{"id":589,"date":"2015-09-10T14:44:53","date_gmt":"2015-09-10T19:44:53","guid":{"rendered":"http:\/\/www.utires.com\/blog\/?p=589"},"modified":"2024-08-06T13:09:50","modified_gmt":"2024-08-06T10:09:50","slug":"financial-management-for-a-tire-shop","status":"publish","type":"post","link":"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/","title":{"rendered":"Financial Management for a Tire Shop"},"content":{"rendered":"<style type=\"text\/css\">\n  h1 {<br \/>\n    text-align: center;<br \/>\n    margin-top: 45px;<br \/>\n    margin-bottom: 45px;<br \/>\n    border-bottom-width: 1px;<br \/>\n    border-bottom-style: solid;<br \/>\n    border-bottom-color: #e7e7e7;<br \/>\n    font-weight: normal;<br \/>\n    font-family: \"Calibri Light\", Arial;<br \/>\n    padding-bottom: 20px;<br \/>\n  }<br \/>\n  .middlenote {<br \/>\n  \tmargin: 20px;<br \/>\n  \tbackground-color: #E7E7E7;<br \/>\n  \tpadding: 10px;<br \/>\n  }<br \/>\n    .widthsHalf{<br \/>\n    width: 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#d1d1d1;<br \/>\n\tbox-shadow: 0 1px 2px #d1d1d1;<br \/>\n}<br \/>\ntable th {<br \/>\n\tpadding:21px 25px 22px 25px;<br \/>\n\tborder-top:1px solid #fafafa;<br \/>\n\tborder-bottom:1px solid #e0e0e0;<\/p>\n<p>\tbackground: #ededed;<br \/>\n\tbackground: -webkit-gradient(linear, left top, left bottom, from(#ededed), to(#ebebeb));<br \/>\n\tbackground: -moz-linear-gradient(top,  #ededed,  #ebebeb);<br \/>\n}<br \/>\ntable th:first-child{<br \/>\n\ttext-align: left;<br \/>\n\tpadding-left:20px;<br \/>\n}<br \/>\ntable tr:first-child th:first-child{<br \/>\n\t-moz-border-radius-topleft:3px;<br \/>\n\t-webkit-border-top-left-radius:3px;<br \/>\n\tborder-top-left-radius:3px;<br \/>\n}<br \/>\ntable tr:first-child th:last-child{<br \/>\n\t-moz-border-radius-topright:3px;<br \/>\n\t-webkit-border-top-right-radius:3px;<br \/>\n\tborder-top-right-radius:3px;<br \/>\n}<br \/>\ntable tr{<br \/>\n\ttext-align: center;<br \/>\n\tpadding-left:20px;<br \/>\n}<br \/>\ntable tr td:first-child{<br \/>\n\ttext-align: left;<br \/>\n\tpadding-left:20px;<br \/>\n\tborder-left: 0;<br \/>\n}<br \/>\ntable tr td {<br \/>\n\tpadding:18px;<br \/>\n\tborder-top: 1px solid #ffffff;<br \/>\n\tborder-bottom:1px solid #e0e0e0;<br \/>\n\tborder-left: 1px solid #e0e0e0;<\/p>\n<p>\tbackground: #fafafa;<br \/>\n\tbackground: -webkit-gradient(linear, left top, left bottom, from(#fbfbfb), to(#fafafa));<br \/>\n\tbackground: -moz-linear-gradient(top,  #fbfbfb,  #fafafa);<br \/>\n}<br \/>\ntable tr.even td{<br \/>\n\tbackground: #f6f6f6;<br \/>\n\tbackground: -webkit-gradient(linear, left top, left bottom, from(#f8f8f8), to(#f6f6f6));<br \/>\n\tbackground: -moz-linear-gradient(top,  #f8f8f8,  #f6f6f6);<br \/>\n}<br \/>\ntable tr:last-child td{<br \/>\n\tborder-bottom:0;<br \/>\n}<br \/>\ntable tr:last-child td:first-child{<br \/>\n\t-moz-border-radius-bottomleft:3px;<br \/>\n\t-webkit-border-bottom-left-radius:3px;<br \/>\n\tborder-bottom-left-radius:3px;<br \/>\n}<br \/>\ntable tr:last-child td:last-child{<br \/>\n\t-moz-border-radius-bottomright:3px;<br \/>\n\t-webkit-border-bottom-right-radius:3px;<br \/>\n\tborder-bottom-right-radius:3px;<br \/>\n}<br \/>\ntable tr:hover td{<br \/>\n\tbackground: #f2f2f2;<br \/>\n\tbackground: -webkit-gradient(linear, left top, left bottom, from(#f2f2f2), to(#f0f0f0));<br \/>\n\tbackground: -moz-linear-gradient(top,  #f2f2f2,  #f0f0f0);<br \/>\n}<\/p>\n<p><!--TABLE--><\/p>\n<\/style>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#FINANCIAL_MANAGEMENT\" title=\"FINANCIAL MANAGEMENT\">FINANCIAL MANAGEMENT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#BANK_SPECIALTIES\" title=\"BANK SPECIALTIES\">BANK SPECIALTIES<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#ACCEPTING_BANK_CREDIT_CARDS\" title=\"ACCEPTING BANK CREDIT CARDS\">ACCEPTING BANK CREDIT CARDS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Other_Credit_Cards\" title=\"Other Credit Cards\">Other Credit Cards<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#BOOKS_AND_RECORDKEEPING\" title=\"BOOKS AND RECORDKEEPING\">BOOKS AND RECORDKEEPING<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Business_Papers\" title=\"Business Papers\">Business Papers<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#PAYROLL_RECORDS\" title=\"PAYROLL RECORDS\">PAYROLL RECORDS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#PROFESSIONAL_ADVISORS\" title=\"PROFESSIONAL ADVISORS\">PROFESSIONAL ADVISORS<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Lawyers\" title=\"Lawyers\">Lawyers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Accountants\" title=\"Accountants\">Accountants<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Business_Consultants\" title=\"Business Consultants\">Business Consultants<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Finding_a_Qualified_Consultant\" title=\"Finding a Qualified Consultant\">Finding a Qualified Consultant<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#LICENSES_AND_TAXES\" title=\"LICENSES AND TAXES\">LICENSES AND TAXES<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#LICENSES_AND_PERMITS\" title=\"LICENSES AND PERMITS\">LICENSES AND PERMITS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Business_License\" title=\"Business License\">Business License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Fire-Department_Permit\" title=\"Fire-Department