Small Business Doctor is an Intuit Quickbooks ProAdvisor certified firm with reasonable rates. Every bookkeeper is a certified bookkeeper. We can handle payroll if requested and can clean up your books if needed.
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Every small business has a limiting factor. It could be leads, cash flow, capacity, almost anything. The Small Business Doctor diagnoses and develops a treatment plan for your bottleneck.
From business plan analysis to routine small business checkups to strategy sessions, the Small Business Doctor provides the full-suite of strategic fractional CFO services.
Learn all about accounting, finance, business strategy, economics, and financial math from the basics to the advanced. I've taught and tutored these subjects for years, helping everyone from teens to postdocs, CPAs and MDs.
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One way to see how economic transaction costs are internalized within a company is in the SG&A Expense lines of a company’s income statement. All of the selling and administrative expenses are internalized transaction costs, and so is the insurance expense within the general expenses category.
This is not the only place where transaction costs are found in the financial statements, but it is a good clear place to see them. These expenses would not be incurred if the real world involved frictionless transactions as described in economics textbooks.
Economics literature on transaction costs traditionally distinguishes between three primary sources in the private sector. They are so-called Type 1 employees, the trade industry and the FIRE industry. The trade industry is wholesale and retail stores. The FIRE industry is finance, insurance and real estate. In the private sector, most if not all of the Type 1 employees’ salaries and costs would be classified as part of the SG&A expense.
These employees have job titles like manager, administrator, sales staff, lawyer, accountant, foreman, inspector, security staff, human relations staff, public relations staff, or clerk. I refer to these company employees as SG&A employees. More generally I refer to them as SG&A workers, which includes both employees and external service providers.
SG&A workers grew 322% as a share of the American economy from 1870 to 1970. Their growth rate in the private sector at 381% was actually higher than the 286% growth in the public sector.
The growth of SG&A workers within the American economy over the past 150 years is the largest single contributor to the growth of transaction costs.
As a fraction of the American economy, the wholesale and retail trade industry grew by only 13%. Even the fast-growing finance, insurance and real estate industry sector only grew by 190% over that hundred year span. The private sector SG&A worker growth rate was double that!
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Over the years, I have happily and confidentially advised a wide range of clients from a plumber near Pittsburgh to a robotics startup to a multi-state pediatrics practice. I am always your primary point of contact and hold myself accountable for your success.
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Hi there! I'm Matt. I'm a Christian, husband and father of four. I'm a graduate of Calvin, Harvard, Cardiff and Johns Hopkins Universities. I have a PhD in Economics, an MBA in Finance and an MS in Data Analytics. I'm a numbers guy who can communicate well!
I began this service to work directly with the small and mid-sized business owners who grow our great country's economy. Since 1999, I've worked with owners across industries from high tech IT and robotics to small farmers and artists. I've also helped and advised nonprofits from churches to civic organizations.
I also served as a Finance Staff Officer and eventually as the National Division Chief for Measurement Research within the US Coast Guard. The research and methods I created there continue to guide strategic decisions to this day.
I enjoy being active outdoors, especially in wild lands. Hiking, biking and fly fishing are some of my favorite pastimes.
I also love dogs! I'm an AKC obedience evaluator, and I train service and therapy dogs.
Operating Expenses Disguised as Inventory
Companies need to keep some amount of inventory. When I go to a home repair supplier, I expect them to have the copper pipe I need in stock. When I go to my local bakery, I expect them to have the macarons I crave in stock. When I go to my local grocer, I expect […]
Big companies are incentivized to increase product specialization and complexity. Why?
Our culture values specialization. Having specialized skills often leads to outsized material benefits. It also often results in praise and social status. Consider the social recognition that would be given to a medical doctor who is a primary care family medicine doctor compared to that given to an orthopedic surgeon. They are both highly educated, […]
Transaction Costs in the American Economy from 1870 to 1970
What Are Transaction Costs? Transaction costs are often overlooked in economics and textbook finance. In real life economics, however, they play a very significant role. In corporate finance, you can see many of a company’s transaction costs located in the selling and administrative categories within the Selling, General and Administrative (SG&A) section of their Income […]
During the Great Depression, British economist Ronald Coase wrote a famous essay on the nature of the firm or company. As with America at the time, many free-market economies were also enduring a severe and difficult economic depression. The Soviet Union, however, was growing to become a significant industrial economy. This led to a debate […]
Transaction Costs and SG&A Expenses
Selling, General or Administrative Expenses One way to see how economic transaction costs are internalized within a company is in the SG&A Expense lines of a company’s income statement. All of the selling and administrative expenses are internalized transaction costs, and so is the insurance expense within the general expenses category. This is not the […]
What Is the Balance Sheet? The Balance Sheet is one of the primary financial statements used in accounting. The Balance Sheet shows a snapshot of a business’s financial position at a point in time. There are two sections: Assets and Liabilities & Equity. Not only does the Balance Sheet show individual and composite account balances, […]
Statement of Comprehensive Income
What Is the Statement of Comprehensive Income? The Statement of Comprehensive Income is a financial statement for items that are not included within Net Income from the Income Statement but nevertheless do affect the equity section of the Balance Sheet. The Statement of Comprehensive Income shows total comprehensive income. The Statement of Comprehensive Income includes […]
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