Tax Savings Through Cost Management with Stephen Anderson

CGT 14 | Cost Management

Management of a business’ cost is always standard operating procedure, but not everyone can do it effectively. The Profit Doctor, and a GMG Agent of Stryde Solutions, Stephen Anderson, joins this episode to talk about the services they provide. He discusses the processes they have in place in figuring out the areas of your business that can be optimized to provide less expenses and more profit. Stephen also talks about their strategies for tax incentives. Learn how they can optimize all parts of your business while giving you the opportunity to add value for your customers. Know more about their guarantee as they provide their service, both with their fees and the IRS.

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Tax Savings Through Cost Management with Stephen Anderson

Our guest is focused on small to medium-sized business owners. Let’s face it, many of these owners struggle with a financial control system and accounting as well as organizational development, personal productivity and sales. He has spent many years helping hundreds of these business owners increase profits and developed systems to be more profitable. He’s known as The Profit Doctor to many of his clients and customers.

He has a software that can help business owners take advantage of a specialized tax incentives to reduce their taxes. He resides from the state of Florida, which has some of the more favorable tax treatment for income tax since it’s zero. He knows a two or thing about helping people reduce their taxes. You can learn more about our guest by going to go into his web address which is StrydeSavings.com and emailing him at TSA@ACPMgt.com. Please welcome to the show, Stephen Anderson.

Thank you, Brett. I’m glad to be here. Thank you so much for inviting me to talk with your clients. My name is Stephen Anderson, your Profit Doctor. I’ve been a business consultant for many years traveling the country, helping small business and medium-sized businesses overcome the obstacles that kept them from making more profits. There are three areas that affect profits in any business. It’s the financial management and control, organizational and personnel productivity, and sales and marketing. I work in all of those areas to help businesses increase more profits. Let me give you a little story about one of my clients. They were a $12 million corrugated box manufacturer. They sold their boxes to the secondary automotive business, which means parts manufacturers would build their parts, put them in my clients’ boxes and ship them to manufacturers like Ford, GM and all that.

I don’t know if you know anything about the automotive industry but two months out of the year, all those sales are practically nothing because the major manufacturers are retooling for the next year. Anybody that sold any products to the manufacturers, their sales went down for two months as well. That was heartbreak for this business. I got in there and I looked at everything about their business and one of the first things we did was we fixed their financial control systems. We implemented a better accounting system whereby they could identify where their expenses were and we did it by departments. We set up new department heads and we also looked at their cashflow and how they handle that thing.

They had a $1 million line of credit which was almost capped out and that doesn’t help, especially when it comes up to those two months. They were a $12 million company but they’re only making $320,000 in profits so that’s not good for manufacturing. Long story short, we got in there and we fixed all their financial issues. We trained and taught their managers how to read and understand their financial statements, we did budgeting and we did cashflow management. The next thing we worked on was setting up their organization, training their managers on how to be better managers and how to improve productivity in their employees. We worked on some other employee issues that made them more efficient.

CGT 14 | Cost Management

Cost Management: Missouri is a 30-day state. Once information on a foreclosure property is put on public records, it’ll be in auction 30 days later.

 

Once we worked on that and fixed all those, we looked at their sales and marketing and because of their two-month lag, we had to figure out a way to fix that problem. Since they only sold to the secondary automotive business, they were only a sales organization. They didn’t market. They only contacted those secondary manufacturers and sold their boxes. One of the things I wanted them to do is once we worked on their financials, we wanted them to pay down their line of credit as fast as possible. I didn’t tell them why, but I knew we had to do something financially that would fix the two-month lag. After working with them for eighteen months, they got their line of credit down below $300,000 and their profits were a little over $1 million.

I had them go to a bank and ask for a $1.5 million loan to buy a special piece of equipment. What that special piece of equipment does is it takes any corrugated materials and they can program whatever they want out of it. As an example, they are only working in the automotive industry. How many industries do you know use corrugated boxes? Every single industry out there. Also, if you ever walk in a grocery store, you’re walking down the aisles and you see these displays with cookies on them, the displays are made out of corrugated materials and they’re colorful. This machine would take any materials and turn them into whatever they programmed into the machine. Also, it had four-color printing, which means they could print whatever they wanted on it.

