PRESIDENT'S MESSAGE

Is everybody ready to relax and have some fun?  I know I certainly am and I am looking forward to our April social meeting.  For those of you who haven't heard the news, the SBBA Board has voted that we will occasionally have surprise FREE SBBA lunches!  Yes, you read this correctly – there is such a thing as a free lunch.  No prior announcement of the free lunch dates will be made.  Roll the dice and show up at the next meeting and hey, who knows, it might be free.

March's meeting attendance was very light but those of us who did show up got a real treat!  Our speaker was Sergeant David Whittham of the Santa Barbara Police Department.  David's topic was identity theft but he also briefly spoke on fraud and embezzlement, and he was a fascinating speaker.  I have been an active member of SBBA from the beginning and I would rate David as one of the most interesting speakers we have ever had.  The speakers committee is going to ask David to speak again in a non-tax season month so don't miss the next time!  

Hope to see you all on Tuesday,

Maureen Turk
SBBA President

Register For The “Do Not Call” Telemarketers List

 For those of us who work at home and would like the telemarketers to leave us alone:

 Californians can now pre-register here for the nationwide "Do Not Call" list that the Federal Trade Commission (FTC) is expected to launch this summer. California is joining in the national "Do Not Call" registry which is FREE to consumers. Sign up for the telemarketer "no call" list at http://nocall.doj.state.ca.us/

Submitted By Wynette Winkler

“Formula for success:      Underpromise and overdeliver”
           -Tom Peters

One Members Personal Story of “How I Started And Run My Bookkeeping Service

Submitted By Michele Sullivan
Sullivan Business Services

I  started a bookkeeping business 3 years ago 1 year after I had my first child, because my employer wanted me to come back full time.  I was a bilingual/Spanish office manager.  I had an M.B.A., with experience in Banking, no bookkeeping experience and I loved all my accounting classes in graduate school.  To start a business I:

1. Figured out how much money I needed to make. 
2. Researched the market on how much independent contractors were paid for different types of bookkeeping work.  Set a rate or series of rates.
3. Figured out when I would work, how many hours per day, which days.
4. Drafted a letter, one to CPA’s and accounting professionals and the second to lay people, stating why I was going into business, what type of services I offered and the total number of hours I would work per week.  I had business cards printed.
5. Sent letters to CPA’s out of the phone directory and followed up with a call to schedule a short 5 minute meeting.  Gave out letters to everyone I knew and told them I was going into business.
6.  In the beginning I took anything that I could do or learn to do.
7. I have a CPA professional I can call with questions about bookkeeping and technical questions.  I pay her, her hourly fee. 
8. I subscribe to QuickBooks technical support.  It is especially useful when running payroll on QuickBooks.  It seems expensive $400+/year, but it is worth it.  In a pinch, it can really help you save face.

People have asked me how I select my clients after I got over the initial desperation period which lasts 1 ½ to 2 years.  I make it really clear to people WHY I am in business for myself.  I went into business so I could spend more time with my family, have more control of my schedule and keep my youngest out of daycare.  I don’t wear power suits, even though I have them. (They may have gone to the Good Will).  Even though a client suggested it, I don’t change my voice mail from a family message and the Sullivan Business Service to something strictly business, because I don’t want high-stress demanding clients who have values very different from mine, i.e. they don’t have families.  Don’t get me wrong, my clients have high-standards, some are very successful business people.   I have evolved my business to suit our family.  For instance, I don’t run payroll myself anymore.  I oversee payroll run by Paychex or ADP because we take frequent, short, family vacations.  Believe me Paychex and ADP make mistakes which need to be reviewed.  I really enjoy what I do and I really like my clients.  My business has gradually evolved to more personal, trust and small business bookkeeping clients who tend to be high net-worth.  They live and work in Montecito and we live in Summerland.  Montecito is close to us and my daughter goes to pre-school in Montecito.  It is a very convenient.  I don’t travel very much.   All my clients are family-oriented and have children although their children may be adults.    There is one more important item.  I take a class every semester to improve my bookkeeping, accounting, tax and computer knowledge and skills.  I always tell my clients I’m taking these classes so they know they’re dealing with a professional.

