Scholl & Company - November 2020

Scholl & Company - November 2020

YOUR FINANCIAL SUCCESS

NOVEMBER 2020

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LOOKING AHEAD What We Learned in 2020

There’s been a lot of talk about this year. Historical wildfires here in California, a pandemic that has plagued the globe, and a tumultuous election season all make it feel like we’ve been dealt one blow after another, and I think it’s safe to say many of us are tired of hearing about it. But if you could indulge me for just a moment, there is so much more to be said about this year. Yes, it was difficult. It was a strange year for business owners, and for those of you in the restaurant and travel industries, this year may have been a nightmare. But I believe some good has come out of the adversity of 2020. I’ve observed that very thing in my employees. Every single one of my employees jumped into their work this year and remained flexible. When the Payment Protection Program (PPP) loan details were changing for the 100th time, they rolled with the punches. They spent countless hours on the phone with clients, walking them through digital forms and tax returns. It was a whole team effort for us to ensure that our clients’ needs were met and that they felt secure and supported as they planned for an uncertain future.

For myself — and I’m sure other business owners — this year has been a case study on the value of human capital. I don’t just mean stockpiling employees into your business. I mean having the right, hardworking, diligent staff members on your team when a crisis hits. Your team is first and foremost to your success, and sadly, that point was not readily deployed in the hiring process prior to 2020. I believe this pandemic and countless other obstacles have taught us that the people who support our business make us successful. But finding the right people to fill your business with is one thing; training and investing in their success is the other part of this lesson. As the PPP loans changed and adapted every hour — or so it felt — we had to cultivate in- house experts immediately. We had to invest in the education, training, and expertise of our team to ensure we were meeting the needs of our clients and truly serving as their partners. That investment shaped our ability to serve our clients. Now is not the time to forget about this year. It’s the time to think critically about what you learned in 2020 and

consider the changes you can make in your business to better prepare for your future and potential crises. Remember the 80/20 rule — 80% of your outcomes result from 20% of your input. The work you do today could pay big dividends in 2021 and beyond. As we prepare to celebrate Thanksgiving, I can’t help but feel gratitude for my team, the clients who continue to trust us, my family, and my health. When I look back on this year, I’ll certainly remember the turmoil, but I’ll also remember everything we accomplished and what we learned. I hope you can do the same. If we can help you prepare for 2021 and your future, please let us know. After all, your success is our success.

BUSINESS IS GREAT ANDWE'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.

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Your Questions Answered Navigating PPP Loan Forgiveness

For many business owners, the funds they received from this spring’s Payment Protection Program (PPP) loans ensured their employees were paid and their businesses could push through COVID-19 without major layoffs or business loss. It was a relief in an otherwise difficult moment in time. Still, PPP loans were anything but easy! We all breathed a sigh of relief with the loan process slowed down, but the foot isn’t off the gas just yet. As we continue to navigate this unprecedented time, we’re answering your biggest PPP loan forgiveness application questions . Note: As we learned this spring, the PPP process is constantly changing. Be prepared for adjustments and new regulations. We’ll notify you as soon as possible when this happens. Is there a deadline to apply for forgiveness? Debt can feel like a looming cloud over an otherwise successful business.

Many business owners may want to pay off this debt as quickly as possible or ensure they can meet the requirements. But don’t let this stress overshadow the biggest point of this process: There is currently no deadline on PPP loan forgiveness applications. There will be a required payment about 10 months after the end of your loan period, but without a loan forgiveness application deadline, we can continue working on this paperwork while other gray-area matters (see below) are sorted out. What is deductible from taxes? Here’s where the process continues to be complex. PPP loans that are forgiven are not taxable, but the IRS has said that no tax deduction is allowed for an expense that would be deducted if the payment results in the forgiveness of a PPP-covered loan. The belief is that this would create a “double-dipping” effect on tax payments. Our team supports our national professional organization AICPA and hundreds of others in urging Congress to allow full deductions for

PPP-related business expenses, but no action has been taken by lawmakers yet.

Is there a blanket option? Discussions are still ongoing, but

there is a common blanket threshold of $150,000 and below for overall forgiveness. Most PPP loans were under $150,000 or less, and many lawmakers are pushing for a more streamlined forgiveness process of those loans. That has yet to be concrete. Our team is regularly following PPP loan forgiveness options and sharing them with our clients, but if you would like a more detailed follow-up, please call 831-758-5966.

