on the business, he could now focus on his family and enjoy life overall. So Profit Solutions really did help these people get back on their feet.