How to Perform a Breakeven Analysis

 Brought To You By  Brenda Richter, CPA (member of the Principa Alliance)

Finding out what sales volume you need to achieve to at least breakeven is critical to managing your business. Once you know what your variable costs and fixed costs are, finding your breakeven point is easy.

Variable costs are directly related to your sales levels in dollars or units sold. For example, materials and supplies, commissions on sales, sales incentives or bonuses for employees and shipping costs are all considered variable costs.

Fixed costs are those costs that remain the same no matter what volume of sales your business has. These include rent, insurance, licenses, wages for permanent employees, interest on loans and operational expenses.  

How to determine your breakeven point:

1. Subtract your Variable Costs per Unit from your Sales Price per Unit. This equals your Contribution Margin per Unit.

2. Divide your Contribution Margin per Unit by Sales Price per Unit. This equals your Contribution Margin Ratio.

3. Now divide your Fixed Costs by your Contribution Margin Ratio. This equals your Breakeven Sales Volume.

If this seems confusing, consider this example:  Fixed costs = $25,000, Variable costs per unit of production = .50, and Sales revenue unit of production = $1.25

From this you learn that 50 cents of every unit sold goes toward covering your variable cost per unit. Furthermore, you know that 75 cents from each unit sold can go toward covering your fixed costs.

Now if you divide your fixed costs ($25,000) by the contribution to those costs per unit (.75), you will know what level of sales you need to achieve in order to break even.

Fixed Costs/Contribution to Fixed Cost per Unit = Breakeven Point

25,000 / .75 = 33,333.33

 Understanding your breakeven point is important. But if you take your analysis one step further you can better manage your business.

 For example, you can see that a 10,000 increase in sales volume to 43,333 will yield a $7,500 profit. Likewise you can see that a 10,000 decrease in sales volume will produce a loss of $7,500.

Understanding your breakeven point is just the beginning to making the most of your financial statements. If you would like to discuss your breakeven point or would like help with implementing any of the ideas in this article, please contact Brenda Richter, CPA.  www.BrendaRichterCPA.com  

Responses To Recent E-mail Request of SBBA Members "What I strive to offer my clients/employer” 

"What I strive to do is empower my clients and employees to be superstars."
- Andy Carnaghe

 "What I strive for, in addition to competent bookkeeping/accounting, is GREAT service..........as they say "service with a smile".........gets you a long way.  Going the "extra" mile for a client (usually without charging), I feel, is part of the job............"good will" should be built into our daily lives as much as possible making US feel good as well as our client's."
- Jo Rogers

 “ What I strive to offer my clients is reliable, accurate service at a reasonable price and more.  I want to get the job done but I also want to do it with style.  I want to see what I can do to improve the quality.  This includes organizing stuff nicely, improving processes, streamlining, putting necessary controls in place, improving communication, and making it enjoyable for everyone.  For example for one client I printed the financials in a larger different font with a comparative column, and added a four year historical sales graph in color from Excel.  Go for the WOW!  
- Sandy O’Meara

 “What I strive to offer my clients is piece of mind that their bookkeeping will 
be done, on time, complete, and accurate.  They shouldn't need to remind me 
about recurring events and should be able to do whatever they do best.”
-Sue Starlin

 “I strive to offer my client everything they need from me.  Whatever makes them happy, I want to give them.  I do my bookkeeping, and keep that thought in mind”
- Francesca Zak

 “My number one focus for my clients, is ‘listen, listen, listen’.  My service is QuickBooks consulting, as opposed to bookkeeping.  I believe the best thing I can offer is to listen to not only WHAT they need, but HOW I can make it as efficient and easy as their needs & aptitude dictate.”
- Monica Dittrich

 Editor of this month’s Newsletter was Monica Dittrich.  Thank you Bonna Hamilton for proofreading this issue!  I also wish to thank all you whom submitted articles, as well as responses to my email question.  Very much appreciated! Next month’s editor will be Julie Raffety.

In keeping with Board policy and the stated purpose of the organization to provide an exchange of information and further the education of our members, the Newsletter Committee will maintain a calendar listing of educational opportunities available to members and the public.  This listing will contain information that you send in.  Please send your contributions to the Editor.