Permit\">Fire-Department Permit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Sign_Permit\" title=\"Sign Permit\">Sign Permit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#County_Permits\" title=\"County Permits\">County Permits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#State_Licenses\" title=\"State Licenses\">State Licenses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Federal_Licenses\" title=\"Federal Licenses\">Federal Licenses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Zoning_Ordinances\" title=\"Zoning Ordinances\">Zoning Ordinances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/#Other_Regulations\" title=\"Other Regulations\">Other Regulations<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 align=\"center\"><span class=\"ez-toc-section\" id=\"FINANCIAL_MANAGEMENT\"><\/span>FINANCIAL MANAGEMENT<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You must regard capital as a business tool requiring skilled use. All money invested in your business whether in fixtures equipment stock or operating expenses should yield a profit. Because of the risks you incur by going into business for yourself this capital should yield a higher rate of return than could be obtained from an investment in government or corporate securities earning a guaranteed rate of interest. But this requires present management of your business.<\/p>\n<p>Careful financial planning is a continuing necessity once your business is established. A current shortage of funds is often the result of unwise use in the past.<\/p>\n<p>In particular you should:<\/p>\n<p><strong>1)<\/strong> Avoid an excessive investment in fixed assets<\/p>\n<p><strong>2)<\/strong> Maintain receivables and net working capital in proper proportion to sales<\/p>\n<p><strong>3)<\/strong> Avoid excessive inventories<\/p>\n<p><strong>4)<\/strong> Avoid excessive payables.<\/p>\n<p>Every firm\u2019s financial difficulties regardless of size can be traced to violation of one or more of these four basic principles of financial management.<\/p>\n<h2 align=\"center\"><span class=\"ez-toc-section\" id=\"BANK_SPECIALTIES\"><\/span>BANK SPECIALTIES<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Some banks specialize in certain types of businesses or have departments to handle different types of trade. Some banks only go for big money. Those interested in attracting loans from small businesses are likely to be more attentive to the needs of new and growing firms. You can usually judge them by their eagerness to obtain your business account. Here are a few questions to ask your prospective banker that will assist you in making a judgment:<\/p>\n<p><strong>1.<\/strong> Is it necessary to maintain certain balances before the bank will consider a loan?<\/p>\n<p><strong>2.<\/strong> Will the bank give you a line of credit and if so what are the requirements?<\/p>\n<p><strong>3.<\/strong> Does the bank have limitations on the number of small loans it will grant or the types of businesses to which it will grant loans?<\/p>\n<p><strong>4.<\/strong> What is the bank\u2019s policy on the size or description of checks deposited to be held for collection?<\/p>\n<p><strong>5.<\/strong> Will checks under that size be credited immediately to your checking-ac- count balance? (This question is very important and you must press for a definite answer.)<\/p>\n<p>If you do not have a previous business account to serve as a reference a few banks may hold all checks for collection until they develop experience with you, whether or not the bank exercises this precaution may depend on your personal credit rating.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"ACCEPTING_BANK_CREDIT_CARDS\"><\/span>ACCEPTING BANK CREDIT CARDS<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>By accepting credit cards like VISA and MasterCard your customers are able to charge their purchases directly through the bank. This eliminates the procedures required for you to grant credit to a customer. To avoid making deposits at more than one bank each day look for one that handles these two major cards.<\/p>\n<p>In case you are not familiar with the procedure for handling credit-card sales here\u2019s how it works: You deposit the credit-card sales draft in the bank just like a check. The bank deducts a service fee usually 3 or 4 percent of the face amount of the sales draft and credits the balance to your checking account. Therefore the sale is almost like a cash sale.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Other_Credit_Cards\"><\/span>Other Credit Cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>American Express Diners Club and Carte Blanche work a little differently from bank credit cards. You tally the total credit-card sales drafts each day and mail them to the credit-card company.<\/p>\n<p>The charge to the specific firm will vary with two basic factors: 1) total volume of credit-card sales and 2) the average dollar sale. An airline that discounts $2 million per week with a credit- card company and has an average sale of $100 may pay a charge of 1 percent. The average charge for a small volume of credit sales and a much lower average sale is 5 or 6 percent. Some charge-card companies allow for an additional 1-percent discount. Don\u2019t be afraid to negotiate. Since competition among credit-card companies is keen you should always request a lower rate. If you get it you will enhance your profits.