When it comes to making a business successful, there are no magic beans. The best way to keep from going bust, particularly in trying economic times, is to master thecounselor basics, according to Jay Sincoff, a Monroe-based CPA and volunteer SCORE .
Sincoff will outline the basics, including budgeting and cash flow, when he presents “Managing Your Business by the Numbers” on Thursday, November 6, at 8:30 a.m. at the Magyar Bank headquarters in New Brunswick. The program is the first of three in the “Managing Your Business in Today’s Economy” series, presented by the Middlesex County Regional Chamber of Commerce, in conjunction with the Greater Princeton Area SCORE chapter.
The series continues with “Writing an Effective Business Plan” by Bill Litchman on Thursday, December 4, and “Marketing and Advertising Strategies” by Alan Yarnoff on Tuesday, January 6. Registration is required for all workshops. Cost: $25 per workshop or $45 for the three-part series. Call 732-745-8090.
Sincoff’s workshop will teach participants how to read and use accounting reports, use financial information to identify problem areas, use a budget to help manage day-to-day operations, find capital, and avoid theft or embezzlement.
Sincoff, who grew up in Queens, followed in his great uncle’s footsteps and became an accountant after studying marketing and accounting at the State University of New York at Buffalo. His mother was a stenographer for the City of New York, while his father worked as an import and export manager for Hasbro Industries.
In 1985 Sincoff moved to Monroe and opened an accounting firm specializing in small-to-medium-sized businesses, internal control, financing, cash flow, bookkeeping services, tax planning and preparation, and business planning. “It’s a challenge every day,” he says. “Nothing is ever the same, and I enjoy that.”
Sincoff has been married for 30 years and has four children. His oldest daughter is an executive chef, and his other two daughters are both teachers; his son is a high-school senior who plans to study environmental science in college.
The basics. Business owners, whether established or just starting out, should understand the basics, which include cash flow, capital, credit, and budget. When used properly, they are proven moneymaking tools. “The more profitable you are, the more people want to know about you and your business,” Sincoff says. “And banks and credit card companies are more willing to help you because they know you’re going to be able to pay them back.”
However, it’s no longer feasible for businesses to rely solely on banks and credit card companies for capital. Credit lines are quickly drying up and an increasing number of business owners are using their personal savings to stay afloat. “Banks aren’t giving out loans, and if they are, you have to be profitable,” Sincoff says. “A handshake will no longer do it.”
The Asian Equation. An alternative to banks is for business owners to pool their resources and create or secure their own capital. Think of it as networking 2.0, a fairly new idea based on the business models used throughout the Indian and Asian communities.
Essentially, Sincoff says, it is a system based on “word of honor,” in which complementary businesses — say a computer consultant, a desktop publisher, and a software developer — get together and pool their money. Cross-promotions and support within the group help each player make back its investment and interest.
“It’s an idea that’s starting to grow,” Sincoff says. “It’s not a formal system; it’s totally networking, so you have to keep your ears open for it. But it’s becoming the best place to get credit. You’ve got to network your business and network your cash flow.”
Cash Flow. Maintaining a cash flow and establishing a budget are essential. “If you have $500,000, but you don’t have it in cash, what good is it? It’s what you have in the bank that matters. That’s what you need to run your business.”
When drafting a budget, he adds, “Make sure it’s realistic. You can’t just say you’re going to grow your company by 20 percent. If you’ve never grown 20 percent, how are you going to do that? You need a plan.”
Business Plans = Success. Business owners who do not take the time to create a business plan often fail. “It’s just as important knowing where you’re going as it knowing where you came from,” he says. “With a business plan, you’ve created a road map for the future.”
Business plans build on the basics and typically include proposed budgets, profit goals, monthly or annual targets, expenses and a mission statement. “With a business plan, you’re saying ‘I refuse to participate in the recession.’ You’re already moving forward because you have a plan,” Sincoff says.
“It helps you look at all the angles,” he continues. “It helps you know your audience, your price points and margins. And it gives you a better understanding of how you’ll cover expenses and increase your cash flow.”
Tools of the Trade. Sincoff, who often discusses the tools necessary to maintain success, says business owners should invest in computerized programs, such as QuickBooks or Peachtree Accounting Software. Computerized programs are essential, he says, because they help business owners formulate accounting reports that, even in their most basic form, detail profits and losses. The programs also give business owners the ability to update and distribute documents electronically, saving both time and money.
“The bottom line is these programs can help you figure out your cash flow,” he says. “You might think business is good because you made a $100,000 profit, but you also might have spent $200,000 without ever realizing it because you didn’t have it on a balance sheet.”
However, he admits, programs like QuickBooks can be intimidating, especially for business owners with no computer skills or those who are accustomed to writing documents by hand.
“To get the most out of it, it can be complicated,” says Sincoff, a certified QuickBooks Pro advisor. “If you want to use it right, you are going to need an expert who knows QuickBooks. But if you just want to look at your profits and losses, it can be done simply.”