Tax Savings Through Cost Management with Stephen Anderson

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

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

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

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

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

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

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

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

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

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

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

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

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