We all want businesses to rise to their full potential. Unfortunately, the COVID-19 pandemic has left many flat as a pancake and sifting through a baker's dozen of challenging situations. Are you kneading extra dough for your business? Of course, we are referencing the informal meaning of dough and processing the unique mixture of your company's circumstances, all to fold in the Employee Retention Credit (ERC) ingredient.
Let us tell you a story of a client who almost left dough on the table that they were eligible to claim.
A husband and wife own a small, private bakery and experienced success at creating, preparing, and selling specialized, homemade family recipes. The couple expanded their online presence by recording “how-to videos” using their secret, pre-mixed ingredients. Additionally, the bakery provided cooking classes and an online baking community forum.
The business did not experience the burning effects of COVID-19 until the latter half of 2020, which also seeped into 2021. Due to supply chain issues, the bakery encountered many challenges procuring specific ingredients for its best-selling products. The owners tried acquiring these unique and high-quality ingredients with alternative suppliers to no avail. Therefore, they reformulated their recipes, remarketed their products, and reproduced the videos referencing previous mixes. Additionally, the software with direct access to selling products to consumers faced suspension due to updated guidelines. To make matters worse, customers became reluctant to visit the bakery during unprecedented times. The financial statements starkly revealed the full story. Although the bakery only employed eight people, the owners faced significant decisions about the future of their business.
When our Business Advisory team introduced the option of the ERC to the owners, they were unaware of the program. We worked directly with them to analyze their financial position and kneaded our way through all qualification options available to the bakery. It qualified in every quarter of 2021 based on the “Gross Receipts Decline Test.” The icing on the cake was that the owners received close to $100,000. This credit became the difference between closing the doors to the bakery and recovering from their bleakest year.
Join us for a live webinar on March 15, 2022, at 11 AM, as we walk you through the development of ERC requirements and examples. It may aid in a good rise, support spring, and have a strong effect on your internal structure. Pun intended.