Tuesday, February 11, 2020

To Safeguard Your Company's Data, Consider a Cybersecurity Assessment

As data breaches continue to make headlines at an alarming rate, no business can afford to ignore cybersecurity. To ensure that your company is taking appropriate steps to protect sensitive information — both its own and that entrusted to it by customers and business partners — consider conducting a cybersecurity assessment or audit. An added benefit of these assessments is that it sends a message to your customers and others that you take their data security seriously, which can provide a competitive advantage.
The first step the auditor will take is to take inventory of all your data and determine where it's located. While much of your data is housed on your on-site network or private cloud servers,  you might be surprised to learn how much of it resides on the networks of third parties — such as internet service providers, vendors, customers, financial institutions or business partners — or is accessible by them. The auditor will also take inventory of your hardware and software and map your network, data flows, and entry points. As the workforce becomes increasingly mobile, it's particularly critical to examine the ways in which your employees gain access to your network. As the number of entry points increases, so does your risk.
It's equally important, if not more so, to evaluate your policies, procedures, and internal controls related to information security. The majority of data breaches involve social engineering — that is, hackers who take advantage of weak passwords or lax security protocols or use phishing or other techniques to trick personnel into downloading malware. A cybersecurity assessment can help you identify potential vulnerabilities and implement policies, procedures, and controls designed to minimize the risks of a data breach and mitigate the damage should a breach occur.
Depending on your industry, you might consider going a step further and obtaining a certification that your company complies with an accepted cybersecurity standard. A number of organizations have promulgated such standards, including the National Institute of Standards and Technology (NIST) and the International Organization for Standardization (ISO). Getting certified can give your company a competitive edge. Plus, in some industries, the government and other organizations are increasingly demanding that their partners obtain such a certification as a condition of doing business with them.
Once you conduct a cybersecurity assessment, you can't simply put it on a shelf and forget about it. Hackers and other cybercriminals are continually coming up with new, innovative techniques for bypassing companies' security measures, so it's important to monitor the performance of your information security system and periodically re-assess your risks.

Ben Kinsey, CPA of Small Business Group works with owners of closely held corporations in the Northeast Florida region.  If you work in the North Florida area we offer a FREE initial Consultation at our office, please contact Small Business Group if you would like to know more about strategies for your business.

What's Your Business Worth? Beware Rules of Thumb!

There are many reasons you may need to know the value of your business, such as pricing it for sale, seeking financing, tax and estate planning, or even divorce. Many business owners use rules of thumb to gauge their businesses' values. But while these “cocktail napkin” estimates can be a good way to get a general idea of what your business is worth and begin the planning process, they're no substitute for a thorough analysis by a valuation professional.
The Trouble With Rules of Thumb
Rules of thumb are easy-to-calculate valuation formulas, typically tied to some multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) or some other measure of earnings, revenues or cash flows. Often they're derived from data about actual business sales in your industry, which gives them an air of legitimacy.
The problem is that rules of thumb are usually based on industry averages. But most businesses don't possess characteristics that are identical to the hypothetical “average” business, so applying a rule of thumb may lead to inaccurate results. Consider this example:
Company A and Company B each have EBITDA of $2 million per year. According to a popular valuation rule of thumb in their industry, each company is worth five times EBITDA, or $10 million. The two companies are similar in many ways, but a closer look reveals that Company A relies on a single customer for more than 80 percent of its sales. Company B has a much more diverse customer base, with no single customer accounting for more than 10 percent of its sales. Any prospective buyer that does its due diligence would view Company A as a substantially riskier investment and adjust its valuation downward to reflect the additional risk.
Professional Valuation: There is No Substitute
The example above is a bit oversimplified, but it illustrates how rote application of rules of thumb can distort a business's value. In practice, each business possesses numerous characteristics that drive its value and may or may not be captured by a rule of thumb. Rules of thumb provide a handy way to get a rough estimate of your business's value or to serve as a “sanity check” against more sophisticated valuation methods. But only a professional valuation can provide the accurate information you need to achieve your goals.

Ben Kinsey, CPA of Small Business Group works with owners of closely held corporations in the Northeast Florida region.  If you work in the North Florida area we offer a FREE initial Consultation at our office, please contact Small Business Group if you would like to know more about strategies for your business.

Wednesday, July 31, 2019

Adding E-Commerce to Your Company’s Lineup

By Ben Kinsey

Image courtesy wikimedia
If you operate a small business, you no doubt always look for a way to increase profits without increasing cost.  While adding a new sales representative or a new location is one way to increase cash-flow, the added expense of either can sometimes lead to reduced cash-flow, especially in the short term.  That’s because it takes time and money to hire and train a new rep, just as it takes time and money to advertise a new location.  But what if there was a way to add a new sales node onto your business that didn’t require you to add to your payroll or even add to your rent and inventory costs?  Do you think this could help your business?  One of the most efficient ways to achieve this aim is by adding e-commerce to your lineup. 

Wednesday, July 17, 2019

5 Signs Your Small Business is In Trouble

By Ben Kinsey

Image courtesy of Pixabay
One thing that’s certain about owning a small business is that it’s never boring.  Whether your business is a one-man band, a mom & pop shop, or you have graduated to the point where you have a handful of employees to contend with, owning a business is a challenge that many people never attempt.  That being said, owning a small business means having to deal with financial ups and downs.  While most business owners would rather deal with the issues of a business on its way up rather than on its way down, both of these indicators can lead to disaster if you don’t heed the warning signs.

Thursday, July 4, 2019

10 Ways QuickBooks Can Help You Build Your Business

By Ben Kinsey

Image courtesy wikimedia
While it’s true that the American Dream is still alive and well, when it comes to realizing your dreams by owning a small business, you sometimes have to wear a lot of hats.  If one of those hats you are forced to wear is as the company bookkeeper, let me show you how QuickBooks can help make the task not more efficient, but more profitable.

Thursday, June 20, 2019

Surviving an IRS Audit

By Ben Kinsey

Image courtesy wikimedia
Business owners are used to dealing with stress.  That’s because stress is part of the job.  Whether it’s dealing with difficult clients, balky vendors or recalcitrant staff members, business owners are part tycoon and part firefighter.  But when it comes to putting the fear of God into most business owners, nothing comes close causing them to panic than to receiving a letter informing them that their business is about to be audited by the IRS.  To help keep you from going off the deep end should your business ever wind up being audited, I have put together a list of steps to help you survive this calamity.

Thursday, June 6, 2019

All About Bookkeepers and Accountants

By Ben Kinsey

Image courtesy of Pixabay
The first job or any business owner is to get paid.  The second is to make sure that he or she is getting paid enough to turn a profit.  Last but not least, if you want your business to grow, you need to make sure you aren’t wearing so many hats that you wind up running yourself into the ground.  When it comes to charting, planning and optimizing the metrics of a growing business, two of the most important profit builders are the company bookkeeper and accountant.  While neither of these individuals are responsible for driving profits, they are both key when it comes to deriving business profit.  That being said, their jobs are quite different.  To give you a leg up on what it is that they do, I thought I’d take the time to give you my short list that charts their responsibilities.