"How is my business doing compared to others?"

November 28, 2006
I receive this question from my clients on a regular basis. The survey below compares a sample of my clients in the southern United States using 2006 vs 2005 data.

.................................Percent of Sales..Variance from last year
Sales................................100.0%..................+10.2%
Cost of goods sold...............50.5%..................+10.8%
................................=============================
......Gross Profit....................49.5%..................+09.6%
Administrative Expenses
...Advertising..........................1.0......................+16.2
...Auto Expense..................1.3...................... +37.6
...Bank Charges......................0.4......................+41.7
...Contributions......................0.2.......................-23.6
...Dues & Subscriptions.........0.1.......................-30.1
...Insurance............................2.0.......................+12.6
...Office Supplies.....................1.2......................+01.1
...Outside Services............3.1...................... +66.8
...Professional Fees.................0.6......................+13.7
...Rent-Lease Payments..2.6..................... +26.3
...Repairs & Maintenance.......0.4.....................-05.8
...Salaries & Wages.................21.0....................+14.9
...Taxes & Licenses..................0.7.....................-13.0
...Telephone..............................0.8.....................+17.3
...Travel & Entertainment.....0.0......................-54.0
...Uniforms................................0.2.....................+05.1
...Utilities...................................0.7.....................-04.0
...Other - Miscellaneous..........0.2..................+302.6
................................=============================
.....Total Administrative........36.4%..................+17.7%
................................=============================
Net Income..........................13.1%................... -07.9%

The survey does not take into account depreciation and interest expense. Sales are up, but Administrative expenses are way up from last year. Notice a large increase in auto expense and outside services even rent and lease payments, causing actual profits to go down. Photo above taken this past spring, with my wife and I, on our 24 foot Sea Ray Sundeck. Henry (CEO)

"As a business owner, can I collect Social Security at age 62?"

November 10, 2006
Before you decide to take early retirement at age 62, please do research on the rules. As an owner of my own business just like yourself, the Social Security Administration will look at us very differently compared to our employees who want to retire.
In my opinion:
..1) You should NOT be an officer some 6 months prior to retiring.
..2) The new officers should NOT be related to yourself.
..3) If you want to work part-time after retiring, it should be a lot less than 45 hours per MONTH
..4) You should NOT collect any rent or dividends from the company nor your spouse.
..5) Do not receive any additional retained earnings while retired.
..6) And according to my congressman's assistant, your cell phone and home phone should either have NO voice mail or at least make NO reference to your business.
These are tough rules if you want to retire early. We just got back from our recent Caribbean cruise. See photo above. Henry (CEO)