<\/p>\n<h2 align=\"center\"><span class=\"ez-toc-section\" id=\"BOOKS_AND_RECORDKEEPING\"><\/span>BOOKS AND RECORDKEEPING<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are only two reasons to keep records of a business operation: Records are required by law and they are useful to you as a manager.<\/p>\n<p>Records must be kept to determine the tax liabilities of the individual or business. Regardless of the type of bookkeeping system employed the records must be permanent accurate and complete and must clearly establish income deductions credits employee information and anything else specified by federal state and local regulations. The law does not require any particular kind of records only that they be complete and separate for each business.<\/p>\n<p>When you start in business establish the type and arrangement of books and records most suitable for your particular operation keeping in mind the taxes for which the business is liable and when they fall due. If you are not competent in this area outside professional help is called for. Setting up a system for good recordkeeping need be done only once, doing it efficiently makes things much easier later on.<\/p>\n<p>Double-entry bookkeeping is usually the preferred method of keeping business records and making use of journals and ledgers. Transactions are entered first in a journal and then monthly totals of the transactions are posted to the appropriate ledger accounts. The ledger accounts include five categories:<\/p>\n<p><strong>1)<\/strong> Income<\/p>\n<p><strong>2)<\/strong> Expense<\/p>\n<p><strong>3)<\/strong> Assets<\/p>\n<p><strong>4)<\/strong> Liability<\/p>\n<p><strong>5)<\/strong> Net worth.<\/p>\n<p>Income and expense accounts are closed each year, asset liability and net- worth accounts are maintained on a permanent and continuing basis.<\/p>\n<p>Single-entry bookkeeping although not as complete as the double-entry method may be used effectively in the small business especially during its early years. The single-entry system can be relatively simple. The flow of income and expense is recorded through a daily summary of cash receipts a monthly summary of receipts and a monthly disbursements journal (such as a checkbook). This system is entirely adequate for the tax purposes of a small business.<\/p>\n<p>All business receipts should be deposited in a separate bank account with a petty-cash fund established for small expenses. All business expenses paid by cash should be supported by documents that clearly show that the expenses were incurred for business purposes.<\/p>\n<p>All disbursements should be made by check if possible so that business expenses can be well-documented. If a cash payment is necessary a receipt for the payment or at least an explanation of it should be included in the business records. All canceled checks paid bills duplicate deposit slips and other documents that substantiate the entries in the business records should be filed in an orderly manner and stored in a safe place.<\/p>\n<p>Accounts should be classified in groups relating to income expenses assets liabilities and net worth. Asset accounts should be classified as current or fixed, dates of acquisition cost depreciation and any other items affecting the accounts should be recorded in detail.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Business_Papers\"><\/span>Business Papers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Carefully preserve all underlying business papers. All purchase invoices receiving reports copies of sales slips invoices sent to customers canceled checks a receipts for cash paid out and cash register tapes must be meticulously retained. They are not only essential to maintaining good records but may be important if legal or tax questions are ever raised.<\/p>\n<h2 align=\"center\"><span class=\"ez-toc-section\" id=\"PAYROLL_RECORDS\"><\/span>PAYROLL RECORDS<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Payroll records present another set of problems. An employer regardless of the number of employees must maintain all records pertaining to payroll taxes (income-tax withholding Social Security and federal unemployment tax) for at least four years after the tax becomes due or is paid whichever is later.<\/p>\n<p>There are 20 different kinds of employment records that must be maintained just to satisfy federal requirements. These records are summarized below.<\/p>\n<p>Income-Tax-Withholding Records:<\/p>\n<p><strong>1.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Name address and Social Security number of each employee.<br \/>\n<strong>2.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Amount and date of each payment of compensation.<br \/>\n<strong>3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>Amount of wages subject to withholding in each payment.<br \/>\n<strong>4.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Amount of withholding tax collected from each payment.<br \/>\n<strong>5.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Reason that the taxable amount is less than the total payment.<br \/>\n<strong>6.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Statements relating to employees\u2019 nonresident alien status.<br \/>\n<strong>7.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Market value and date of noncash compensation.