Once they had that machine, they bought the machine, they got the bank loan with no problem whatsoever and they got the company to train them on how to run it. Their market opened up to any industry that had corrugated boxes, which basically every industry. I had them hire a manager to do marketing, which they didn’t have and that person whose job was to find new markets for these new products. The products were any kind of boxes, materials and displays even that utilized corrugated boxes.

After doing that for 35 years, I got tired of all the travel that was necessary. I want to spend more time with my family so I quit that business. I wanted to start something that I could stay in business but be in the St. Louis area. I started as a real estate investor and I would be buying and selling foreclosure properties. I would help individuals that are in foreclosure and negotiate with the banks to get a short sale. Once I did all that, I bought the house and either sold it to an end buyer or to another investor depending on the condition of the house. I did that in St. Louis for a number of years.

One of the issues that I ran across was in St. Louis, Missouri. They are what’s called a non-judicial state, which means that the banks don’t have to go to court to get the foreclosure process started. All I had to do is hire a local attorney that handles that and the attorneys by law have to put information on public records that they were starting the foreclosure process. In Missouri, it’s a 30-day state, which means the moment that they put that in public records, 30 days later is when they had the auction so I had to move fast. I figured out a way of getting in front of this and getting information on these foreclosures before even the owners knew about it.

CGT 14 | Cost Management

Cost Management: In Orlando, there was no motivation for people that live in houses. They could live in a house for years without making any payments and not worry about being kicked out.

 

I was able to get a lot of business that way because of my letters that were personal and not the typical ones that you see everybody else sending them. I did that for seventeen years in St. Louis. My wife and I wanted to move to Orlando to be with our oldest daughter because she was starting a family. We left St. Louis and moved to Orlando, Florida. I wanted to continue business so I tried doing that foreclosure business in Orlando but that didn’t work out too well because the laws in Florida are totally different. They have to go to court because it’s called a judicial state. By the time that they get into court and go through the whole process, it could be several years before the foreclosure auction happened.

I noticed that there was no motivation for these people that live in the house. They could live in this house for 2 to 3 years without making any payments whatsoever and not even worry about being kicked out because it takes that long to go through the foreclosure process. I had to find something else other than foreclosures that didn’t work. I started working in other distressed property areas like probate, vacant houses and all of those different ones. I negotiated with the owners to buy the property, then I wholesale all those properties. I’ve been doing that for a few years here in Orlando. It’s gotten to the point where there are those that are trying to be wannabe investors. They’re screwing up deals after deal so I had to get back into something that would work.

I went back to my consulting business, but I didn’t want to travel as much as I used to. I hooked up with a company called Stryde and what they do is they look at a variety of different types of expenses that businesses typically overpay. As an example, credit card processing, waste and recycling, workers comp, HR costs, office supplies and office equipment. All of those areas are expenses that we can reduce. The way we do this is we develop a proprietary software program whereby we can ask the questions to these owners and I enter the information into the computer software. At the same time, within fifteen minutes, I can show them how much money we anticipate we can save them because this software program is connected to federal, state and local databases as well as industry databases.

We’ve been doing this for many years and thousands of clients in many different types of industries. We have access to a wide range of data. We can run the software program and within fifteen minutes, I can show them how much money we can put back in their pocket by offering our services so we do this for no cost. Once the client sees the numbers, which they always love, which is hundreds of thousands of dollars, we then ask them if they want us to do a detailed analysis so we can find out exactly how much money we can put back in their pocket. We do this for no charge whatsoever.

Once we run through the detailed analysis, we need to collect some documentation from the client so we asked them specifics based on the answers they gave us on the software program, specific documentation. Once we get the documentation, Stryde has a wealth of consultants and specialists that will look over all the documentation and go through and identify what areas and exactly how much money we can put back in their pocket.

Every business wants to increase their cashflow by reducing expenses and taxes. Click To Tweet

Once we do all of the expenses, we also looked at specialized tax incentives. Because of our software program being accessible to all of the federal government and state government programs, we can do a wide variety of specialized tax incentives. As an example, if you own a commercial property, we can do what’s called engineered cost segregation and what that means is CPAs can’t do this because they don’t have an engineering degree, whereby we go in and look at a commercial property and we look at all the component parts. Once we look at the component parts, we can identify things like electrical, plumbing wiring and all these other different parts. There are about twelve different component parts we can look at and we identify the value of those individual items compared to the total value of the property.

