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QUARTERLY NEWSLETTER
December 2019

A SPECIAL THANKS TO OUR SPONSORS!

 

SUSSEXPRESS, LLC
Take the Hassle Out of Travel.

 
SUSSEXPRESS, LLC provides premiere door-to-door transportation to and from all major
airports, cruise ports, major train stations, New York City and group events.  
Hands down, convenience is the number one reason you should take a car service the next time you need to get to the airport or an event. Door-to-door service – from the door of your home, to the door of your event and back. You focus on the reason you are there!

​website: www.sussexpressllc.com
phone: (800) 946-4390
email: 
travel@sussexpressllc.com

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Wilson Advisory Group

Wilson Advisory Group, LLC provides business expense reduction services that are offered on a contingency basis — if they can’t deliver savings, there is no charge. And it doesn’t take a lot of time to find out. You will need to answer a few questions and share some basic information; Wilson Advisory Group will take it from there. Its solution platform enjoys a 95% success rate.  W.A.G. specializes in employer-provided healthcare, employee retention and accounts payable solutions.

When was the last time you saw the cost of doing business actually go down?  It is possible. You just need to know how the changing landscape of employee needs, technology, regulation and taxes can be leveraged to your advantage. That’s where Wilson Advisory Group, LLC comes in.  They can help you create efficiencies in the way you do business. Expertise and technology-enabled solutions can help you spend less in the way you pay, contract for services, and leverage tax law. There is no reason to leave money on the table.  Give them an exploratory call today.

website: www.wilson-ag.com
phone: (973) 671-3837
email:s.wilson@wilson-ag.com / a.wilson@wilson-ag.com

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TITAN Business Development Group, LLC

TITAN Business Development Group, LLC is an award winning, results-driven, professional, licensed, innovative and energetic business development firm located in Flanders, New Jersey. Titan B.D.G. 

With a robust history of experience and a dynamic arsenal of tools and individualized strategies, Titan BDG will help you build a better business! Specializing in business coaching, executive coaching and advisory services, we partner closely with small and medium size business owners and management to successfully create definitive, measurable and sustainable results. Working together to improve operations, grow their businesses and challenge & crystallize visions, our goal is to help our clients become titans in their industries. .

titan: one of prodigious size, strength or achievement

website: www.TitanBDG.com
phone: (973) 601-3275
email: information@TitanBDG.com

​Special Offer:  10% discount to SBORE Members.  Please mention at time of engagement.



We are a marketing and advertising company that offers many ways to promote businesses effectively.  We offer:

Menu Advertising. Reaching your target market and a captive audience on a daily basis for just pennies per exposure.

Custom Print Products. Items such as business cards, 2 or 3 part forms, brochures and just about anything in print.

Promotional Items and Tee Shirts. Market your business in a clever way. We can help find unique quality products for your business all at competitive prices.

Need to get the word out about your business? We are excited to offer package deals on postcard mailings where cost includes design, print, mail and postage, where most costs are less than the price of a postage stamp!

Do you want your business to stand out?  Make a great first impression with our cleverly designed business cards, customed to your needs.

Contact us today and we will help find the best solutions to grow your business!
 

website: www.mainlymenus.com
phone: (973) 398-3314
email: advertising@mainlymenus.com

EVENTS

1st Anniversary Celebration and Open Networking Event
January 7, 2020 at Pavinci's Italian Grill, 6-10 PM.
To learn more and to register, visit: 
https://www.sbore-titan.com/event

Open to non-members, so feel free bring a fiend and pass the word along!


