Industry Insights
Industry Insights content is produced by Niche Publications, an entrepreneurial unit of the Daily Herald Media Group on behalf of our advertisers. This content is not subject to the Daily Herald's newsroom policies. To participate, contact
Select Category
full story »
The next step: Do you have the right people in place?
Posted Dec 14, 2018 1:00 AM
Whether your business is positioned for growth or your exit, personnel decisions can weigh heavily on the process. If you’re on the growth track, you’ll need to know whether you have the right resources in place to support your growth plan. When you’re ready to hand the business to the next generation, you’ll need to be honest about whether your family members have the skills needed — or the desire — to take over the business.Companies looking to grow must often confront the fact that the team that got you where you are today may not be the same group that takes you where you need to go. Realizing this can be emotionally difficult, especially for owners for whom business and family are closely intertwined.Building your benchAs you look to grow, it’s critical to make sure you have the right people not just at the top but in middle management as well, which can help drive sales in the near term while establishing a strong bench that can eventually grow into the next generation of leaders.Also, retaining talent is often as important as acquiring it. Take the example of Fromm International, a beauty products company based in the Chicago suburb of Mount Prospect, Illinois. The company recently opened a satellite office in Bucktown as a way to attract and retain millennials. Employees who live in Chicago have the option of spending part of the workweek in the city and the remainder in Mount Prospect.“We’ve created a space that is convenient, accessible and functional,” says Bill Kelly, Fromm’s chief financial officer. “Their commutes to Mount Prospect have been reduced by 60 percent, and they’re finding their time in Mount Prospect more focused.”But bringing in the right talent isn’t easy. We’ve heard from business owners across all industries about the challenges they face in finding the right people. That’s where your external partners can be a great asset. They can help you make the right connections and help you align your workforce with what you need for long-term growth.All in the Family?Having the right talent in place is just as important if you’re looking to leave the business to a new generation of leadership — even if the next in line is part of your family. That’s what Jeff Thrall, the second-generation owner of Thrall Enterprises, parent company of Nazdar — a manufacturer of digital inks and screen printing supplies — is currently focused on.“In the next generation, there’s only one family member who’s working for one of the operating companies,” Thrall says. “We want to encourage the third generation to be more engaged. We’re working on educating them on our businesses and our strategy.”In the case of Arro, a Hodgkins, Illinois-based food manufacturer, the long-term plan is to position its largest business unit for an eventual sale, according to company President Patrick Gaughan. He has no plans to leave the business to his children, preferring they pursue their own paths.“Long term, we’d like to give our kids liquidity as opposed to a business that they may not be capable of running — or even want to run,” Gaughan says.• Henry Munez is Market Executive, Head of Diversified Industries Group - Illinois for BMO Harris Bank.
full story »
Switching accounting methods can provide instant tax savings for manufacturers
Posted Nov 9, 2018 1:00 AM
As a manufacturer or distributor, you probably determine taxable income using the accrual method of accounting but switching accounting methods can provide tax savings. In the past, anyone with inventory was generally required to file tax returns under the accrual method. The Tax Cuts and Jobs Act changed this requirement in 2018. Under the new tax law, manufacturers can now switch to the cash basis for tax reporting if gross revenue is under $25 million. The new tax law provides many advantages for manufacturers.In my opinion, the biggest and most overlooked change is the ability to switch from the accrual accounting method to the cash basis for tax reporting.The difference between accrual basis and cash basisThe biggest difference is timing. Under the accrual method, income is taxed when earned or invoiced. Under cash basis, income is taxed when collected. Conversely, expenses are deducted when they occur for accrual basis. For cash basis, expenses are deducted when paid — think Accounts Receivable and Accounts Payable. For instance, one $12 million per year manufacturer was able to defer over $280,000 of tax by switching to cash basis. Companies can defer quite a bit of taxable income under the cash basis which can eliminate the need to make any estimated tax payments for 2018. They can use the cash saved to invest in new equipment, pay down the line of credit, increase investment in new product lines, or just increase income paid to shareholders.Converting to cash basis FAQs Is