Date: March 24, 2023
Overview
A New Jersey based Woman Owned marketing firm had aspirations to achieve growth, so that they could crush their debt, and set aside a nest egg. With over 20 years’ experience in the industry, the owner had happy clients but lacked the financial expertise to clearly see missed tax opportunities (like most business owners do).
Challenge
Even though the firm had a bookkeeper that handled their monthly bookkeeping, and a CPA that filed their taxes, they lacked a business and tax strategist to guide them in growing their business and help ensure they were utilizing the tax savings provisions available (yet hidden by complicated tax code). With these new savings they wanted to expand their team, pay off debt, and upgrade their lifestyle. The problem was that they had to continually borrow from their nest egg until they came to CP&A. This happens all the time – it is important to be aware of the fact that although you may have a bookkeeper and a CPA or tax professional that likely are doing a good job, unless you have specifically discussed tax planning strategies, you are more than likely overpaying on your tax bill! There was concern at first in coming up with the payment, but she decided to take a leap of faith and give it a shot.
Taking Action
This is where Vanessa Correa comes in – a true tax wizard! The client reached out to CP&A, and Vanessa was able to research the client’s needs and take a deeper look at their tax liability and potential areas of savings. After determining that the business owner’s legal business structure was incorrect and there were tons of missed opportunities, CP&A dug in to get the client back on the right track. After compiling a tax plan for the client with just 6 core strategies, how they worked, where they could be found in the tax code, and how much it would save the client. What Vanessa found ended up saving the client $67,280 in the first year and $94,070 in the second year! Every year going forward the client is positioned to save nearly six figures in tax that can now be reinvested into her retirement, business, and home.
Results
By implementing legal, transparent strategies custom fit to the client’s specific needs, the client was able to save over $161,000 within the first 24 months of working together. How is that for a nest egg?! Not to mention the savings she will have year after year thanks to her tax plan. In just the first two years of working together the client was able to pay off their $75,000 HELOC and expand their operations to a second physical location. Not only did CP&A cover the cost of their fees in the first year, but the client received a 3:1 ROI the first year and the second year was pure profit.
The business owner was able to pay off her debt and start taking her business in a whole new direction that nearly doubled her business within 15 months. Many business owners think that tax planning may be a bit too spendy for them up front, but as you can see it is not counterintuitive to spend the money because you end up not only saving initially but it is savings year after year! In the end, our work helped the client get ahead in business and in life at a level she never knew was possible – they are now debt free and have already surpassed last year’s annual revenue and it’s only the end of 1st quarter!!
When you invest in yourself and your business, the dividends will repay you for a lifetime.