Upcoming 2020 SBORE Meeting Dates:
4th Wednesday of every month 


January 22, 2020
February 26, 2020
March 25, 2020
April 22, 2020
May 27, 2020
June 24, 2020


Time: 6:00 pm to 8:00 pm
​​Where: TITAN Business Development Group, LLC
272 Route 206, Suite 203
Flanders, New Jersey 07836

 

MEMBER SPECIAL OFFERS

 TITAN Business Development Group, LLC - Licensed, Professional Business Coaching and Consulting:  10% discount to SBORE members on results-driven business coaching, consulting, tax and accounting services.  Come discover the advantage of excellence!  www.TitanBDG.com  (973) 601-3275  edegen@TitanBDG.com    (SBORE SPONSOR)
 



Wilson Advisory Group
Reduce your monthly wireless charges – Free Audit

While telecommunications and cell phone spend represents a relatively small level in a business, it is important to only pay for the service levels you need.  Carrier representatives are incentivized to grow their revenue and don’t always provide you with the most cost-effective solutions.  We specialize in lowering your phone bills by assessing your usage pattern.  We apply our industry insights to reducing your bill, typically saving you between 25-33% on your phone services on an ongoing basis.  Our experts have held positions working on pricing strategies for major wireless carriers and understand the pricing and billing methods the wireless carrier use.

We understand and apply our industry knowledge by assessing your most recent phone bills and presenting a recommendation for the optimum plan for each phone, as well as how much money the recommended changes will save your company.  Our recommendation also includes a detailed letter explaining our strategy.  After you review the recommendation, one of our auditors will have a brief discussion with you, and then we will implement the changes on your behalf.  Best of all, we will continue to monitor your bills each month to update you on usage, new plan options and potential savings.

Contact us to find out how we can save you money.

(877) 699-9994 or info@wilson-ag.com   (SBORE SPONSOR)
 

GENERAL MEMBER ADVERTISEMENTS
 
 Sussexpress, LLC - Transportation Services: 

“Are you planning a family gathering over the holidays and wondering how you’ll get everyone here, there or everywhere?  Let SUSSEXPRESS help you!  We provide customized transportation services for groups of up to 14 persons in the same van – single and small group transportation also available.  Save time, keep cost down and the fun in one place.   Our rates are reasonable and our service outstanding.  Call our friendly Customer Service for your price quote today @800 946 4390.  Go online at: https://www.sussexpressllc.com/book-now/  or email us at: travel@sussexpressllc.com .   We look forward to providing you with outstanding service.”  (800) 946-4390   (SBORE SPONSOR)

 




  TITAN Business Development Group, LLC


*THE* PERFECT & UNIQUE GIFT FOR THE SMALL BUSINESS OWNER!

This year give the small business owner in your life (and that may even be YOU) the unique and high-impact gift of a GIFT CERTIFICATE for a 3-hour Annual Strategic Planning Workshop for their business, held by New Jersey’s award-winning premiere Business Coaches on January 3, 2020.
 
Attendees will be able to approach the new year with a crisp, reflective and well formulated and documented strategy.  Many business owners don’t engage in this process and as a result, they struggle!  You can be certain, though, that the most successful business owners do create a thoughtful plan of attack on quite a regular basis.  In fact, one of the strongest predictors of growth is one’s annual planning process.
 
Don't let next year simply be a repeat of this year.  Attendees will capitalize on a structured and tactical approach to developing a strong plan of attack, reaping the rewards not just in 2020, but beyond, as well.  All for a fraction of the cost of one-on-one private coaching.  Attendees will also receive an electronic template on a USB stick that they can use for this process, over and over again, for years to come.  (Attendees will also need to bring a Laptop or Tablet to this Workshop.)

To learn more about the benefits & features of this workshop, visit:
 
https://titanbdg.wixsite.com/strategy-2020



Fall tutoring is available for elementary to college students in a variety of subjects. Get off to a good start by contacting us early to book a session.  Tutoring is held at Sussex County libraries and classes will be held in Newton.  For more information contact Patricia.  The Teacher’s Edge Tutoring LLC | Hamburg, NJ | Email: pvoorhees@teachersedgetutoring.com  | 973-209-1202 


   Lime Energy | Unlocking Energy’s Business Potential

NJ CLEAN ENERGY DIRECT INSTALL PROGRAM OVERVIEW
Let New Jersey pay up to 70% of your energy efficiency upgrade.