<br \/>\n<strong>8.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Information about payments made under sick-pay plans.<br \/>\n<strong>9.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Withholding exemption certificates.<br \/>\n<strong>10.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 Agreements regarding the voluntary withholding of extra cash.<br \/>\n<strong>11.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 Dates and payments to employees for non business services.<br \/>\n<strong>12.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 Statements of tips received by employees.<br \/>\n<strong>13.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 Requests for different computation of withholding taxes.<\/p>\n<p>Social Security (FICA) Tax Records:<\/p>\n<p><strong>1.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Amount of each payment subject to FICA tax.<br \/>\n<strong>2.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Amount and date of FICA tax collected from each payment.<br \/>\n<strong>3.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Explanation for the difference if any.<\/p>\n<p>Federal Unemployment Tax (FUTA) Records:<\/p>\n<p><strong>1.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Total amount paid during calendar year.<br \/>\n<strong>2.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Amount subject to unemployment tax.<br \/>\n<strong>3.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Amount of contributions paid into the state unemployment fund.<br \/>\n<strong>4.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Any other information requested on the unemployment tax return.<\/p>\n<p>Payroll for a small firm is a simple task with a good pegboard or \u201cwrite-it- once\u201d system. Any office-supply store can show you samples of different one-write systems. A good accounting clerk can be taught how to use one in about 15 minutes. Most accountants recommend these systems because they reduce errors and save time in making payroll entries.<\/p>\n<p><strong>Other Records You Should Retain\u00a0\u00a0\u00a0\u00a0 <\/strong><\/p>\n<p>Records supporting entries on a federal tax return should be kept until the statute of limitations (ordinarily three years after the return is due) expires. Records relating to depreciable property should be retained for as long as they are useful in determining the cost basis of the original or replacement property. Copies of federal income-tax returns should be kept forever; they may even be helpful to the executor of your estate.<\/p>\n<h2 align=\"center\"><span class=\"ez-toc-section\" id=\"PROFESSIONAL_ADVISORS\"><\/span>PROFESSIONAL ADVISORS<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you choose your banker wisely you will have at your service a skilled professional consultant one who will not under normal circumstances charge for his services. You will also need the help of other specialists including an accountant an attorney and one or more consultants who are experts in your field. You will rely on some of these experts only sporadically but your accountant will serve you on a regular basis.<\/p>\n<p>On the following pages we suggest how to find the best advisors. Bring up the matter of fees early to make certain you have a clear idea of what services you will receive for the agreed-upon price. Fees charged by professionals vary enormously depending in large part on their experience and their expertise in the field. Geographic area will also determine the cost of professional advice.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Lawyers\"><\/span>Lawyers<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finding the right lawyer early is a critical task for you. Lawyers who can meet your needs should possess several key qualities. Among the most important are honesty experience in your field and availability. Keep looking until you find a lawyer you can trust and be comfortable with.<\/p>\n<p>A good honest lawyer will tell you if you are \u2018out of his principal line of practice and may refer you to another who can do a better job for you. Choose a lawyer who has the time and willingness to sit down and talk with you or to discuss a legal problem over the telephone when you need him. If you keep calling your lawyer only to be told that he will get back to you and if he does so days or weeks later find another who appreciates your business and has the time to do justice to your needs. A great lawyer you can\u2019t reach is worthless.<\/p>\n<p>Closely related to availability is dependability. Make sure your lawyer can follow through on your problems. Lawyers are selling a service just as you and other business owners are. If he can\u2019t provide his service on time and in good order at a price consistent with its value find one who will.<\/p>\n<p>Make certain you understand your attorney\u2019s fee schedule since this is the biggest area of misunderstanding between clients and lawyers. It is best to have that agreement in writing. Generally lawyers who are experts in business cannot be retained inexpensively. If you want excellent legal advice you must be prepared to pay for it.<\/p>\n<p>Once you have established a firm relationship with a good lawyer you will have found an invaluable tool.