Scholl & Company, LLP - March 2021

Scholl & Company, LLP - March 2021

YOUR FINANCIAL SUCCESS

MARCH 2021

SCHOLLCOMPANY.COM

831-758-5966

Around this time last year, we all experienced a perfect storm. As we progressed through what we thought was going to be a regular tax season, mid-March brought business shutdowns, school closures, and massive actions out of Congress to try and help business owners and families. For our team, the result was an all-hands-on-deck approach. COVID-19 and the subsequent changes it brought with it required us to prepare to manage whatever happened. We were helping clients who were trying to navigate business closures, an expanded tax season, and government computers that didn’t update and couldn’t reflect the current extension. It was a day-to-day adjustment. We just didn’t realize how beneficial this experience would eventually be. Like many offices, Scholl & Company went remote in March 2020. Our workers stayed home, and we did our part to slow the spread of the virus. This experience came in handy in August, when wildfires ravaged California. Our office had to evacuate and work scattered across safe zones. (I personally had to evacuate, as well. The fires ran right up to my neighbor’s back fence.) We finally returned to our offices in September, but three months later, right after the holidays, we walked into the Scholl & Company office to find 3 inches of water across the floor. Turns out, a water pipe burst. HARNESSING LUCK Reflecting on a Year of ‘Unlucky’ Circumstances

frustrating, but we had already experienced this headache just a few months ago. We knew how to manage it. Anyone could look at these experiences and think we have had a terrible bout of bad luck, and while I agree there are situations that are lucky or unlucky, I don’t fully believe that luck has anything to do with success or failure. The actions you take today put you in a position to better confront what happens in the future. It was bad luck that we had to evacuate our office three times in 2020, but we were more prepared with each closure. (Plus, when we come back this time, we will have a new office.) You’re not always going to have control over what happens to you, but how you react is completely up to you. The pandemic and the subsequent shutdowns that followed — especially for those who had to close permanently — were bad luck. But when presented with these situations, it’s our responsibility to evaluate. How can you improve from here? What’s the lesson? What is necessary, and what isn’t? I’d argue that for as troublesome and hurtful as this pandemic has been, it’s also been a learning experience for many business owners. Some of our very own clients have learned that they can thrive with a remote workforce or that certain products are unnecessary. Some have found better technology options. In the end, they are more efficient and effective. This pandemic pressured us to change and to grow. At Scholl & Company, we already saw the benefit of this when we had to navigate other moments of “bad luck.” But ultimately, our responses were effective and seamless. And if that’s not good luck, then I don’t know what is.

Talk about curveballs.

Yet, in those moments, I was grateful for the experience we had in March 2020. We learned how to adapt to a remote format, and as a result, these evacuations and office construction have done little to affect our clients, if at all. It’s

BUSINESS IS GREAT AND WE'RE LOOKING FOR MORE.

We hope that you will keep us in mind if the opportunity arises to refer family, friends, colleagues, and neighbors. Thank you for your continued support.

Good luck!

1 SchollCompany.com

2 Things You Need to Know This Tax Season

As we approach the deadline for tax season, our team has found some patterns. In an effort to better prepare you for your accounting outlook, we’ve compiled two reminders that all our clients could benefit from remembering.

Tax planning doesn’t only have to happen now.

As Benjamin Franklin once said, “In this world, nothing can be said to be certain, except death and taxes.” Whether you’re a small-business owner or an individual employee, retiree, or stay-at-home parent, tax season is always looming over us at the beginning of every year. As Form 1040s and W-2s make the IRS much more apparent to us every year, many business owners and individuals consider the ways in which they can make next year’s taxes — and, in some cases, this current tax season — simpler, more beneficial, and streamlined. Our goal at Scholl & Company is to do just that. We stay educated on the latest tax laws, regulations, and codes so we can help our clients position themselves in the best spot possible for tax season. However, we have noticed a trend. Tax planning tends to happen about once every year, and it’s usually done from a reactive standpoint. For example, something happened or something was missed, and now we are having to respond rather than prepare. Our most successful clients at Scholl & Company tend to tax plan from a proactive approach rather than responding to what happens each season. So, we have tax planning calls with these clients 3–4 times each year. Now, we know talking about taxes at least once each year is enough for most people, but tax season can be simplified when we approach it holistically throughout the year.

Consider a “tax season resolution” this year and vow to tax plan throughout 2021 rather than just at this time. If you’re ready to do that, call our team today, and we can create a plan.

Don’t defer regular accounting practices.