Sometimes, the biggest challenge to improving energy efficiency is knowing where to start and how to get through the process. Created specifically for existing small to medium-sized facilities, Direct Install is a turnkey solution that makes it easy and affordable to upgrade to high efficiency equipment. We will provide you with a FREE energy assessment and a participating contractor will work with you to cut your facility’s energy costs by replacing lighting, HVAC and other outdated operational equipment with energy efficient alternatives. The program pays up to 70% of retrofit costs, dramatically improving your payback on the project. As of December 31, 2018, 8,246 projects have been completed with approximately $183 million in incentives paid!Eligibility
Existing small to mid-sized commercial and industrial facilities with an average peak electric demand that did not exceed 200 kW in any of the preceding 12 months are eligible to participate in Direct Install. Applicants will submit the last 12 months of electric utility bills indicating that they are below the demand threshold and have occupied the building during that time.

Program Participating measures and Scope of Work
  • Lighting
  • Heating, Cooling & Ventilation (HVAC)
  • Refrigeration
  • Motors
  • Natural Gas
  • Variable Frequency Drives
Your new energy-efficient equipment will provide savings for years to come through dramatically reduced energy costs on your monthly utility bills

Ongoing Savings
Project installations are typically completed within 90 days from the time of scheduling your energy assessment.

Fast Turnaround Time 
Your share of the project’s cost could be as low as 30%, in which case the program pays the remaining amount. With incentives so dramatic, your upgrade project can very quickly pay for itself.

Minimal Cost 
Measures eligible for Direct Install are limited to specific equipment categories, types and capacities. Boilers may not exceed 1,500,000 Btuh and furnaces may not exceed 140,000 Btuh. Limitations on packaged HVAC, motors and other equipment also apply. Larger capacity equipment may be eligible for financial incentives through NJ SmartStart Buildings.Please visit
www.njcleanenergy.com for more information.  Direct Install program
Daniel Rugel, Program Outreach Coordinator
C: (716) 242-9650 | O: (201) 416-2569  |  
www.lime-energy.com
 
ARTICLES

Eric Degen, CPA, CGMA, LPBC, CMEC
TITAN Business Development Group, LLC
edegen@TitanBDG.com
Key Elements of an Effective Service Agreement
 
Written agreements are vital towards establishing a mutually beneficial relationship between two parties, laying out the services, terms, and conditions they consent to.  A Service Agreement works no differently, providing a framework for consultants of all fields of expertise to provide their services to clients.  Whether you offer such services or are in need of them, it is imperative that you understand the key components of a successful Service Agreement and 
employ an attorney with expertise in drafting them.
 
The main purpose of any Agreement is to specify what one party will do for the other (and perhaps also visa-versa).  At a minimum, the Agreement should state what service is to be provided, what fees or charges are being agreed to and any additional important terms and conditions, such as time to completion or others agreed upon points.  Often, an Addendum is attached to a Main Agreement with specifics.  This is usually referred to by reference as the Statement of Work.
 
In some cases, the party employing the consultant may need to provide support services to facilitate the consultation work, such as the use of the company’s equipment. The Agreement can have a section enumerating these duties based on the understanding of the parties.
 
Fees and expenses should also be clearly stated along with a method for payment, such as “X percentage up-front”, “due upon completion”, “due within X days of invoice receipt” etc.  Likewise, a good Agreement will specify when the job will be invoiced.
 
The Service Agreement should state what date it comes into effect and for how long it will remain in force. The Agreement should spell out whether it can be terminated on a specific date or when the work has been completed to the satisfaction of both parties.
 