In the past, what the CPAs would do is they would take the value of the property, rehab and divided by the number of years that IRS allows, which typically is 27 years. They do what’s called straight-line depreciation. What that means is they take the value of the property plus any rehab costs divided by 27 years. That’s how much money they can depreciate each year. The appreciation means they can reduce their taxes by that dollar amount.

What we do is we do the engineering cost seg study and we accelerate the depreciation quickly, because each one of those component parts is a new depreciation schedule. It could even be as low as five years. We take let’s say $1 million property. They spent $100,000 on electrical so we take $100,000 divided by five, instead of the 27 years. We do that for each individual component and we can save hundreds and thousands of dollars in taxes in that one area alone. We also negotiate property taxes for commercial property owners. All of this work that we’re doing, we charge the client nothing. We’re using our time, effort and money to do all this work for them. For certain companies, we have R&D tax savings.

You charged them nothing and adding all this value. What an amazing story you have with not only business consulting, but foreclosure real estate investing and back into tax incentives and other ways to help businesses be more profitable. I could see why they call you the Profit Doctor because you have so much experience and knowledge to share and help people in creative ways. Once you do the cost seg study and you show the savings and the other savings as well, it sounds like there is property tax and there’s cost seg instead of straight-line depreciation schedules. Collectively, are you presenting it as a whole like, “This is the entire package?” At that point, do you get a percentage of that savings? How do you guys get paid?

To answer your question, let me piggyback on what you said. We also do R&D tax credits, energy credits and hiring incentives called WOTC. The way we do it is we go through based on the answers that they give us, as well as the documentation they give us. We analyze everything and once we come through and do the analysis, we put together a report and give it to the owners of what we found out. As an example, when we do the cost seg study, it takes us several months because of the extensive research they have to go through. Also, at the same time, once we put together the documentation, we’re working with the IRS to ensure everything we’re putting in the documentation is up to snuff with the IRS.

CGT 14 | Cost Management

Cost Management: Our software can show you how much money our service can put back in your pocket within fifteen minutes.

 

Once we get that documentation done, we print out the report and we give it to the client. At that moment in time, they owe us money only when we can get substantial savings. As an example, with the cost seg study, we only charge 10% of whatever we’re saving them. Once we get that report, the owner can give that report to the CPA, which files. We have zero audits on any of our cost seg studies because we’ve already worked with the IRS before we even send it to the client. All of our other services, we charge a different fee. As an example, for our property taxes, we charge 50% of that first savings. For hiring incentives, it’s 15%, property tax and mitigation is 50%. Credit card processing, waste and recycling and workers comp we charge 50% only of the savings. If we do our due diligence and we don’t find any substantial savings, you pay us nothing.

The key is the savings. As long as the savings are big enough, the fees will be based upon that amount. What’s the most rewarding part of what you do?

I love helping businesses and you can see my history as I’m working with businesses for many years traveling the country and helping them solve their profit problems. I was helping individuals from losing their house and helping individuals in stressful situations. Now I’m back to businesses in helping them put more cash back into their pocket by reducing all of these expenses and taxes.

Helping people is the key thing. Who is Stephen growing up? What gifts were you given? We’re all given certain gifts in this life and I’m curious about what gifts were you given Stephen and how has that shaped how you help others?

I grew up with a middle-class family in Miami. We live on Canal which means that I was in the water constantly for most of the day. I enjoy the South Florida weather. Eventually, I got to the point where I had to go to college to stay out of the draft because this is back in 1968 or 1970. There was a draft back then. When it finally got to the point where there’s no more draft, I had to go into the military. I joined the Navy and started fixing airplanes. I enjoyed that for eight years traveling the Mediterranean. I came back and started working on McDonnell Douglas in St. Louis. That’s why I went to St. Louis as a mechanic as well. Helping fix things and helping fix business problems has been my background for many years. I also taught colleges, seminars for businesses and how to overcome all these obstacles. My business background is training and helping others become more successful.

