you can use a file share program such as http://www.mediafire.com/
then send me the link and password XXXXX any to your document.
let's make it easier. give me your email address and I will send it to you. why should I have to pay more money by a 3rd party to pay you to get an answer??
media fire has free accounts, I know because I have one.
The site rules specifically do not allow me to communicate with you through my own resources. I have to use this site, or a file share program. If I share my email with you, then I will lose my privledges on this site.
Alternatively you can try scanning the documents as an image, save as a jpeg, and use the tree icon to upload in this text box.
I guess I set it up right on media fire. I uploaded the file. Am I supposed to give you my user name and password?
yes, I need to have the link to the information, as well as a password.
shared url - http://www.mediafire.com/cashflow2009
password XXXXX waterloo
I have downloaded the file and am reveiwing the information now. For your privacy, you may want to delete it, now.
I am finished with the analysis, but want to run a few tax scenarios first. I do not want you to think I have forgotten you.
From the data you submitted, which was very detailed in daily operations, it looks like you have a hard decision to make.
From what I can see, you have been operating at a loss, for the past 5 years, so it appears. Now that is not necessary bad. In most businesses, the depreciation expense creates passive losses, and so it does not affect cash flow.
What concerns me is that you show negative cash flow for the entire year. You show a cash flow of (21,000) for the entire year, and a high monthly average.
Depreciation should not be showing up in your cash flow, but cash flows affect the business.
If you were to keep the business, you would have to make some changes to increase cash flow, most likely by increasing prices and cutting costs.
The kitchen normally has the biggest drag on cash flows, in most cases. It is difficult for the kitchen to make money, especially in a B&B, where the food and beverage is a staple for service.
Wine and spirits offers the best opportunity to increase cash flows. But I saw little activity in that area.
I wanted to run some scenarios where I could see if you were able to make money on the property during a sell. (using the basic costs and depreciation schedule for the main property). But there was not sufficient information to do that.
My advise to you would be to look at whether or not you can decrease costs and take advantage of the wine and spirits and overcome that cash flow problem. It is hard to run a business using only 4 months of positive cash to cover year long expenses. That is why, in order to survive, resorts and spas have had to develop a model of being a four season operation.
So that is the other thing, is how to turn it into a four season operation.
It may be time to sell. If you are not able to reduce costs, come up with a four season plan, and to do something possible with the wine and spirits, I would say you can not exist this way for long.
It looks like to me it would be time to sell.
I am giving you a copy of a calculator that can be used to see if you can profit form the sell of the property.
Since this is a business establishment use the calculator for either residential or commercial rental.
Certainly by the 7th year, from a realestate perspective you may want to sell.
Thanks - good stuff.
Wine & Spirits
In May I planned to gift Wine to guests, in more ways than we have in the past. I just built a wine cellar. However, in my county, as a B&B, I can not sell wine to the public, unless, I became an Inn - that would cost $30,000 (installing sprinkler system & commercializing the kitchen)
4 Season Model
Tough One. This area gets pretty quiet in Jan-Apr. I do get guests every weekend during that time, but, it is really slow. I would have to spend a lot on advertising - $2000/mo.
We are in the process of Opening up a side business, that will take 2 years to build, while we market the Inn for Sales.
I still need to know if there is anything I am missing as far tax deductions I am not taking, and or should I be adding back in taxes to figure what my botXXXXX XXXXXne truely is.
I do not see that you are missing anything with regard to taxes.
It would not serve your purpose to add back in taxes to show what you earn before taxes as a stand alone function.
All businesses need to have profits before taxes and profits after taxes.
What you really need is EBIT, Earnings before interest and taxes.
This figures allows you to determine how you can design your business to increase profits by retiring obligations that charge interest, and by designing your business operations in a way to legally avoid or reduce taxes.
this means youi need to show both EBIT and the net profits after interest and taxes.
If you add back in depreciation expense also, you get a truer picture. Depreciation is all passive deduction. It does not capitalize until you dispose of the property, at which time you have to deal with recapture or it reduces your tax basis which increases capital gain.
When businesses seek loans, some lenders, will add back in those expenses that are controllable and are passive.