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Accountants\"><\/span>Accountants<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A good accountant will be your most important single outside advisor. The services of a lawyer and consultant are vital during specific periods in the development of your business or in times of trouble but your accountant will have the greatest impact on the ultimate success or failure of your business.<\/p>\n<p>Once you are in operation you will have to decide whether your volume warrants a full-time bookkeeper an outside accounting service or merely a year-end accounting and tax-preparation service. Even the smallest unincorporated businesses employ an outside public accountant to prepare their financial statements.<\/p>\n<p>When you borrow money your bank manager will want to see your balance sheet and your operating statement. If these have been prepared by a reputable public accountant they will have more credibility than if you prepared them yourself. (If you are borrowing less than $500 000 most banks will accept unaudited financial statements prepared by a public accountant.)<\/p>\n<p>Public accountants must meet certain proficiency levels in order to be licensed by the state in which they practice. This does not ensure that an independent business accountant will automatically do a good job for you but it does narrow your chances of running into an unqualified accountant.<\/p>\n<p>If you are organizing a corporation your accountant should counsel you in the start-up phase in order to determine the best approaches for your tax situation and if you are starting as a sole proprietor or in a partnership you\u2019ll want the accountant to set up a bookkeeping system you can operate internally.<\/p>\n<p>Experienced independent accountants will usually be familiar with accounting problems peculiar to your business and will be able to advise and direct you wisely. Before the calendar year ends always ask him to organize your records for the tax year coming to a close.<\/p>\n<p>Ideally an accountant should help organize the statistical data concerning your business assist in charting future actions based on past performance and advise you on your overall financial strategy with regard to purchasing capital investment and other matters related to your business goals. Today however much of the accountant\u2019s time is spent keeping the business owner in substantial compliance with the shifting interpretations of the laws and regulations.<\/p>\n<p>Accountants specialize in legal requirements that affect you. This is why you need their services if you expect to succeed as a small-business operator. By spending your time finding answers to perplexing questions accountants can answer more efficiently you will not have the time to manage your business properly. Spend your time doing what you do best not trying to do your own accounting.<\/p>\n<p>Where do you find a good accountant? Ask other small-business owners your banker or your lawyer for recommendations. How much does a good accountant charge? Their fees like those of lawyer\u2019s doctors and other professionals vary widely. A small-town accountant in business for himself may charge $60 and up per hour while some of the large nationally known firms might charge $100 to $250 per hour or more for their personnel.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Business_Consultants\"><\/span>Business Consultants<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When you have a medical problem you go to a doctor. When you have a legal question you see an attorney. But most people jump headlong into a business venture often pouring in their life savings without so much as a thought of submitting their business plans (if they even have such plans) to a competent business consultant for analysis. So enthralled are they with their ideas that like horses with blinders they see only straight ahead to their goals and not to the side where unrecognized perils may await.<\/p>\n<p>Experienced businesspeople are as apt as neophytes to overrate their own ideas. Enthusiasm is dangerous to both because it encourages them to rush ahead. Careful planning is a necessary evil in any business venture. Such planning should be based on an unbiased analysis designed to uncover potential failure factors. Keep enthusiasm in check and follow a cautious rational path.<\/p>\n<p>Entrepreneur strongly believes in the value of seeking qualified outside opinions and demanding that consultants tear apart a businessperson\u2019s plans in every possible way. Only in this way can entrepreneurs see objectively both pitfalls and promises in their business ideas.<\/p>\n<p>Take some good advice from the legal profession: Don\u2019t depend on yourself for counsel when the objective approach of an expert is called for. It\u2019s been said that \u201cthe man who acts as his own attorney has a fool for a client.\u201d<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Finding_a_Qualified_Consultant\"><\/span>Finding a Qualified Consultant<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Business and management consultants are not restrictively licensed like doctors and lawyers. Anyone can hang out a shingle and claim to be a consultant, for this reason demand proof of a consultant\u2019s expertise before retaining his services. Request professional and bank references and check them out. Make sure the consultant can prove practical experience in managing and operating businesses the more varied the better.