Should You Trust Your CPA with Your Taxes?
Trust but verify, says Gene Marks, who is both a CPA and a business owner. You can’t just assume your CPA is catching everything.
Here are today’s highlights:
Mattress Mack’s $10 million bet on the Astros pays off.
This could be a very good time to hire tech workers.
Macy’s says it will invest $30 million in minority-owned businesses.
Have you heard the term “Menty B”? You should know what it means.
THE 21 HATS PODCAST: DASHBOARD
Gene Marks says there are still lots of ways to save on taxes this year, but he also issues a warning: It’s a mistake for owners to just take their financials to the same CPA every year and assume he or she is doing everything possible to minimize what you pay. Every few years, Gene advises, you should take your returns to a different accountant and see if fresh eyes spot alternative tax opportunities for you to consider. Plus: Why Gene thinks you should ignore those third-quarter GDP numbers, and why he says there are times when owners should fight back rather than accept a bad online review.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Mattress Mack’s bet on the Astros pays off with $75 million—and priceless marketing: “Bookmakers on Saturday forked over what's believed to be the largest payout in sports betting history—approximately $75 million—to a Texas furniture store owner who earlier this year plunked down $10 million in bets on the Houston Astros to win the World Series. Jim ‘Mattress Mack’ McIngvale jumped for joy in his front-row seats at Minute Maid Park as the Astros clinched the World Series with a 4-1 victory over the Philadelphia Phillies in Game 6 on Saturday. It was the culmination of a six-month ride for the self-proclaimed ‘huckster’ that began May 13, in the parking lot of a Louisiana restaurant, where McIngvale placed a $3 million bet on the Astros to win the World Series at 10-1 odds on Caesars Sportsbook's mobile app.”
“McIngvale uses the betting market to mitigate risk on promotions at his Gallery Furniture store that are based on the winner of big sporting events, from the Super Bowl to the Final Four. His biggest promotions, though, have involved the Astros and the World Series.”
“This year's deal offered to refund any customer who spent at least $3,000 on furniture double their money back if the Astros won the World Series. He'll use the $75 million from his winning bets to pay back happy customers who participated in the promotion and likely still turn a cushy profit.”
“‘Oh, it's definitely a win-win,’ McIngvale told ESPN in a recent profile. ‘These promotions just bring the brand to life and give us a ton of brand equity that we wouldn't have otherwise. The customers love it, so they're totally engaged and talk about it for years.’” READ MORE
Macy’s says it will invest in minority-owned businesses: “Macy’s, the largest department store in the United States, plans to invest $30 million over the next five years into three financing channels meant to support businesses run by people from underrepresented groups in the retail industry. It is working with Momentus Capital, which will oversee the loan fund. The retailer, which brought in $25 billion in annual revenue in 2021, said total financing for these programs would equal $200 million. The money will be offered in the form of loans for working capital and commercial real estate, as well as growth equity capital. Macy’s executives said they wanted both the vendors it works with now and new ones to be involved with the program. They expect the initiative to boost profits for the company, they said, in part because they believe their customer base will expand and diversify.”
“Macy’s has been trying to figure out how to make its vendor base more representative of the U.S. population, and its shoppers. ... In late 2020, it signed the 15 Percent Pledge, which asks retailers to allocate 15 percent of their shelf space to items from Black-owned businesses.”
“The company says the number of Black-owned brands on its shelves has increased eightfold since then, but still has not reached the 15 percent benchmark.”
“Robin Wilson has experienced plenty of success since starting her home textile business, Clean Design Home, in 2000. Her hypoallergenic products have been sold at Bed Bath & Beyond, and she has fulfilled large orders for a hotel chain.”
“But Ms. Wilson is primarily self-funded, and as she looks to expand her business into other categories, like mattresses, she estimates that she will need at least $1 million in financing. ‘How do you become a brand that people just walk into a store and say, I want that?’ she said.” READ MORE
More and more homes are being sold to investors:
Shoppers are looking to trade down this holiday season: “‘I’m skipping the splurge this year,’ said Kate Cheng, who owns a jewelry store in San Francisco. Ms. Cheng said she normally treats herself to a designer handbag or another luxury item during the holidays, but is holding off this year over concerns about a looming recession. She has noticed a shift in her customers’ buying habits in recent months to less-expensive silver jewelry from gold. That has prompted her to curtail her own spending. She switched to Uniqlo leggings instead of products from Lululemon, which cost about twice as much. She also canceled a trip to Maui, which would have cost about $4,000, and instead plans to take a road trip to New Mexico for about half the price.”
“Seventy-two percent of consumers plan to look for less expensive alternatives this holiday season as a result of inflation, according to a survey of 2,200 U.S. adults by Morning Consult, a research company.”
