JWA

Business Development Manager

Personal Narrative

Start up advice, par for the course or am I over reacting?

I work for a tax credit service (has permanent credits like R&D not just ERC).

I have been there for about 2 months. The company has been in business for about 6 or 7 years.

About a month ago, we had an all company meeting and the main founder said that the company was in a really good spot, breaking even regularly and goal this year to really grow it from there.

Just yesterday, the founder was yelling at all the execs and other founders (in a meeting next to the main office space) something to the effect of "we're in jeopardy of losing our f****** business". Later he calmed down some

When we asked the interim president what that was all about later, she stated is was targeted at one of the other founders in relation to how Sec. 174 was being tracked poorly and not handling discussions with clients well (all this has to deal with the R&D tax credit space , our primary focus as a company)

I like this job better than my last (major HCM firm) but that level of change between the two has me nervous as a sales guy with effectively one thing to sell in a time that it is super hard to sell since the tax law is just poor and most are trying "creative" ways to file taxes to avoid the impact of R&D on their business now....

Im at a point where I need to start producing but its tough to find those willing to follow the tax law and prefer to operate in a grey area since they are confident about the 1-2% audit risk.

Ive been planting lots of seeds of partnerships, some potential to start pulling them out and making commissions but just an iffy thing to over hear. Thoughts?

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10 comments

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Sunbunny31

Politicker

3

Sr Sales Executive 🐰

The most concerning thing for me is that what you're selling isn't selling. Overall, is the product successful? Or is it going to be a tough slog regardless?

jefe

Arsonist

4

🍁

It's really the only thing that needs to be considered here

CuriousFox

WR Officer

2

🦊

don't say it....don't say it...don't say it...

I considered your mom last night

oldcloser

Arsonist

2

💀

someone had to

oldcloser

Arsonist

3

💀

Yep, this cuts right through all of the thoughts and second thoughts. If the product fits a market that can't or won't buy it, it doesn't fit. I'd be scouting, but not for the water cooler reasoning. You've got a product issue.

JWA

Personal Narrative

0

Business Development Manager

Simply put the main thing I sell is our service to help with the R&D tax credit.

The IRS code over the last few years has put a damper on the ability to sell largely because the businesses that used to experience a deduction utilizing it and even cash back likely now have increased tax bills.

Not cause of the credit but because of the way they have to report their expenses as income when it relates to R&D.

So effectively, business owners and CPAs we work with or try too, are opting to "strategically" report their numbers in a way that avoids the large tax bill.

They get that there is a risk of audit and if they do then they will cry when it happens but imagine your small business's tax bill jumping several hundreds of thousands of dollars because of the industry you work in.

The IRS code is being discussed in congress but there is no guarantee it will change.

My product fits all the companies still, its just that all it does is slightly lower the increased tax bill if they are choosing to report correctly.

I know some of the business owners and CPAs out there are through and through by the books but I get why many would try to play their cards strategically to try and sneak by the bad tax code.

buyhighselllow

Good Citizen

1

sales

I worked in this space for a long while. My 2c:

Rd tax credits are very tough to sell; you’re going up against the big 4, who probably has an established partnership across other areas of tax and strategy. Very easy and comfortable for a firm to go with them for the work vs an unknown.

Rd tax credits are most beneficial on good years when they invest a lot in the business. In down markets when orgs are at a loss, they don’t care cause: 1- they can put it off without consequence and just have a bigger claim next year. 2- they don’t want the capx to get less of an roi than previously, and 3- the folks internally have other initiatives that are more pressing when they evaluate the time:value of this exercise vs the return previously.

Also, companies who are running at a loss don’t give a shit cause they cannot see any tangible benefit. So why pay $xx,000 for this exercise if they can’t get anything out of it.

Layer on 174 which basically makes a lot of orgs profitable (who would be otherwise running in nol’s) by amortizing their losses over 5 years and capped at 20% and these orgs are focusing on 174 amortization, not the rd tax credit. And it also impacts the tangible benefit of the rd tax credit in year 1.

Lastly ill say; the rd tax credit is an afterthought for the tax team; right now they see how orgs are desperate for cash (they’re the ones with that visibility) and are the tightest with the purse strings.

It’s a very tough time to be in that space unless you’re a big 4. If you dont sell another product I would recommend jumping ship cause it’s going to be a massive uphill battle!

buyhighselllow

Good Citizen

1

sales

Also worth mentioning, unless you’re a big 4 or a true consulting firm, you probably aren’t touching 174 due to how new it is; and many folks don’t give a shit unless you can help with that.<br><br>I see you’re an SDR, stick with it for the experience, but continue looking around; tax is a small world, and not that promising of an area to sell long term. Very boring too lol

lowhangersalesbanger

Executive

0

Director of Sales

Selling a cold product to a cold market is never good whether you are at a startup or in the fortune 100. Keep the resume circulating and never turn down an interview. If you want to ride it out at least build a pipeline of jobs for when you need one.

GDO

Politicker

0

BDM

sell somthing that's easy to sell and you believe on

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