These Agreements often require dealing with very sensitive material. The Service Agreement should devote a section to clearly outlining the parameters and restrictions with which this information can be utilized.  It might directly state that one party consents to disclose said information to the other party and that if anything confidential is to be disclosed to a third party, it can be done only through the written and signed consent of both parties.  If a breach or wrongful use of this information is to occur, then the provision should spell out the consequences, namely an immediate termination of the Agreement and the right of the wronged party to pursue legal action and recover the associated costs.
 
It is also a good idea to include a warranty that describes the remedy for any guarantees you are providing or issues that may arise.  For example, by way of refund or correction at no additional cost to the receiving party.
 
Lastly, the Service Agreement should contain a section that covers a range of other matters that are crucial to the execution of the work. This includes making clear that the consultant is an 
independent contractor rather than an employee (which would have distinct tax implications), giving leeway to any delays or failures in performance caused by externalities beyond either party’s control, and establishing how the two parties will communicate with one another in relation to the Agreement (via email, U.S. mail, etc.).
 
Keep in mind, too, that any given Service Agreement may require additional articles or sections that are unique to the engagement.  It is important that legal expertise be sought when preparing your Agreements, to be sure the language is carefully drafted, and the necessary contractual elements are present.
 
***
 

Ethan Hundley
Hundley Advisors
ethan@hundleyburn.com
 



Buy-Sell Agreements

Buy-sell agreements are usually part of a succession plan put in place to protect the financial interests of the owners of closely held companies and their heirs and to protect the company’s stability in case of a major event.  Funding buy-sell agreements is frequently accomplished using insurance policies under (1) a cross purchase agreement, or (2) a stock redemption agreement.  

Cross purchase agreement. Each owner of the company takes out, and is beneficiary of, an insurance policy on each of the other owners. In the event of an owner’s death, the other owners use the insurance proceeds to buy out the decedent’s ownership share in the company from the decedent’s beneficiaries.

Cross Purchase Agreement

Advantages: 
  • Simple to set up.
  • Life insurance proceeds are not taxable to the beneficiary, and the decedent’s estate gets stepped-up basis in the ownership interest. The transaction does not result in tax liability for either party.
  • The transactions occur outside the company. The life insurance proceeds are not subject to claims of the company’s creditors.
  • The basis of the remaining owners is increased by the FMV of the interest acquired.
 
Disadvantages: 
  • The number of polices needed can be cumbersome with multiple owners.
  • Because older owners’ life insurance premiums will be higher, a disparity in cost is created between older and younger owners.
  • The agreements must bind the beneficiaries to the agreed-upon transactions, such as selling the deceased owner’s interest.
  • Control can shift when ownership transfers occur under a cross purchase agreement.
     
Stock Redemption Agreement. The company takes out life insurance policies on each of the owners. When an owner dies, the company buys out the deceased owner’s interest.

Advantages:
  • Simple to administer with fewer policies required than with a cross purchase agreement.
  • Cost of policies is split evenly among owners.
  • For a C corporation, the proceeds are not taxable income.
  • Policies are not subject to the claims of owner’s creditors.
Disadvantages:
  • For a C corporation, proceeds increase E&P, resulting in taxation upon distribution to shareholders.
  • Rules about stock redemptions can be complex. Related-party rules can cause unintended consequences.
  • Remaining owners do not benefit from a step-up of basis.
  • Those with the highest shares of ownership pay the most for premiums.
 
Valuation. Valuation of a company can change significantly in a relatively short time. The buy-sell agreement should be flexible in its ability to accurately reflect changes in value.

In a cross purchase agreement, the company has no interest in the decedent’s life insurance proceeds, whereas in a stock redemption, the interest is included with the value of the business. Typically, the redemption price of a stock redemption includes a portion of the life insurance proceeds.

Buy-Sell Agreements

Example #1: Abe and George each own 50% of Cherry Tree Inc., a C corporation. The company is currently valued at $250,000. Under a cross purchase agreement, Abe takes out, and is beneficiary of, a $125,000 life insurance policy on George. George takes out a similar policy on Abe. The cross purchase agreement is structured so that additional policies can be taken out over time as the value of the company increases.