<\/p>\n<p>Although highly paid consultants are available in many fields relating to specific areas affecting your business it is probable that the consultant best able to advise you is one who is already successful in the same business. Find a successful business in another part of town or a nearby city one that will not be in direct competition with you and ask the owner or manager to analyze your plans.<\/p>\n<p>Since poor location and ineffective advertising are among the most common reasons for business failure you will want these aspects of your plans addressed with particular care. Offer a good feein keeping with your geographic area the experience of the consultant and the complexity of the problems you are asking him to study.<\/p>\n<p>Consulting fees range from a low of $25 to more than $100 per hour. Some consultants contract by the hour others by the day. In addition you can expect to pay their out-of-pocket costs such as travel or telephone bills related to the work you&#8217;re having them do. Less than 20 percent of professional consultants in the nation report they are fully booked. That means the field is competitive so keep looking until you are satisfied the consultant you choose can do the job for you at a reasonable cost.<\/p>\n<p>Whatever this cost turns out to be it is definitely worth paying. Don\u2019t hesitate to take this important step before you start any business. Remember to ask for a negative-stressed analysis with key success factors clearly stated.<\/p>\n<p><strong>PROFESSIONAL CONSULTANTS\u2019 AVERAGE DAILY BILLING RATES \u00a0\u00a0\u00a0 PER 8-HOUR DAY<\/strong><\/p>\n<p>Field Typical Average Range from Billing Rate Lowest 10% to Highest 10%<\/p>\n<table style=\"width: 466px;\" border=\"0\" cellspacing=\"0\" cellpadding=\"0\">\n<colgroup>\n<col width=\"222\" \/>\n<col width=\"244\" \/> <\/colgroup>\n<tbody>\n<tr>\n<td class=\"xl65\" width=\"222\" height=\"25\">Accounting<\/td>\n<td class=\"xl66\" width=\"244\">455 to $1 818<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Advertising<\/td>\n<td class=\"xl66\">517 to 1903<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Business Acquisition\/Sales<\/td>\n<td class=\"xl66\">421 to 1626<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Communications<\/td>\n<td class=\"xl66\">320 to 981<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Construction<\/td>\n<td class=\"xl66\">625 to 1355<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Data Processing<\/td>\n<td class=\"xl66\">531 to 1352<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Dental\/Medical<\/td>\n<td class=\"xl66\">534 to 1551<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Design (Industrial)<\/td>\n<td class=\"xl66\">473 to 826<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Economics<\/td>\n<td class=\"xl66\">560 to 1306<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Finance<\/td>\n<td class=\"xl66\">501 to 1667<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Franchise<\/td>\n<td class=\"xl66\">480 to 1222<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Fund Raising<\/td>\n<td class=\"xl66\">423 to 1045<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Graphics\/Printing<\/td>\n<td class=\"xl66\">411 to 1081<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Insurance<\/td>\n<td class=\"xl66\">397 to 1105<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Management<\/td>\n<td class=\"xl66\">428 to 1558<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Marketing<\/td>\n<td class=\"xl66\">431 to 1703<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">New Business Ventures<\/td>\n<td class=\"xl66\">293 to 1221<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Pension<\/td>\n<td class=\"xl66\">533 to 1252<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Personnel<\/td>\n<td class=\"xl66\">401 to 1209<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Production<\/td>\n<td class=\"xl66\">602 to 1240<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Purchasing<\/td>\n<td class=\"xl66\">425 to 1216<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Quality Control<\/td>\n<td class=\"xl66\">483 to 1201<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Records Management<\/td>\n<td class=\"xl66\">291 to 941<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Retail<\/td>\n<td class=\"xl66\">356 to 1284<\/td>\n<\/tr>\n<tr>\n<td class=\"xl65\" height=\"25\">Security<\/td>\n<td class=\"xl66\">377 to 1187<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong>Source:<\/strong> \u201cThe Annual Survey of the Economics of the Consulting and Training Profession,\u201d May 1987 issue of The Professional Consultant &amp; Seminar Business Report published by Howard Shenson. Woodland Hills Cali-ferried<\/p>\n<h2 align=\"center\"><span class=\"ez-toc-section\" id=\"LICENSES_AND_TAXES\"><\/span>LICENSES AND TAXES<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"LICENSES_AND_PERMITS\"><\/span>LICENSES AND PERMITS<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Most cities and counties require business operators to obtain various licenses or permits to show compliance with local regulations.