‘Dare to Lead’ With Brené Brown’s Bestselling Book

How many leaders do you know who will admit to their mistakes openly and honestly to their team? How many leaders have you heard ask their team for direction? How many leaders are willing to step aside so someone else can shine?

leadership looks like. Together with her research team, she learned why certain workspaces thrive and grow while others, with seemingly just as powerful of ideas, wither and die. And it all boiled down to one thing, Brown says: courage.

Brown exposes how business cultures that don’t practice vulnerability are ineffective as a result. She theorizes that often, these workspaces are filled with fear, uncertainty, and scarcity. To remove these negative traits, Brown offers leaders a road map to build their courage while practicing vulnerability and creating happier work environments. Brown has spent the past two decades researching and breaking down emotional concepts into tangible goals for her readers and followers. She is the owner of The Daring Way, a consulting firm that helps businesses develop vulnerability in leadership and the workplace. She is also the host of the podcast “Unlocking Us” and has one of the most-watched videos of all time, “The Power of Vulnerability.” You can learn more about Brown’s work and find “Dare to Lead” at BreneBrown.com.

Chances are if you know that leader — or if you are that leader — then you understand the future of leadership, according to author, researcher, and teacher Brené Brown, Ph.D., author of “Dare to Lead: Brave Work. Tough Conversations. Whole Hearts.” In this book, Brown details her seven years researching and gaining a

In “Dare to Lead,” Brown examines the four pillars of courageous leadership and how business leaders today can practice and perfect it. Brown teaches the four pillars through her consulting work and has seen radical changes in organizations that practice courageous leadership. Brown offers examples — from

well-known CEOs and within her own business — to walk

better understanding of leadership. She interviewed business leaders at both small and large companies, asking questions that revealed what great

readers through real-life applications of courage and how to create stronger teams through vulnerability.

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Scholl & Company’s Jaclyn Aiello Explains the Impact of Our Scholl Cares Program ‘DO GOOD, BE GOOD, FEEL GOOD’

When Jaclyn Aiello first started at Scholl & Company as the director of practice development, founder Bret Scholl asked her what organizations she was passionate about. As someone who grew up volunteering in the Monterey County community, Jaclyn had a special place in her heart for nonprofits and was thrilled to learn about her new employer’s philanthropic program, Scholl Cares. “My family has been part of this community for generations, so it was an absolute delight when I learned this was an aspect of my role,” says Jaclyn, who organizes the Scholl Cares events. “The whole mantra of Scholl Cares is ‘Do Good, Be Good, Feel Good” which, to me, means getting out there, physically participating, and genuinely feeling

call without blowing your budget. Start with lighting. Shine a lamp toward the wall facing you, and turn on a light behind you to softly illuminate your face while creating background light for depth. Good sound quality can be just as simple to achieve. Rather than rely on your computer or laptop’s microphone system, plug in your AirPods or headphones. These items have built-in microphones that better capture your voice due to their proximity to your face. Tip No. 2: Get the camera angle right. Aesthetically speaking, one of the worst angles for a camera is pointed upward at the subject being filmed. However, you’re often looking down at your laptop or monitor’s camera. Instead, stack your laptop on books or risers for meetings, or purchase a separate camera to mount at eye level One event the team at Scholl & Company looks forward to sponsoring each year is the Christmas event for La Casa Adult Day Health Center, which includes Christmas carols, a visit from Santa, and treats from La Plaza Bakery. Best of all, the team gets to interact with guests and their families! Another organization is the Gen Giammanco Foundation, which honors Jaclyn’s friend Gen for her incredible spirit and athleticism. Scholl Cares donates to this foundation, which provides scholarships to local student- athletes who might not otherwise be proud of the positive impact you are having on the community.” Today, Scholl Cares supports numerous nonprofits in the region. Each one is representative of the Scholl & Company team’s passions. “There are causes we give back to year after year,” Jaclyn explains. “But if there’s ever a specific need in the community, we’re always willing to shift our attention and efforts … Bret is a huge advocate for community service, and he sits on multiple boards.”

