There were lots of great questions today as the Dallas Executives Association members took advantage of the professional knowledge in the DEA! It was a lot of fun, and we ran out of time before we ran out of questions! Here is a summary of today’s answers:
Andy Montgomery, Murphy Business & Financial Corporation: What makes a company’s cash-flow work for the sale of the company? Buyer’s justification: after accounting for paying off a loan, owner’s salary, and capital reinvestment, then having enough leftover to have a decent return on their original down-payment.
Jack van Wunnik, Thomas O. Bailey, CPA, What should we know about the IRS? If you get a notice from them, acknowledge it, but talk to a professional, like Tom Bailey’s office, and let them answer the IRS; people tend to be too helpful in their answers and that is the worst thing to do.
Denise Koval, Art That Grows, When should we use weed & feed? If you want to use it, know what kind of grass you have so you don’t kill you grass. For mixed grasses, it is better to use organic fertilizers in March, May, July and September if your lawn needs help or just twice a year if it is strong. Can you follow the city water restrictions and keep a good lawn? Watering 2 times a weeks is good. As the temperatures creep up, increase the time you water, even watering 2 or 3 times on the allowed watering days to avoid runoff.
Andy Montgomery, Murphy Business & Financial Corporation: What are the top 3 things I should consider if I’ve decided to sell my business? 1) What are you going to do after that? You need to know what you’re going to do when you get up in the morning and buyers want to know why you’re selling this “great” business; 2) Get financials cleaned up. To get all personal finances out of it may take 2-3 years; if you can’t do that, you limit your buyer pool; 3) Get a management team in place so the business is not so owner-dependent.
Jack van Wunnik, Thomas O. Bailey, CPA, What is the tax exemption limit for the proceeds on the sale of a primary residence? You must have lived in the residence 2 out of the last 5 years and then the limit for an exemption (for each sale) is $250,000 for an individual and $500,000 for a couple.
Mike Moore, Moore Insurance Agency, Explain why someone would want a higher deductible on homeowners insurance? Set your deductible according to your risk tolerance. It is typically 1%; go with a higher deductible if cash reserves allow it. For residences, typically a 1 to 10 payback: save $100 and accept $1,000 higher deductible. For autos, typically a 1 to 7 payback: if 7 years without an accident, better to use the higher deductible.
Ron Schulz, Supreme Lending, Should you go with a fixed or variable interest rate? It depends on where rates are. If rates are high, variable rates make sense. An ARM only makes sense in low rates if you know you will not be there when the ARM explodes; otherwise, you will end up refinancing.
Bobby Cave, Take Time To Travel, What hidden travel gems are out there? Europe is a very good deal since the US dollar and Euro are so close and airfare is not too expensive; especially non-summer. Some great spots are Croatia and Norway. Anywhere in the US is good, like Arizona; consider the Grand Canyon train. In warm-weather climates, Mexico is a good deal because airfare is low. There are sales for trips to Europe, but don’t wait until the last minute. River cruises are a good deal considering what you get; some companies are getting smaller cruise ships that can go more places. Spur-of-the moment trips: do those happen? Good deals sometimes still exist, but usually last-minute airfare will make up for what you saved. Usually it is better if you plan ahead. If you are flexible on departure dates, that helps, too.
Randy Herman, Cornerstone Chem-Dry, Is there hope for getting red wine out of white carpet? Cornerstone has specific products to extract it and then a catalyst to reduce the color, and can make it so it is invisible to the eye. People who try to fix that themselves, generally wind up with a mess.
Kevin Taylor Merrill Lynch Global Wealth Management, We’ve had a nice run on the stock market; when will it correct and what will be the catalyst? He spends a lot of time talking people off the ledge. Take the emotion and politics out of it! The last 60 days have not been volatile. Consider what you are trying to accomplish and the time-frame. Continue with a dollar-cost-averaging approach and keep investing. Rates probably won’t go up enough to make a difference this year. The amount you save and what you do will make the most difference.
Dr. Paul Chafetz, Psychologist, Many of my clients are men, 50-65 who are out of work and depressed; where would they go to find their next gig? Mark McDaniel, Remarkable Affairs Catering, many churches or synagogues have different gatherings and support groups or check with a staffing company. David Ballard, Onin Staffing, go to a staffing company and get into a position on a temp-to-hire basis, which allows them to show their worth. Chris Clausen, CNC Home Care, Veterans looking for work should look into Roger Staubach’s Allies in Service, which helps veterans find employment, as well as the Military Institute that President Bush has in Dallas.
Barbara Scribner, Keller Williams, What is the hottest home trend? To increase homes value, people like smart homes; they want to control things from outside and entertain. Keith Brown, with Audio Video Innovations can help with this. They also want homes that are completely done. People with vision who will take a home that needs some TLC will have a lot less competition when buying. Julie Grant with Julie Grant Interiors can help make it beautiful after you buy it. What are hot spots to get more house for your money? Merriman Park and houses in beautiful treed areas. What is the hottest area where everyone is moving? Frisco, which is now the $6 billion mile with lots of jobs and opportunity.
Jennifer Blakeney, Guaranteed Express Courier Service, Do you expect drones to have a large role in the courier business? Amazon has trickled into the courier industry with drones. It is complex with flying and other restrictions. Drones won’t impact much beyond small items.
Thanks to everyone for the great questions and answers! If you didn’t get to ask your questions, either ask the DEA member, or wait to share them at the next “Ask the Pro’s”!