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Business_License\"><\/span>Business License<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>City business-license departments are operated as tax-collecting bureaus and do not perform any public service. You simply pay a fee to operate your business in that city. In addition to the license fee some cities receive a percentage of your gross sales.<\/p>\n<p>When you apply for a license it will probably be processed through the planning or zoning department which will check to make sure the zone covering your property allows the proposed use and that there is enough parking places to meet the code. You should not encounter many problems if you are opening your business in an existing structure that previously housed a similar business.<\/p>\n<p>You will not be allowed to operate in an area not zoned for your business unless you first have a variance or conditional- use permit (explained in \u201cZoning Ordinances\u201d). But before you knock yourself out to obtain this authorization see how far up through the bureaucracy you can go. Remember that many bureaucrats may not be genuinely familiar with the laws they administer. Ask the same question of three license clerks and you may receive three different answers.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Fire-Department_Permit\"><\/span>Fire-Department Permit<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Many fire departments require your business to obtain a permit if it uses any flammable materials or if your premises will be occupied by customers or the public at large. In some cities you must secure a permit before you open for business. Other jurisdictions don\u2019t require a permit, instead periodic inspections of the premises are scheduled to see if they meet regulations. If you have not they will issue a citation.<\/p>\n<p>Air and Water Pollution Control Permit Many cities now have departments that supervise the control of air and water pollution. If you buy any material discharge anything into the sewers or waterways or use gas-producing products (such as paint sprayers) you may be required to obtain a special permit from this department of your city or county.<\/p>\n<p>Environmental-protection regulations may require you to obtain approval before construction or operation. Check with your state agency regarding federal or state regulations that may apply to your business.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Sign_Permit\"><\/span>Sign Permit<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Recently many cities and suburbs have instituted sign ordinances that restrict the size location and sometimes the lighting and type of sign used. Landlords may also impose their own restrictions, these are likely to be most stringent in a mall. To avoid costly mistakes be sure to check regulations and secure the written approval of your landlord before you invest in a sign.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"County_Permits\"><\/span>County Permits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Many times county governments require essentially the same types of permits and licenses that cities require. These apply to commercial enterprises located outside city limits. Educate yourself about county ordinances that apply to your business if you locate outside a city or town\u2019s jurisdiction. County regulations often are less strict than those of adjoining cities.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"State_Licenses\"><\/span>State Licenses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Many states require a license or occupational permit for persons engaged in certain occupations. Often these persons must pass state examinations before they can conduct business. Licensing is commonly required for workers in the following occupations: auto mechanics plumbers electricians building contractors collection agents insurance agents real-estate brokers repossesses and those providing services to the human physique (barbers cosmetologists doctors nurses etc.). Your state government can provide a complete list of occupations that require licensing in your state.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Federal_Licenses\"><\/span>Federal Licenses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A few businesses\/businesspeople require federal licensing including meat processors common carriers radio and television stations and investment advisory services. The Federal Trade Commission can tell you if your business will require a federal license.<\/p>\n<p>The Department of Transportation via the National Highway Traffic Safety Administration requires tire dealers to record and register tire serial numbers. Most invoice forms are set up so that there is a tear away inside where the customer\u2019s DOT number is entered. This tear away card is sent to the NHTSA. The purpose of recording this number is to identify any tires that may be subject to recall.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Zoning_Ordinances\"><\/span>Zoning Ordinances<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If you locate your tire dealership in an existing structure previously used for commercial purposes zoning regulations in most cases will not be a problem. However if a new facility will be constructed an existing building used for a purpose different from what it was originally intended or extensive remodeling is required local building and zoning codes should be carefully checked. If zoning regulations do not allow operation of the type of business you wish to open you may file for a zoning variance a conditional use permit or a zone change.