or just above you. This is a much more flattering and commanding angle. Ti p No. 3: Look again. In the moments leading up to a video call, remember to do two things. For starters, quickly scan the background behind you. Will your prospective clients see anything unflattering or unduly distracting? A simple background, like a plain wall or a bookshelf, is great for bringing attention to you and not what’s happening in the background. And before you join that meeting, rehearse looking into the camera as you speak, not at the screen itself. That will create eye contact for those in the meeting. You don’t have to be an Oscar-winning filmmaker to master these techniques. All it takes is a little practice to upgrade your video sales call. Scholl & Company encourages the community to choose a nametag from their Holiday Giving Tree any time after Thanksgiving. Nametags are also able to be set aside for those unable to come into the office, and gifts are due by Dec. 18. If you would like to learn more about Scholl Cares or to help with our Giving Tree, please call Scholl & Company at 831-758-5966. Thank you for your commitment to helping others! able to afford higher education in honor of this incredible young athlete. The most notable event — and one that encourages client participation! – is the Holiday Giving Tree, which helps the family recovery community, Pueblo Del Mar. Clients who come to the Scholl & Company office around the holidays can see a large Christmas tree in the firm’s lobby that’s been decorated with nametags, each one representing the wish list of a child in the recovery community. “We make it our mission to fulfill every wish on that tree with the help of our clients, friends, and families,” Jaclyn says.

JACLYN WITH HER NEPHEW, BENJAMIN JACK

Mastering the Video Sales Call With Filmmaker Expertise As we continue to adapt to a half-

digital, half-physical world, one thing is certain: This is our new normal. And in the business world, you adapt or you die. While in-person sales meetings and lunches will never be a thing of the past, mastering the video sales call to present yourself, your company, and your product is vital. After all, you want the most memorable part of your call to be the product you’re pitching — not your cluttered background or the tinny sound. To appear like a pro, try these three tips from filmmakers to make your video calls the envy of your competition. Tip No. 1: Use what you have. While moviemakers, vloggers, and podcasters have advanced equipment to make them look and sound great, you can provide a professional video

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In a Digitally Focused World THE POWER OF DIRECT MAIL

In an ever-growing digital landscape, one disruptor in advertising and marketing stands out: direct mail. That’s right — classic print and paper mailers shipped directly to your customers’ doors are pushing beyond the noise to give consumers an outlet they actually pay attention to. It may be brash to endorse direct mail marketing on a newsletter that we directly mail to you , but your reading of this article should be proof enough: Direct mail works, and you need to try it. If you’re still not convinced, allow us to explain why this is a secret we just have to share. In a world where most of us work and attend meetings, classes, family gatherings, church meetings, and other get-togethers through our screens, don’t you want to be the voice that stands out and appears in their mailbox instead? We have screen fatigue, and people likely aren’t paying too much attention to the advertisements they have been seeing for months. In business, you have to change and develop new marketing tools. Experimenting with direct mail or special offers may cost you some money, but the returns could be well worth the investment and time spent in developing the route. As an entrepreneur, though, the only risks you can take are

calculated ones. You have to be sure there will be some reward, no matter how small. Direct mail marketing is nothing new, yet it has been proven to work time and time again. Why? When you boil it down, direct mail marketing works because it’s based on an idea that has always stood the test of time in business: the power of relationships. In order to reel consumers into your brand, you need to reach them in diverse ways. Enter direct mail marketing. It disrupts the noise from your digital platforms while connecting with people in a real, personal way. Today’s consumer takes months before making a purchase. When your voice has

been consistent, loud, and diverse, you’re more likely to stand out. And today’s target millennial audience is also looking at print and direct mail before making a purchase. In fact, more millennials learn of products through direct mail, even in a digitally focused world. The digital world is still very influential. We may be tired of staring at our screens, yet we find ourselves pulled to social media, streaming services, and blogs even after we log off work. Businesses need to have a diverse online presence, whether that’s on social media, a blog, or your website, but you don’t have to adhere to one platform over the other. In fact, it’s best if you use direct mail to disrupt your online campaigns and use your online campaigns to disrupt your paper marketing. Relationship marketing that directly targets your consumer works every time. Direct mail has always disrupted the flow of standard marketing, and if you’re focusing your efforts solely on the digital platform because of the pandemic, then you’re making a big mistake. Direct mail is one of the easiest ways to connect with your consumers and stand out while doing it.

Want to learn how we produce our direct mail campaign? Just ask!

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As Americans head to the polls to exercise their right to vote in the presidential election, they bring many issues and beliefs with them. For some voters, these include questions about their portfolio and how the winner of the election could impact their savings, retirement, and ultimately, their future. The Polls and Your Portfolio How Does the Election Affect My Portfolio?

The answer, many financial analysts say, is not much.