this a permanent deferral of tax? Permanent as long as total accounts receivable exceeds accounts payable and accrued expenses. The amount of deferred tax can grow as the business grows.How do I know if converting to cash basis will save me money? If your total accounts receivable is greater than your accounts payable, converting will save you money.Do I have to switch in 2018? No, you can switch in any future year under the current law. The biggest tax impact occurs in the year you make the switch.How is the $25 million dollar gross revenue test calculated? Eligibility is determined annually based on the average gross revenue for the prior three years. To be eligible for 2018, your average revenue for 2015, 2016 and 2017 must be under $25 million.What happens if we exceed the $25 million average in a future year? A company is required to switch back to the accrual method if average gross revenue exceeds $25 million. The deferred income is added back over a four-year period.Switching to cash basis can provide a significant tax deferral and can be a tool to help your company grow. It does require planning. Although this seems like a “loophole,” it was the intended to help small manufacturers. If eligible, this is a strategy that most manufacturers should adopt. Contact DHJJ or your tax professional to see if this strategy fits your business. • Ed Brooks is a CPA and Principal at DHJJ in St. Charkes.
full story »
Entrepreneurs as builders of Chicago — The Ready City
Updated Oct 23, 2018 8:43 AM
Chicago, I love. Who wouldn't? Chicago is a stunningly beautiful and lovable city. Many of Chicago's neighborhoods and suburbs are its diamond necklace. Others are its noose. One can't judge a book by its cover or a city by its shimmer.Thoughtful and caring minds among us are saddened and shamed, and yet painstakingly informed by Chicago's record-breaking murders, shootings, abuse, crime, corruption, brutality, bullying, racism, incarceration of former elected officials, obfuscation, history lurking in halls of power, perennially low levels of employee engagement, and other oppressive, repressive, and retrogressive factors of Chicago life. The list goes on. This red-faced moment may stop us from being The Windy (i.e., bloviating) City. Today is the day to embrace the entrepreneurial thinking-and-doing challenge of building and being what we know we need to be — Chicago. The Ready City.Forward-minded entrepreneurs are communicating the socioeconomic importance of deeper, wider, and higher independent thinking toward entrepreneurial and intrapreneurial ways of generating new jobs and other types of growth. From entrepreneurship education programs in high schools, to high-profile venture incubators on college campuses and elsewhere, entrepreneurially minded women and men are embracing innovation as a solution to what ails us.Talking ad nauseam about ways the federal government, state, county, cities, and villages SPEND money — without contributing to a steadier stream of conversation, ideas, and effort toward supporting those entrepreneurs, and other business leaders, who are generating new revenue — is a blueprint for more failure. Entrepreneurs focus on creating jobs and other value. New thinking = New ventures. New ventures = New jobs. New ventures and new jobs = New tax revenue.Yes, new residents are also badly needed. We must stop the alarming number of people abandoning Chicago, and Illinois overall. The brain drain must stop!In historically proud-as-punch Chicago, perhaps (just perhaps) more than in other big cities, a sustainable socioeconomic renaissance will depend on a deeper personal understanding of independence vs. dependence; the self-reliance (i.e., reliance on one's own powers and resources rather than those of others) that's modeled by job-creating, value-forming, and difference-making entrepreneurs. Is Chicago's slowness toward change-for-the-better based on a historically maladaptive culture of acquiescence, benign neglect, or worse — apathy?Immediately we must redouble our deeper thinking, wider perspective, and higher action about entrepreneurial venture creation, value formation, and nonstop innovation. Let's turn the oddly negative nickname we embrace, The Windy City (called “windy” for the city's infamous history of hot air), into a never-ending quest to be and remain Chicago. The Ready City. With cognitive agility, emotional competence, and resource readiness, we will become ready to invite and welcome the region, state, nation and world — for win-win-plus communication, commerce, and collaboration.Throughout the Greater Chicago Metroplex, entrepreneurs are setting a fast pace. Entrepreneurs — of all ages and venture stages — are to be supported as architects, builders, and funders for Chicago. The Ready City.• John R. Dallas, Jr. is CEO of ENCLAVE for Entrepreneurs Foundation Inc. in Elk Grove Village.
Top Jobs

    View all Top Jobs Place a job ad


    Connect with a business or service in your area fast. First select a town, then enter a search term or choose one of the listed popular searches:

    Don't see your town listed? Visit our full directory to begin your search.