<\/p>\n<p>A variance or conditional-use permit grants you the privilege (conditionally) of operating a business on land not zoned for that purpose. The filing fee may be as high as $1 200 and it may take 90 days or more before you get a decision. A zone change on the other hand amounts to a permanent change in the way a particular area is zoned and therefore in the way it will be used long into the future. It involves a lengthy procedure6 months or more of filing a petition with the city planning commission issuing notice presenting your case at public hearings and finally getting the city council or other governing body to make a decision.<\/p>\n<p>In some cases any change in land use whether permanent (by zone change) or temporary (by variance or conditional-use permit) will require environmental clearance. Local planning or zoning departments can tell you whether your project is exempt from the law or whether you should seek a negative declaration from its regulations. If your project will displace residents generate a lot of traffic or impact natural habitat some municipalities will require you to prepare an environmental-impact report. This can be a costly and time-consuming procedure for which you will need expert help.<\/p>\n<p>If your request for a zoning variance or change is approved many restrictions still apply. In addition to meeting local building codes you will probably be required to observe minimum setbacks at the front side and rear of the structure, maximum floor space in relation to land area, maximum heights, minimum provisions for parking, and other factors. We cannot generalize on this subject since each government entity has its own specific policies.<\/p>\n<p>Essentially zoning is a way of ensuring that the community\u2019s land uses are properly located in relation to each other that adequate space is available for each type of development that the density of development in each area is in proper proportion to the development of such facilities as streets schools recreational areas and utility systems and that the development is sufficiently open to permit light air and privacy for persons living and working within the area.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Other_Regulations\"><\/span>Other Regulations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In addition to licenses and permits other regulations may apply to your business. Federal and state laws designed to encourage competition prohibit practices such as contracts combinations and conspiracies in restraint of trade, they prohibit discrimination in price between different purchasers of commodities similar in grade and quality that may injure competition. They make unlawful \u201cunfair methods of competition\u201d and \u201cunfair or deceptive practices.\u201d<\/p>\n<p>The term deceptive practices refer to false advertising misrepresentation simulation of competitive products and bad-mouthing competitors. Even on violations by a manufacturer or distributor a retailer may be considered equally guilty if he knowingly accepts an illegal concession offered by the vendor.<\/p>\n<p>Any firm conducting business across state lines is subject to federal regulations usually those of the Federal Trade Commission (FTC). Any business that advertises in more than one state is subject to FTC regulations. Even the smallest mail order business comes under FTC jurisdiction.<\/p>\n<p>A fairly common statute forbids the sale of any article at less than the seller\u2019s cost if the intent is to injure competitors. Other laws deal with \u201cbait-and-switch\u201d selling withholding appropriate refunds on deposits made by customers misrepresenting warranties and guarantees and quality requirements for certain products.<\/p>\n<p>Because of the complexities of these regulations and the penalties imposed for violations it is essential that you consult a lawyer if your business may be subject to them.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>FINANCIAL MANAGEMENT You must regard capital as a business tool requiring skilled use. All money invested in your business whether in fixtures equipment stock or operating expenses should yield a profit. Because of the risks you incur by going into business for yourself this capital should yield a higher rate of return than could be [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":655,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[20],"tags":[],"class_list":["post-589","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","has_thumb"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Financial Management for a Tire Shop - Tire Reviews, Buying Guide &amp; Interesting Facts - Utires.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.utires.com\/articles\/financial-management-for-a-tire-shop\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Financial Management for a Tire Shop - Tire Reviews, Buying Guide &amp; Interesting Facts - Utires.com\" \/>\n<meta property=\"og:description\" content=\"FINANCIAL MANAGEMENT You must regard capital as a business tool requiring skilled use. 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