Analysts have found that the market has remained stagnant in the year leading up to an election for the past 100 years. Although there hasn’t been any significant change to warrant concern, voter concern over uncertainty tends to be reflected in the market. After the ballots are counted and a president- elect is chosen, the market may see a downward trend if a new president (not incumbent) takes office. Again, this is likely due to uncertainty and concern. Still, the market always ebbs and flows, and most presidents leave office with normal markets. However, what impacts your portfolio more may be congressional elections, which decide who our lawmakers are. Law creation, divided government, and responses to those laws influence portfolio performance more than most presidential elections. Remember, the market responds to reaction, and whom we elect to Congress and how they legislate more directly impacts our lives than the president.

The pandemic that has rocked 2020 has given us plenty of lessons on market volatility. As COVID-19 swept across the U.S., many residents had to shelter in place while industries shut down for an unprecedented hiatus. Financial planners and analysts encouraged patience to allow this storm to pass while they tried to identify long-term change. As we’re still recovering from this pandemic, so is the market, which could have an influence on the correlation between the election and the stock market. That said, if the past 100 years are any indication, you have little to worry about. Whoever occupies the Oval Office in 2021 will have very little influence on your portfolio. Your best financial strategy is to do the same thing you’ve been doing throughout the pandemic: Remain patient.

Black Friday: COVID-19 Edition How to Turn the Shopping Holiday Into a Stay-at-Home Family Event

A string of retail stores, including JCPenney, Bed Bath & Beyond, Walmart, Target, Kohl’s, and Dick’s Sporting Goods, have declared they won’t be open for the traditional Thanksgiving and/or Black Friday shopping this year. But that doesn’t mean the annual shopping holiday is canceled! If you’re an avid Black Friday shopper, you can keep the tradition going and involve the whole family by using the day to shop online. Here are a few tips to get everyone involved in

the fun and turn the holiday into an overnight party.

quite the same as taking a break at the mall’s Starbucks, but it will help you power through the night. For an extra bit of fun, you can even try to recreate your favorite Starbucks drinks at home. ChowHound.com is a great resource for DIY recipes and has hacks for the caramel frappuccino, pumpkin spice latte, and more. Celebrate with a big breakfast. When you’ve finally dropped the last item into your virtual cart, it’s time to celebrate! Depending on how long your spree took, it might be 3 a.m., or you might be able to see the sunlight peeking through your blinds. Either way, you deserve to reward yourself with breakfast. Try cooking your favorite breakfast foods as a family or, if it’s late enough, order home-delivered pancakes and hashbrowns from your favorite local restaurant. Once you’re stuffed, you can crawl into bed knowing that you had a fantastic family night.

Divide and conquer. Does your whole family love shopping? If they do, it’s time to break out the laptops, cellphones, and tablets. Take the list of items you’re hoping to snag and divide them up so that each person has things to browse for. Then choose a start time — midnight is always good — and let everyone loose to bargain hunt. While you’re shopping, remember to use store apps, websites like RetailMeNot and Groupon, money- saving browser extensions like Honey, and price-comparison apps like Flipp to score the best deals. Refuel with caffeine. No all-night shopping spree is complete without a coffee run. To keep your family fueled, make sure to stock up on your favorite coffee in advance and set a time for a coffee break. It’s not

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The Battle of the Smartphone Cameras The Best Mobile Cameras of 2020

Year after year, smartphone technology improves. Devices get faster, screens get sharper, and cameras get better — for the most part. It can be a challenge to find your ideal smartphone that’s also paired with a great set of lenses. Many smartphone manufacturers are inconsistent when it comes to cameras because they pair great phones with not-so-great cameras to cut costs. So, if you want to take exceptional pictures, which current smartphone has the features you’re looking for?

Apple iPhone 12 (iOS) Much like the Pixel line, Apple’s iPhones are known for taking great pictures. But there’s a big difference! Apple incorporates great camera hardware into their higher- end products. The end result produces great photos and videos. (The Pixel 5 struggles in the video category.) Many photography enthusiasts choose the iPhone over the competition simply because it’s so reliable. But is it really better than the Pixel 5 at taking pictures? At a glance, you’d be hard-pressed to tell the difference. It all comes down to personal preference. Bonus: Google Pixel 4a (Android) Both the Pixel 5 and iPhone 12 are higher-end products with prices to match (both over $700). If you’re interested in taking great pictures but don’t want to drop a lot of dough on a high-end device, the Pixel 4a can’t be beat. At about $350, it produces top-notch photos and is an all-around great device. Plus, it has a headphone jack, something both the Pixel 5 and iPhone 12 are lacking!