George dies and Abe collects $125,000 in tax-free proceeds from the life insurance policy. Under the terms of the cross purchase agreement, George’s beneficiaries are required to sell his interest in the company to Abe for $125,000. Since the basis of George’s interest is stepped up to FMV on the date of death, George’s beneficiaries do not realize taxable income.

After the transaction, Abe owns 100% of the company. George’s beneficiaries receive $125,000 cash, which is not taxable to them.

Example #2:  Assume the same facts as Example #1, except the buy-sell agreement is funded by a stock redemption agreement. Cherry Tree Inc. takes out, and is beneficiary of, a life insurance policy on Abe in the amount of $125,000, and a similar policy on George.

When George dies, Cherry Tree Inc. receives $125,000 in life insurance proceeds. The proceeds are not taxable to Cherry Tree Inc., but the $125,000 in life insurance proceeds do increase the corporation’s earnings and profits (E&P) so the amounts will be taxable if distributed to shareholders as dividends. Cherry Tree Inc. uses the proceeds to purchase George’s ownership interest from his beneficiaries. George’s ownership interest was stepped up at his date of death so his beneficiaries do not realize taxable income on the transaction. Abe now owns 100% of the outstanding stock of the corporation.


Insurance. There are several other insurance policies which should be considered by every business owner. 

Key person life insurance.

Many business owners are required to sign personal guarantees to secure business debt. In the event of an owner’s death, these debts will remain and, if unpaid by the business, will become the responsibility of the owner’s heirs. By taking out life insurance on the owner, proceeds can be used to retire the debt. The proceeds can also be used to fund the search for a replacement to the deceased business owner or to fund obligations to the owner’s spouse, such as continuing medical insurance coverage or salary payments. The premium payments by the business are not deductible, and the proceeds from the policy are not taxed as income.

Disability insurance.

Disability insurance protects the earnings of employees and business owners by providing a stream of payments when a disability resulting in the loss of ability to work occurs. 

Professional liability Insurance.

Professional Liability insurance provides coverage for claims arising from professional error or malpractice. It is most commonly used by physicians, attorneys, architects, and accountants. The costs of this coverage are deductible to the
business owner and augments the liability protection of incorporating.

 
***
MISCELLANEOUS
 
*   Don't forget to join our Facebook Group at (click here).
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* Remember to consider using ouMember Directory when looking for product/service providers.
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* The Small Business Owners' Roundtable Exchange (SBORE) is opening newly expanded sponsorship opportunities that include:

1) A listing on the SBORE site Sponsors’ Page, which includes logo, contact info and links as well as a descriptive paragraph about your business. (Also great for SEO purposes.)
2) Exclusivity: Stand apart from competition - only one Sponsor per type of business will be allowed.
3) Open floor: Sponsors can give a 10-minute presentation at the beginning of a meeting.
4) Advertising: Sponsors can provide collateral materials and promotions that can be handed out at meetings.
5) Sponsors will be highlighted in our quarterly newsletters.
6) Sponsors will receive recognition on our Facebook Page that includes contact info/link.
7) Membership: Sponsors do not have to be a member but are encouraged to join and would also be listed in Member’s Directory. 

Interested? Call (973) 601-3275 or email SBORE@TitanBDG.com.

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​* A special thanks goes out to our Sponsors!
 

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* SBORE business cards are available that can be passed out to friends and contacts of yours that might be interested/prospective members.  Just ask for a few an we will gladly mail them to you or you can pick them up at the next meeting.  Remember, the more members we have, the greater chance for impact on you and your business.

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* If you are interested in presenting a business topic of value at a monthly meeting, feel free to reach out to us aSBORE@TitanBDG.com.

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CLOSING QUOTE

“The value of an idea lies in the using of it.”
 
                                                           — Thomas Edison

 
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