Master Your Financial Future: Strategic Planning for 2025!

Part two with CPA, Brian Werner. We go quarter by quarter to structure your year for maximum success. This podcast episode focuses on the critical aspects of budget planning for business success. We discuss setting up a budget, assessing it throughout the year, evaluating investments, and year-end tax strategies.

• Importance of establishing a budget in the first quarter
• Reassessing and adjusting the budget in the second quarter
• Evaluating investment performance in the third quarter
• Year-end planning including consultations with CPAs
• Strategies for maximizing tax write-offs and retirement contributions

For expert financial advice, contact Brian at 719-358-2360 or email contactus@brwtax.com.

Randi Lynn Johnson is your host for the Pasley Commercial Interiors podcast conversation on everything that connects business growth and interior design. Each episode features powerful insights from Robin Pasley, NCIDQ, Founder & Design Principal.

We welcome your questions! If you would like to learn more about us or connect for a conversation, please visit www.pasleycommercialinteriors.com.

Transcript

Brian Werner: 0:13

All right Okay.

Randi Lynn: 0:14

We're back with Brian Werner. If you missed the previous episode, go back and listen. It'll be really easy to find. It's the one right before this one. That's so easy. Yeah, because we're talking about all kinds of important things to know for tax write-offs and business expenses etc. Not going to rehash it, just go re-listen. But it's January and, as such, people are thinking to set up the year. Usually you think kind of that last quarter, oh, I've got to buy things to bring the income down. You know they're thinking ahead typically, but we have you now and so let's talk about if we're, if we were going to set up our year, what are good things to do? Maybe just each quarter, be like hey, think about this plan for this, whatever. Can you hit us with it?

Brian Werner: 1:02

Definitely so. I would say number one the most crucial planning tool that any company can have that a lot of them don't is a budget. Oh, is it budget.

Randi Lynn: 1:13

Yeah.

Brian Werner: 1:13

And it's because it's your probably your best kind of guesstimate projection of what 2025 is going to look like for you, right? So I usually tell people I'm like, don't spend a ton of time in that, because you know, obviously there's a lot of unknowns that can happen over the next 12 months, but at least hopefully, you have a decent amount of pulse on it and you can kind of say, okay, this is what I project 2025 to look like. Um, it helps you kind of plan, like where are you going to invest certain dollars when it comes to, like, interior design, or like, maybe your marketing and your branding and such Um, do you have the ability to grow your company? Is that your plan? Do you need to add more people? Do you need to add more, you know, office equipment, furniture and such right? So these are things that companies need to plan for, and if you don't have a plan, you're usually just kind of, you know, running blind.

Randi Lynn: 2:09

Yeah, and if they don't have a plan, can they come to you?

Brian Werner: 2:12

Can you?

Randi Lynn: 2:12

help them with their budget.

Brian Werner: 2:13

Definitely Great. I geek out on that, I love that?

Randi Lynn: 2:17

Did they start by just taking all of their categories from the year before and build from that?

Brian Werner: 2:22

Oh, totally yes, and actually there are some accounting softwares that pretty much allow you to like copy last year and then start from there, so you're not having to recreate the wheel.

Randi Lynn: 2:32

Okay, all right, so start of the year, we're going to set our budget. Yeah, what should we do? Quarter two Quarter two.

Brian Werner: 2:39

I would say at that point, you know, that's kind of your mid year it's probably a great opportunity to say, okay, how are things going so far? And then what do I know that maybe has changed. Because I always tell people like a budget's not static, it's not going to like be frozen. Pretty much I consider budget to be fluid and sometimes there may be changes that will impact your organization and they're going to impact your budget for the remainder of the year. So, and that's okay, that's okay for it to you know, maybe make an update, you know around mid year, to say, okay, maybe revenues are, maybe we're growing faster than we expected, Maybe we're growing a little slower than expected, and make those you know necessary changes, just so you have kind of a you know a better projection of what the rest of the year is going to look like for you Set the budget, tweak the budget quarter three summertime we're having a good time.

Randi Lynn: 3:33

What's happening?

Brian Werner: 3:33

Yeah, everybody's having barbecues and, you know, working shorter hours, hopefully. But I would say at that point, it's good time for you to look back, okay, and say, okay, what are we doing that's working, what are we doing that's not working? Okay, and then make appropriate adjustments. So we work with a lot of our companies on we call it investing their dollars, because every business, instead of using the word spend, because spend has such a negative connotation To me every dollar that a business invests should have a return on investment, right? So it's a good opportunity for businesses to look and see what investments are paying off.

Brian Werner: 4:15

Opportunity for businesses to look and see what investments are paying off Like, wow, we just invested in a brand new space and it's beautiful and our customers love it and the business is growing. Well, that sounds like a really great investment that the business made. But maybe a business may be, you know, taking a particular marketing route and they haven't generated any new business from that marketing route and they've been sinking dollars into it for the last six months. It might be time to maybe look at that and say, okay, maybe we turn that, turn that off, and can we reallocate those dollars in a more meaningful way.

Randi Lynn: 4:49

Great Okay, Quarter four.

Brian Werner: 4:53

Quarter four, and that's pretty much you know when everything ramps up and everybody's trying to plan for year end, essentially.

Brian Werner: 5:01

So it seems like, you know, almost from like Halloween until like the end of the year, you know, a lot of companies are usually trying to you know maneuver. Maybe, if they have you know a large bottom line, they're looking to their certified public accountants, their CPAs, to discuss some year end planning. Maybe some, you know, do we need to? Maybe you know, invest more dollars in our office equipment if they have the need, or if they have the need for new furniture and such and um?

Randi Lynn: 5:30

yeah, tell us some some things that people typically spent, like if they, if they got to get their books balanced a little bit more. What are? What are some things people can think about?

Brian Werner: 5:40

So I'd say retirement plans is usually a big one. Um, sometimes you know owners of companies or even you know owners of companies sometimes have options when it comes to retirement plans, and some of them are more lucrative than others and allow you to put more into your retirement accounts. There's retirement plans like 401k plans that even allow you to do profit sharing with your employees as well. So that would be probably one that's you know, still gives owners the ability to keep control of that money, but all they're doing is shifting it from company resources into their own retirement accounts. So that's usually a big one that we kind of look at. And then there's even enhanced retirement plans like defined benefit plans that if there's a lot of income and they have, I would say, mo' money, mo' problems, pretty much.

Randi Lynn: 6:34

Great song, great song, cool. That's awesome. Yeah, all right. So I'm going to hit them again because we know I like bullet point. Yes, quarter one budget Make it Stick to it. Quarter two see if you're sticking to it, reassess, tweak it if you need. Quarter three look back right. So we're thinking what were the investments that worked? Maybe we need to reallocate the things elsewhere. And then, quarter four talk to your CPA about how to make investments work for you. Buy that furniture, do the upgrades, things like that. To do the write-offs and retirement planning. That was a big one, because that is a good place to put money at the end of the year that, instead of it sitting in the bank account, help you or your employees with their future planning, which is great.

Randi Lynn: 7:27

That is great Cool.