Business owners are busy; the last thing they want to think about is proper accounting practices. That’s where we come in. Our job at Scholl & Company is to make accounting, tax season, and your financial decisions easier. As busy as business owners usually are, social changes and new laws have been just as active in the past year, which makes small-business accounting much more complex for many of our clients. Just this past year, small businesses have had to contend with lockdowns, rapid tax law changes, and pandemic funding directly from the government.

That’s a lot to change on the books.

Our best advice to combat this is to stop deferring regular accounting practices. Continually and regularly account for changes and updates as they happen, rather than waiting until these updates need to be added. This can make your records current, accurate, and proper, which goes a long way in your growth and understanding where you currently stand. Furthermore, when clients don’t have these items up to date on the books, they run the risk of spending more money with our firm than they need to. As much as we appreciate the business, we hate the idea of our clients using more of their hard-earned money for our services than should be required. We can help you better understand and prepare your books to be better reflections of your company’s health on a continual basis. Just give us a call today, and we’ll get started.

2

831-758-5966

A CONSTANT EDUCATION WHY SCHOLL & COMPANY’S EMPLOYEES CONTINUE LEARNING EVERY DAY

If there’s one thing Scholl & Company founder and CEO Bret Scholl expects of his team, it’s an appreciation for education.

“I want everyone always learning,” Bret says. “I don’t want anyone learning only about taxes and

accounting. It also has to be about dealing with people, finances, political perspectives in the economy, micro and macroeconomics — it has to be broad because we end up touching so many pieces.” Whether they work specifically on client accounts (like the firm’s newest CPA, Michael Arensdorf) or they help the practice grow and run smoothly (like Director of Practice Development Jaclyn Aiello), each member of Scholl & Company is always growing.

“I would say I’ve definitely learned a lot,” Michael says about his tenure at Scholl & Company.

One of the most important aspects of his education, Michael explains, is working with someone like Bret. For Michael, this partnership with Bret means he has an experienced CPA right in this very office who can help him navigate unexpected challenges or problems that come up. Bret often acts as a mentor since his years of experience and knowledge have helped him gain insight into the ever-changing world of accounting. “When we’re not remote, I pop into his office 2–3 times per day to strategize and get his insight,” Michael says, “because what I’ve learned as a CPA, there are unique clients and sets of circumstances, and someone like Bret has seen most of those scenarios.”

3

831-758-5966

For Jaclyn, that’s vital. Jaclyn came to Scholl & Company with a marketing background, but she was new to financial work. From the moment she was hired, Jaclyn made it her goal to ensure she can help every client who calls with questions. Even if she has to pass their questions on to someone else, Jaclyn wants to ensure the client is heard and receives a prompt response. “Bret encourages us to train on services that are client- based,” says Jaclyn, whose extensive background in marketing has been bolstered by a commitment to learning more about financially-focused services since joining the firm. “I really take it on myself to make sure we’re giving our clients the best possible situation when they work with us.” One of Jaclyn’s favorite parts of her job is the way she and the rest of the team are encouraged to learn more. Bret allows his team to decide what they need to learn, Jaclyn explains. That encouragement from Bret has empowered the team to continue to seek out more opportunities to learn and better their engagement with clients. The camaraderie and focused commitment to being better together is a powerful component to the strength of Scholl & Company’s team. “We’re never done learning,” Jaclyn says. “We’re never done becoming better individuals and employees … As a team, we’re only as good as our weakest link, so we always make sure we’re bettering ourselves.”

I DON’T WANT ANYONE LEARNING ONLY ABOUT TAXES AND ACCOUNTING. IT ALSO HAS TO BE ABOUT DEALING WITH PEOPLE, FINANCES, POLITICAL PERSPECTIVES IN THE ECONOMY, MICRO AND MACROECONOMICS — IT HAS TO BE BROAD

BECAUSE WE END UP TOUCHING SO MANY PIECES.

In addition to passing four rigorous exams in 18 months to become a licensed CPA, Michael and Bret are expected to complete 80 hours of continuing education every two years in order to maintain their licensure. However, Bret’s expectation is that he and Michael will do more than meet the requirement. “Not only do we never stop learning, but things also change pretty much every year,” Michael says. “I probably do closer to 120 [hours] every year.” As he’s continued to develop his craft, Michael has learned that being a knowledgeable CPA is less about being able to rattle off tax codes and more about having the knowledge to know where to look for the answers to complex tax questions and issues. Having a small team that’s also dedicated to learning and improving their craft makes this feat much easier. “We’re a pretty small firm, so everyone has to wear multiple different hats,” Michael says, further explaining that an employee like Jaclyn, who is not an accountant, can still offer valuable guidance to the firm’s clients and help the accounting team stay organized.