HAVE A Laugh Google Pixel 5 (Android) Google’s Pixel line has long been associated with exceptional photos, but not because of the camera hardware. It is average at best, but that doesn’t matter because Google knows how to make exceptional image processing software. When you take one picture with the Pixel, the camera actually takes several. The processing software then “stitches” the images together to create one superior image. Other phones do this, too, particularly the Apple iPhone, but the Pixel 5 does it best.

How a Thanksgiving Dinner Mix-Up Led to the TV Dinner

The year was 1953. That fall, the frozen food company C.A.

Swanson & Sons drastically overestimated how many Americans would want a turkey as the centerpiece of their Thanksgiving spread, leaving them with about 260 tons of extra turkey packed into 10 refrigerated railroad cars. Swanson salesman Gerry Thomas had a winning idea. He suggested they package up the remaining turkey with a few sides as frozen dinners that would be ready to eat after being thawed. The twist? They would be served in compartmentalized aluminum trays, much like airplane meals, which were the inspiration for Thomas’ idea. Additionally, they would be marketed as “TV dinners,” with their packaging designed to look like a television set. As the TV rose in prominence in American living rooms, the TV dinner’s popularity increased exponentially. Swanson sold nearly 10 million of them during the first year of production. By 1959, Americans spent half a billion dollars gobbling up TV dinners.

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This year was a mess. Many businesses were not prepared for the roller coaster ride that started in early 2020. By March, most businesses were told to close their doors or restrict access to the general public. As a result, many businesses struggled and some never reopened. There was a lot of bad news. A Fresh Perspective It’s Time to Set Goals for Q1 2021 But we’re not here to talk about bad news. We’re here to talk about good news: your goals to kick off the first quarter of 2021! There’s a good chance many of your growth goals for 2020 fell to the wayside. After all, you had more important things to focus on, like keeping your business up and running. No matter, it’s time to look at your goals with a fresh perspective and use the lessons learned from the past year. One of the benefits of steering a business through a pandemic is that you can better identify its pain points. What sort of worked? What didn’t work? What flat-out failed?

At the same time, many businesses reported that they saved money by shifting part, or all, of their workforce to a remote model. While upfront, short-term costs of this new setup can be substantial, the long-term costs (and savings) may be worth it. Fewer employees on-site may mean a business can consolidate space and save on rent, utilities, and taxes. What’s the final lesson in this example? Many businesses are deciding to go fully remote. Shifting to a remote business model might be one of your first goals for the first quarter of 2021. If you’ve shifted employees to work remotely on a part-time basis, you’re already halfway there. The next step is to look closely at the numbers (costs, employee metrics, customer metrics, etc.) and work with your team to make it a long-term reality.

Turn Pain Points on Their Head

Start by evaluating your pain points, if you haven’t done so already. Shaping your first-quarter goals around these pain points means you can start the year off by addressing them. For instance, are there parts of your business that you can trim? Are there areas that need a complete overhaul? Maybe in 2020, you were carrying too much baggage. For instance, a lot of businesses were operating under the assumption that employees needed to be on-site to be productive. Because of this, most avoided the work-from- home model. Business owners just didn’t see the benefits or assumed it wouldn’t work for them. But in spring of 2020, many businesses were forced to adapt, and several lessons were learned along the way. One major lesson: Work-from- home is feasible and cost-effective.

Your Next Step

What other goals should you be focused on for the first quarter of 2021? Consider how well or how poorly you weathered the last nine months. This is a great time to address any issues that may have come up. I’ll leave you with a few more questions and ideas to help you with first- quarter goals: • Was your cash flow decimated? How did a reduced cash flow impact your business? How can you mitigate this in the future? (Potential goals: increase business savings, find alternative sources of revenue, etc.) • Did you have to suspend products or services? What led to this suspension? Were these products/services useful at bringing in new or recurring business? Did they help your bottom line? (Potential goals: streamline or phase out products/services that no longer serve the same purpose that they once did.) Before you start setting goals, answer the above questions or other questions that the past year has left you with. Home in on your pain points from 2020 and focus on addressing those in the upcoming quarter. Turn those weaknesses into strengths and start 2021 with a fresh perspective and a fresh set of goals.

A Lesson in Productivity

Nicholas Bloom, a professor at Stanford University, researches productivity and has contributed to the body of research that suggests remote employees are, on average, more productive than on-site employees. In 2013, Bloom ran a study on remote workers; it looked at their productivity when they shifted to a four-day workweek while working from home. On average, productivity rose by 13%. Current >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8

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