Yesterday, the Trump administration released their proposed tax reform bill. It contains several proposed changes to the current tax legislation, with the key points for business owners being that the tax brackets will be simplified from 7 to 4 income groups, standard deductions are nearly doubled and corporate tax is cut from 35% to 20%. Though the tax plan does not address all points that have been suggested by GOP legislators, the proposal would help small business owners significantly, as they would see their tax rate cut nearly in half. Kevin Brady, author of the bill and Chairman of the House Ways and Means Committee, hopes to get the bill passed through the House by Thanksgiving, though the bill as it currently stands will likely be edited over the weekend before it faces a scheduled markup by the Ways and Means Committee on Monday. Read below for more details on the proposed bill.
E-commerce news this week gives e-commerce owners something to celebrate, as Deloitte’s recently released 2017 Holiday Retail Survey shows that for the first time ever, shoppers plan to spend more of their holiday retail budget online than in-store (51%). This is big news for e-commerce owners, who should plan accordingly by preparing to meet higher capacity and attracting customers with the tried and true method of promotional holiday sales, perks and discounts.
New in e-commerce listings this week is a $140K portfolio of an Amazon Merch and a Fulfillment by Amazon business, with diversified revenues across 5 profitable storefronts, rapid revenue growth of c.18% monthly (compound) over the trailing six months, and a lean and scalable cost structure driving net margins of over 70% in the trailing 12 months. If you are interested in learning more about this profitable portfolio, be sure to request a prospectus expeditiously, as we have already received several interested inquiries.
In event news, FE is gearing up for MicroConf EU in Lisbon next week, where we will be sponsoring the main event! Founder Thomas Smale will also be speaking at the event on “Lessons From Over 100 Million Dollars in Deals.” If you will be attending the event, or will be in the area following WebSummit, shoot us an email so we can set up one-on-one meetings.
Continue reading below for more on the Trump administration’s proposed tax plan, Deloitte’s predictions for the 2017 holiday retail season, and Microsoft Azure’s partnership with UTC.
Deal Highlights
New:
E-Commerce – Amazon Merch & FBA Business – $6K gross/mo
- Diversified revenues across five profitable storefronts
- Hundreds of unique designs driving clear synergies across platforms
- Rapid revenue growth reaching a 18% compound monthly growth rate over the trailing six months
- Lean and scalable cost structure driving net margins of over 70% in the trailing 12 months
- Low owner involvement
Yearly net profit: $56,000
Asking price: $140,000
Sold:
Affiliate – Travel – $8K gross/mo
In the News…
Trump Administration Tax Proposal
The Trump administration released their proposed tax reform on Thursday, highlighting changes to the income tax brackets, business taxes, and individual and household deductions.
Key components of the new tax plan simplify the individual tax brackets, so that where there are currently 7, there are now 4 proposed: 12% ($0-45,000), 25% ($45,001-$200,000), 35% ($200,001-$500,000), and 39.6% ($500,001 or more). The standard deduction has been raised from $6,350 to $12,000, but personal exemptions have been eliminated altogether. State, sales and income taxes are also no longer deductible under the new plan. The deduction for childcare has been raised to $1,600, while the mortgage interest tax deduction has been cut in half from $1 million to $500,000. Small business owners will be pleased to know that corporate taxes have been cut from 35% to 20%, effective immediately and permanently if the bill is passed. The Trump administration has communicated its interest in passing the bill through the House by Thanksgiving and the Senate by Christmas.
While the initial plan has been released, many members of the GOP have suggested that the bill could be substantially rewritten over the weekend before a scheduled edit by the Ways and Means Committee on Monday.
Deloitte Predicts E-commerce is King of the Holiday Shopping Season
In a recent survey of over 5,000 consumers, Deloitte’s 2017 Holiday Retail Survey found that, for the first time ever, holiday shoppers are planning to spend most of their shopping budget online this holiday season.
In a rather unique sequence of questions, Deloitte asked of their respondents: “What percentage of your total holiday budget do you expect to spend: online via a desktop or laptop, online via a smartphone, online via a tablet, in-store, catalogs or direct mail, or other?” Deloitte found that 36% of holiday budgets will be spent on a desktop or laptop, 10% on a smartphone, 5% on a tablet, for a total of 51% online. 42% of respondents plan to spend money in-store, and only 7% of shoppers’ budgets will be spent via catalogs or direct mail. This majority in e-commerce spend reflects a 4% increase from last year, which showed respondents planned to spend an even split of 47% and 47% of their holiday budget in store and online. Household disposable income is quite comfortable this year, as 81% of respondents report that their financial situation is the same or improved as last year, which is up 63% from five years ago.
E-commerce business owners should plan on a heavy shopping season, and stock up accordingly. It’s time to get holiday promotions and sales underway, as this is a proven way to attract more business to stores. We wish the best of luck to our e-commerce clients this season, and are here to help with advice should anyone run into roadblocks!
Microsoft Azure to Partner with UTC
Microsoft Azure and Dynamics 365 have formed a strategic partnership with United Technologies, a tech conglomerate that builds and services products from aerospace engines and elevators, to be used in several of UTC’s businesses.
One of their many companies, Pratt & Whitney, plan to use Azure and Dynamics for cloud-based field service, sales and marketing to improve upon their customer experience resources. Another large company under the UTC umbrella, Otis, will use the platforms for its service technicians and sales teams. Otis manufactures elevators, escalators and walkways, so their customer experience needs are slimmer than their technician support needs. The variety in use demonstrates the flexibility of Azure’s and Dynamics 365’s capabilities in cloud-based computing. Of the partnership, UTC chief digital officer and CIO said “At UTC, we build products and services that are vital to business and impact lives everywhere. Through digital transformation, we are raising the bar on our capabilities to predict, prevent and respond to our customers’ needs. Collaborating with Microsoft, and leveraging its intelligent cloud, we are changing how we define the customer experience.”
Microsoft Azure also landed a deal with Chevron, who signed a seven year partnership to make Azure its primary cloud provider.