As your commitment to help others grows, so does your wealth. Click To Tweet

That’s a great gift to have helping others be more successful. What a journey with the military and with all the different businesses. I consider you a business wealth advisor. I don’t know if there’s a better definition of a business wealth advisor than yourself. What should every other wealth advisor such as a financial advisor, commercial real estate broker, commercial real estate syndicator or business brokers because I consider them wealth advisors too for their niche. What should all those other wealth advisors know about what you do and perhaps you work with some of them now? How would they best leverage working with your services and expertise to grow their business? In other words, how do you collaborate with other business professionals so together, you can help these business owners who need a lot of help?

What I do with any other business service provider is I work with them hand in hand as a strategic partner, whereby I can provide my services through their business and their clients think they are the ones that are providing the service. I teach these service providers to tell their clients that you’ve added on new services that will generate more income cash in their business. All they have to do is get me in touch with a client. I do all my work and I do my computer program. I do the analysis and I’m hooked up with Stryde. When I get paid my commission, I give these people 25% of whatever I make. They make an additional income by providing more services that clients need. How many businesses want to increase their cashflow by reducing expenses and taxes?

Every one of them do. We all need those experts in those places so that’s great. You work hand in hand as an extension of their team and a strategic partner. You go do your work and help the client so it’s a win there. You win because you get more business and you give them a referral fee so they win too. That’s a great business model. How do you stay centered in your values and stay encouraged to charge forward to reach new goals? You’ve accomplished a lot in your lifetime and you’re accomplishing more and more and what a story you have. How do you stay centered in your values along the way and encouraged to charge forward to reach your goals?

I have a vision board on my wall and I have one that I constantly look at. It says, “As my commitment to help others grows, so does my wealth.” That pretty much sums it up. My main goal is helping as many businesses make more money because that’s what business is all about. It’s making money and growing. At the same time, once we get all of these issues worked out, we have other services that we can provide business loans. We have over 26 different business loans, real estate loans. We do business brokerage, franchise development. We even have an owner’s retirement plan that puts more cash in the pocket of the owner once they retire than any other retirement plan on the market.

I want to dig into that quote you said because this is powerful, “As my commitment to help others grows, so does my wealth.” Walk us through that. Is that something you’ve read in a leadership book or is that something that you’ve developed yourself?

CGT 14 | Cost Management

Cost Management: Stryde has a wealth of consultants and specialists that will look over all the documentation, identify the areas of improvement and give exactly how much money we can put back in your pocket.

 

I subscribed to many different types of motivational issues and I got this from one of them. I forgot exactly which one it was, but it was one of those times where you buy the product and it shows up on your screen. It scrolls to the next motivational issue and the next one and it keeps doing that. That’s one of the ones that I like the best. I liked it so much that I printed it out and put it on my vision wall. I look at it every single day.

Talk to us about your commitment. When your commitments are fading and/or when you’re not feeling encouraged to go through on your commitments, what helps you to charge forward to make sure you stay true to your commitments?

I have here what’s called press the button and has a baby laughing. I have two grandsons, age 5 and 6. One of them sounds like the youngest one laughing. That’s the reason why my wife and I moved to Orlando so we could be next to our grandkids and spoil the heck out of them. That’s what keeps me going. Anytime I get a little mentally low, I press that button and it gets me back up where I need to be.

Stephen, what’s the phone number if they wanted to call you direct? Is it okay to get your phone number here? Go ahead and share it.

It’s (407) 530-7783. I am offering to all your audience a free analysis of your business. On the website, there should be a link to download the questionnaire. Once you fill that questionnaire out, there’s the information on there on where to send it to. I’ll do your free analysis to find out how much money I can put back into your pocket. We’ll get you on the phone once I finish that and I’ll discuss it with you to show you how much money we can put back in your pocket quickly because we’re reducing expenses and taxes.

Capital Gains Tax Solutions Nation, I can’t think of a better way to help you grow your wealth but to take advantage of that free offer from Stephen Anderson. Reach out to him and let’s go make some more money by paying less taxes and net more money by paying less taxes. I want to thank you, Stephen, for being on the show. I also want to thank our readers for reading another episode of the blog. We believe in most high net worth individuals and those who helped them struggle with clarifying their capital gains tax deferral options. Not having a clear plan is the enemy and using a proven tax deferral strategy is the best way to grow your wealth. Until next time, go make it a great day.

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About Stephen Anderson ‘The Profit Doctor’

CGT 14 | Cost ManagementOver 35 years helping businesses increase their cash flow.

 

 

 

 

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By Brett

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