How can I get out of my C-Corporation?
The better question is should you get out of your C-Corporation. True, C-Corps get double taxed but only if they make money. If your business is a start up and will not make money for a few years and its owners do not have income to offset with losses, it may be better to continue in a C-corp. Similarly, if you contemplate taking on investors in the future, cocooning your losses in the C to afford your future investors the benefit of the losses may make sense. On the other hand, a profitable company with a small ownership group should undertake to convert to a “pass through” tax entity such as a limited liability company, S-Corp, or limited partnership. This can be accomplished a number of ways depending upon the advice of your accountants and lawyers.
For more information on C-Corporations or restructuring, contact info@bisonmgmt.com
Monday, November 24, 2008
Thursday, November 13, 2008
INVENTORY CONTROL
How do I control my inventory without hurting my customers and becoming non-competitive?
This question is as old as the first human’s efforts to improve their lives. Take pot making for example: Imagine trying to decide how many clay pots to make when you are in the dirt fashioning a pot for your own use. You start to think about the fact that you are dirty already, you are there near the source of the raw materials, and you know that the product won’t last too long. Plus you have the dilemma of limited room back at the cave but also maybe your daughter could use one. You decide to just make one more, but it is getting dark, you’re a long ways from the cave, those wild animals are out there, and its pretty scary to push the envelope on daylight with real consequences.
This scenario sounds far removed from what we face in the manufacturing environment but it really holds the secrets to how to proceed to correctly manage your inventory in the 21st century. The time, material, space, cost, need or demand issues as well as the implication are all there in front of you.
We look at inventory control as a “science” today. Its science only because we are several steps away from the actual raw material in most cases. Modern brick making being an interesting exception, but I digress.
What we do is study our historical demand and our probable needs; or rather our customers needs, and make some decisions. Those decisions are still guesses, even if they are backed by lots of data. In the most sophisticated settings we use mathematical algorithms to “forecast” demand. The larger the company the easier the forecast, notwithstanding outside influences likes the general economy and obsolescence.
You can make the “guesses” using a pencil and paper just about as easily as you can make the decision using a multi-million dollar computerized manufacturing control system. But just like the pot maker you need to know your market and get that feedback loop into your process. You define your customer’s expectations by talking to them, either directly if it’s a small company or through some sales feedback loop in a larger setting.
The “science” part is really the guessing that goes into the front end of the system. Assuming that you already have a good idea of how you make the product (a bill of materials), how good you are at making it (can you hit your standard costs?), what your customers expect (your order fill ratio for a given product or lines of product in an acceptable time), where the bottle necks in your plant are (places where the product can get hung up or where flow slows due to mismatching between input processes and processes after the bottleneck), space and physical distribution issues (does the customer walk in and take the merchandise off the shelf or do you ship the product around the globe to the customer?), well you get the idea.
If you didn’t feel like our forefather in the clay pile you do now. It sounds difficult, but by breaking up the issue it really becomes very easy to decide what to make and when to make it. If you have too much inventory you have the opportunity to reclaim important working capital for other uses in your firm, something that is always important and today is essential.
You have to get your hands dirty to do the legwork to do this but you can do it well. Large and small firms do it every day. If you want to find out more about how to make your systems work for you give us a call. We can show you how to get into the clay pile and have some great results.
How do I control my inventory without hurting my customers and becoming non-competitive?
This question is as old as the first human’s efforts to improve their lives. Take pot making for example: Imagine trying to decide how many clay pots to make when you are in the dirt fashioning a pot for your own use. You start to think about the fact that you are dirty already, you are there near the source of the raw materials, and you know that the product won’t last too long. Plus you have the dilemma of limited room back at the cave but also maybe your daughter could use one. You decide to just make one more, but it is getting dark, you’re a long ways from the cave, those wild animals are out there, and its pretty scary to push the envelope on daylight with real consequences.
This scenario sounds far removed from what we face in the manufacturing environment but it really holds the secrets to how to proceed to correctly manage your inventory in the 21st century. The time, material, space, cost, need or demand issues as well as the implication are all there in front of you.
We look at inventory control as a “science” today. Its science only because we are several steps away from the actual raw material in most cases. Modern brick making being an interesting exception, but I digress.
What we do is study our historical demand and our probable needs; or rather our customers needs, and make some decisions. Those decisions are still guesses, even if they are backed by lots of data. In the most sophisticated settings we use mathematical algorithms to “forecast” demand. The larger the company the easier the forecast, notwithstanding outside influences likes the general economy and obsolescence.
You can make the “guesses” using a pencil and paper just about as easily as you can make the decision using a multi-million dollar computerized manufacturing control system. But just like the pot maker you need to know your market and get that feedback loop into your process. You define your customer’s expectations by talking to them, either directly if it’s a small company or through some sales feedback loop in a larger setting.
The “science” part is really the guessing that goes into the front end of the system. Assuming that you already have a good idea of how you make the product (a bill of materials), how good you are at making it (can you hit your standard costs?), what your customers expect (your order fill ratio for a given product or lines of product in an acceptable time), where the bottle necks in your plant are (places where the product can get hung up or where flow slows due to mismatching between input processes and processes after the bottleneck), space and physical distribution issues (does the customer walk in and take the merchandise off the shelf or do you ship the product around the globe to the customer?), well you get the idea.
If you didn’t feel like our forefather in the clay pile you do now. It sounds difficult, but by breaking up the issue it really becomes very easy to decide what to make and when to make it. If you have too much inventory you have the opportunity to reclaim important working capital for other uses in your firm, something that is always important and today is essential.
You have to get your hands dirty to do the legwork to do this but you can do it well. Large and small firms do it every day. If you want to find out more about how to make your systems work for you give us a call. We can show you how to get into the clay pile and have some great results.
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