4 SchollCompany.com

What Can a Netflix CEO Teach You About Business?

If you ask Marc Randolph about his favorite place, he’ll mention an office building in Dallas, where Blockbuster had its corporate headquarters on the 27th floor. Randolph, one of the founders of Netflix and its first CEO, has no illusions about what happened to the former retail giant. In his new book, “That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea,” Randolph shares how Netflix disrupted an industry and took the world by storm, an example every business leader can learn from. Randolph himself is fascinated by the nuts and bolts of business and entrepreneurship: “How does your business test new ideas? Can it happen faster? What’s the cost of having sloppy content hit the internet if it gets you out there sooner?” He examines how quickly you can put an idea in front of a customer where “you will learn more than you could in five months of R&D.” Randolph addresses these issues and more in “That Will Never Work,” all the while explaining their relevance to entrepreneurs. If you’re looking for more salacious details, he spends much of the first chapter debunking the stories about who had the idea for Netflix and whether or not it was an epiphany. “That story is beautiful,” Randolph writes. “It’s useful. It is, as we say in marketing, emotionally true. But as you’ll see in this book, that’s HAVE A Laugh

not the whole story.” The whole story is one we’ll let you read for yourself, and there is plenty more where that came from.

Anybody can research Netflix online, but “That Will Never Work” is a rare glimpse into the inner workings of one of the 21st century’s most lucrative and secretive companies. Juicy stories pair well with marketing lessons, and the writing style is easy to get lost in — it really is a page-turner.

Corn Dogs for All

The Development of National Corn Dog Day

National Corn Dog Day began in March 1992 when two Corvallis, Oregon, high school students needed a snack while watching a basketball game. They got some corn dogs and called it good. But somehow, this simple snack and sport pairing turned into something huge. Though it’s not clear how, it spread across Oregon and eventually the rest of the country. It’s likely that people just heard about it from friends and family

and thought it was a great idea. In 2012, in honor of the original Corn Dog Day, the then-governor of Oregon issued an official proclamation naming March 17 National Corn Dog Day in the state. Today, it’s celebrated with thousands of events every March. An article printed in The Oregonian in 2009 revealed that National Corn Dog Day parties have been celebrated on nearly every continent — including Antarctica!

5 SchollCompany.com

18275 Meadow Song Way Corral de Tierra, CA 93908 831-758-5966 schollcompany.com

Inside This Edition

1.

You Have More Control With Luck Than You Think

2.

Keep These 2 Tips in Mind This Tax Season

3.

Employee Perspective: The Value of Scholl & Company’s Education Netflix’s CEO on Pursuing Your Ideas Where Does National Corn Dog Day Come From?

5.

6.

Boost Your Profits in 2021

As if 2020 was not already hard enough, its lasting impacts are going to make sales evaluation a lot harder this year. Brick-and-mortar sales fell 14% last year — a number that even the big increase in online sales just couldn't make up — leaving us with a 10.5% drop in sales overall. What does that big picture mean for your sales team? Should you measure 2021 against 2019? Focus on pre-pandemic projections for the current year? Throw your arms in the air and let the sales crew do whatever they want? First things first: Make sure your sales have stabilized. If you’re not starting to see sales climb again, you need an attack plan to meet your weekly numbers where they’re at. Evaluation is important, but you have to stop the ship from sinking first. Once you’re stable, you can take the next step and run the numbers. What kind of year did your business have in 2020? For many, it was worse than previous years, but some industries saw increased business. If you’re one of those lucky few, your plan is going to look a lot different. Remember, sales numbers are just part of the puzzle. You also need to look at productivity, profits, losses, and more to put together your own big picture. This is when you’ll see if your old metrics are still relevant or if you need a different way to look at 2021. Boost Your Profits in 2021 By Rating Your Sales Team

Then, set up your sales targets for the year. Your first leads should be those who canceled or stopped participating with your business last year. Past clients cost less to reactivate than new ones. It often just comes down to how you incentivize them. This is also a good time to question whether your traditional “ideal client” still looks the same as before the pandemic. Economic downturns are rough, but every time, some businesses bounce back stronger. They often attribute this success to changing tactics on a number of key issues and freeing up resources (especially sales personnel) to tackle new areas of interest. Finally, examine your sales team. It can be unpleasant, but is there anybody you wish wasn’t there? Low performers make everyone look like amateurs. The second half of this process is asking yourself, “How can I incentivize the right sales people?” Make them happy, and you’ll be happy.

6

831-758-5966