“Holiday retail sales in November and December, excluding spending on cars, gasoline and restaurants, is slated to increase between 6 percent and 8 percent from a year ago, after a 13.5 percent jump last year, according to the National Retail Federation, a trade group.” READ MORE
It’s a good time to be looking for tech workers: “Flush with investor capital, technology startups plan to scoop up software developers, engineers, and marketers flooding the labor market following job cuts at Twitter, Lyft and other large tech employers. Kathy Zhu said she is lining up candidates for engineering, customer service, and other roles at Streamline AI, the two-year-old tech startup she co-founded. They include prospects from ‘two or three companies that just had big layoffs,’ she said. ‘There’s an abundance of talent right now, because of these layoffs,’ Ms. Zhu said. ‘A few years ago, there was no way we could’ve attracted candidates like this.’”
“Arya, a two-year-old automated compensation management startup in New York, aims to use funds from a $3.3 million seed round in May to hire at least four new employees by the end of the year, said founder and CEO Kunal Sarda.”
“‘We’re seeing candidates come through from the FAANGS of the world that we would never have seen before,’ Mr. Sarda said, referring to the stock-trading acronym for Meta Platforms’s Facebook, Amazon, Apple, Netflix, and Alphabet’sGoogle.” READ MORE
Some companies are coping with New York City’s pay-transparency law by listing expansive salary ranges. But is that a good idea? “On Tuesday, New York City became the biggest job market in the U.S. to require employers to list pay ranges in job ads. Supporters hoped the rule would give workers an edge in pay negotiations that historically have left employers with most of the leverage. Economists and lawmakers predicted that New York’s law, and ones set to go into effect in California and Washington state in coming months, would reduce pay disparities across employee populations, jobs and industries. Wide pay ranges often do little to clarify matters for employees, said Daniel Zhao, lead economist for Glassdoor, which for years has collected and disseminated pay information and reviews of employers. ‘If the difference is over $100,000 or double, that starts to become wide enough that it’s less useful,’ Mr. Zhao said.”
“Candidates who are offered less than the top end of a pay range could have second thoughts about the job, while existing employees may raise questions, said Christine Hendrickson, vice president of strategic initiatives at the workplace analytics platform Syndio.
“‘The employers that have the very wide ranges, it’s not a get-out-of-jail-free card,’ Ms. Hendrickson said. ‘It’s going to spark a lot more conversations with candidates and employees.’” READ MORE
So now employers are ghosting job candidates? “The practice of ‘ghosting’ has taken a 180-degree turn. Up until recently, many job candidates in this very tight labor market thought nothing of accepting interviews — even job offers — and then ghosting the company that recruited them by simply not showing up. Now, new data from jobs platform Glassdoor finds that a growing number of employers are doing the same. According to Glassdoor’s chief economist, job seekers have increasingly reported being ghosted by employers since the pandemic began. ‘The share of interview reviews mentioning ghosting has almost doubled (+98 percent) since Feb ‘20,’ he wrote in a Twitter post. ‘In January 2019, roughly 1.25 percent of interview reviews mentioned ghosting and that percentage has increased over the past two and half years to more than twice that amount.”
“The tide is clearly turning and employers of all sizes can be pickier about the people they hire. So, just like all those candidates who ghosted them, now the employers are doing the ghosting. Awful, right? But maybe it’s a good thing.”
“Who would want to hire someone who behaves like this? If that person can’t be a grown-up and tell a recruiter face to face about their change in plans, then how can they handle similar situations with customers and suppliers, where plans and promises are always fluctuating?”
“And what about the company that behaves this way? Is this living up to their so-called ‘mission statement?’ Do you believe they are ‘making the world a better place,’ ‘creating value’ or ‘building a sustainable future’ like they say in their corporate propaganda?” READ MORE
Do you know what a “Menty B” is? “A nickname for ‘mental breakdown,’ the term has gained traction among Instagram and TikTok users, many of whom work it into their usernames and posts as a light way of describing emotionally heavy times. Etsy shops sell sweatshirts, hats, laptop stickers, keychains and mugs emblazoned with ‘menty b.’ Having a pet name for mental-health struggles shows how open conversations about mental health are becoming, especially online. Some say it helps them update family and friends on their mental state without causing concern. For others, ‘menty b’ has become shorthand for something less than a full meltdown, the way some single people use ‘situationship’ to denote something less than a fully committed romantic relationship.”
“More than 50 million adult Americans had some form of mental illness, according to a 2020 survey by the Substance Abuse and Mental Health Services Administration, a government agency.”
“And more than 5.4 million people in the U.S. participated in mental-health screenings in 2021, nearly six times the number of people who did so in 2019, according to Mental Health America, a research and advocacy nonprofit.” READ MORE
THE 21 HATS PODCAST
Should You Be in a Business Group? This week, Sarah Segal, Jay Goltz, and special guest Leo Bottary have a hype-free conversation about why peer-advisory groups like Vistage, YPO, and EO can be life-changing for business owners and why they’re not for everyone. Sarah has been wondering if they’re for her. Jay, who’s been in six different peer groups, says it can be worth the price of admission just to see how other owners run their businesses—but there are reasons he keeps leaving the groups he joins. And Leo is a former Vistage employee who has written multiple books on peer groups and has built a related consulting practice. Surprisingly few business owners belong to a peer group. Are they missing out? All three guests suggest questions to consider before deciding for yourself.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren