Can I Collect Rent and Charge a Late Fee?

rent sign

Here’s a recent question from one of the members of INreia– the Indiana Real Estate Investor Association, which meets monthly- SECOND TUESDAY- in downtown Indianapolis.


Hi Matt,

QUESTION-    I am a friend of Amy Siewe’s and I have attended a couple of the INREIA meetings as well.  I was wondering if you could answer a quick question for me regarding collecting late rents from tenants.  I have a tenant who is late on rent and owes a $75 late fee.  If I accept the rent without the late fee, will I legally be unable to pursue the $75 late fee in Indiana?

ANSWER-    No, you can collect the rent and add the late fee to the unpaid balance owed.  Just communicate that intent to the tenant, and don’t accept any “paid in full” check.  Eventually, take the late fee out of the security deposit.

What You Must Know About Use Tax


Have you ever heard of use tax? Did you know such a thing existed? If not, you may not be familiar with what it is and how it works. Actually, the majority of practice owners we talk with are not. Here’s what you need to know about use tax and what you should do to protect yourself from an expensive audit.

Let’s call use tax the brother of sales tax. Sales tax, as you are likely aware, is assessed on items you purchase for your practice — most of the time. Vendors who sell you product like supplies, furniture, and IT equipment may or may not be required to collect sales tax from you. If you are buying all of these items from an in-state provider, you are most likely in good shape. However, out-of-state vendors may not have a responsibility to collect sales tax from you. For instance, a vendor from whom you purchased a product over the internet or through a catalog may not collect sales tax on the sale. Contrary to some belief, this is not a built-in discount — this is where its brother, use tax, kicks in.

Most states have a use tax that is self-paid by the purchaser of products when sales tax is not collected. So when your dental practice purchases a new chair online and sales tax isn’t assessed, you are then responsible for reporting and paying use tax on this purchase. In addition, if you paid sales tax on the purchase but at a lower rate than your state’s sales tax rate, you may be liable for the difference. Say you purchased an order of cotton balls online and the supplier collects 5% sales tax on the order. If your state has a 7% sales tax rate, you should then report the 2% difference to them and pay it.

The most important thing to be aware of here is that someone is responsible for paying some tax on these purchases (unless they are specifically exempt, which varies by state and usually includes prescription drugs, etc., but more on this later). If a vendor forgets or didn’t know they were supposed to charge you sales tax, it’s your responsibility to pay it as use tax.

Why haven’t you heard of this before? Many dentists and small business owners just aren’t aware of the use tax. Historically, there haven’t been a lot of audits of small firms for owners to be concerned about it. But this is changing. With states seeing massive budget shortfalls, they are looking anywhere they can to find missed revenue. In many cases, they are able to go back 7 or more years to audit your purchases and identify purchases made where sales tax was not assessed. When an audit occurs, not only is there risk of a tax assessment but also penalties and interest.

As mentioned above, there are some items that are exempt from sales and use tax. These vary by state so I’m going to share with you a link to Iowa’s exempt items list which is specific for dentists. Indiana’s is much more vague in identifying specific exempt items; however, the rules for some states often have similarities and overlap in their definition.

So what should you do for your practice? Be aware of the purchases you make and if you are paying sales tax at the time of purchase. If you are buying products online primarily to save sales tax, know that this isn’t a legitimate savings strategy. If you feel you have made purchases where sales tax has not been paid, consult with your dental CPA or tax adviser to develop a plan to address the exposure. And by filing now, you will shorten the period of time with which an auditor can go back. Usually timely filing of returns starts a statute of limitations on how far back an audit can go – even if it’s a zero tax return.


This article was submitted by our friends at Veros Dental | 5955 South Emerson Avenue, Suite 500 | Indianapolis, IN 46237 | 317-452-4580

Would You Invest in this Company?


Many of my clients are searching for financing and/or investors to fund growth. There are several criteria that we use to judge whether or not a company can get funding and from what source the funding will be sought. Here is a company that is in need of additional funding. Based on the information below, would you invest in this company?

Here are the financial facts for the year 2010:

Revenue of $2.2 million
Expenses of $3.5 million
Operating loss of $1.3 million
Balance sheet debt as of 12/31/2010 of $14 million

Additional facts: From a profit and loss perspective, revenue has not kept up with expenses. The company has been spending more money than it takes in each year for the last several years. To fund the operating losses the company in 2008 borrowed $459k, in 2009 they borrowed $1.4 million, in 2010 they borrowed $1.3M and for projected out into 2011, they will need to borrow an additional $1.6M. Total borrowings are now about 6X annual revenue. Management: a new CEO was elected by the board 24 months ago and he is taking a “hands off” approach to this funding problem and leaving it the management team who are split, ½ of them want to cut expenses and the other ½ want to continue the historic expense trend because the company will loose creditability in the market if they cut expenses; so they want to increase expenditures.

Currently the company has the $14 million borrowed from the following sources:

$6 million – Current customers
$2.6 million – The company’s employees retirement fund
$1.6 million – various vendors
$1.1 million – largest competitor
$ 900 thousand – second largest competitor who just had a plant wiped out
$ 857 thousand – local police and fire department
$ 485 thousand – foreign sister company
$ 300 thousand – domestic security force
$ 228 thousand – vendors who supply fuel for company
$ 185 thousand – vendor who supplies raw product

You probably have already figured it out that no shareholders, board of directors, CEO or management team could be this irresponsible in today’s economic climate. Nearly everybody knows that an organization cannot continue to borrow money to fund on-going losses without going out of business. This story is not about a small business, it is the current financial state of the U.S. Government, all you need to do is change millions to trillions and change thousands to billions.

The key: current customers = U.S. individuals and institutions, employee retirement fund = social security administration, various vendors = foreign nations, largest competitor = China, 2nd largest competitor = Japan, local police & fire departments = U.S. Civil Servants, domestic security force = U.S. Military Retirement Fund, etc.

The U.S. Government has outstanding debt of $14 trillion dollars. Here is picture of what $14 trillion dollars looks like. $1 million is 100 packets of $10,000 (a packet is 100 – $100 bills). $100 million is one 4X4X4 pallet of stacked $100 bills. A billion dollars $1,000,000,000 (9 zeros) is equal to 10 pallets a $100 million each. A Trillion dollars is $1,000,000,000,000 (12 zeros) or equal to 10,000 pallets of $100 million each. The U.S. Government has outstanding debt of 140,000 pallets of $100 million on each one.


Our government is being ran by a CEO/President with no management experience, of his hand picked management team of 12 (the Cabinet) only 3 have had outside corporate business management experience. Our Congress is made up of 435 elected representatives of which 162 have some type of business experience coupled with a Senate of 100 which 26 list any type of business experience.

We are the primary lenders and suppliers of funds to the U.S. Government, 1) take up pen and paper and write a letter (or email) to your elected representatives and tell them that the spending spree of the U.S. Government is irresponsible and must change, 2) forward this email to as many people you know and ask them to read it and take action. The tax payers who are financially responsible in American have been too silent for too many years. Our government leaders need accountability – make it your goal to communicate with your elected (state and federal) representatives monthly – that is the best thing we can do to get this country back on track. It is up to the silent majority – we have to become the LOUD MAJORITY.

To Your business Success:

Dan Lacy
phone: 765-644-8887

Take your business to a new level in 2010


Take your business to a new level in 2010 .  Attend this amazing & free class sponsored by Xpedishon Coaching

Xpedishon provides group coaching to solopreneurs and small business owners. Xpedishon was co-founded by Rainmakers CEO Tony Scelzo, Matthew Griffith, Ed Turi, and Jack Klemeyer.  We are looking for 150 individuals who want to grow their business to over $500,000 per year in revenue.  We have a proven system that has helped hundreds of individuals signficantly grow their business. 


March 19th , 10:00 – 11:30 am   

Details & Free Registration for the March Xcelleration Event.


  • Are you willing to invest 90 minutes of your time to find out how to significantly grow your business in 2010? 
  • Are you done with this slow economy?   Ready for better times?
  • If you are frustrated with the challenges of running your business in this tough economy we would like to invite you to a free workshop to show you how you can double and even triple your business in 2010.  

Matthew Grffiith, Tony Scelzo, Jack Klemeyer, and Ed Turi, the owners of Xpedishon Coaching, will lead an inspiring and dynamic presentation where you will learn- 

  • The three areas that you must focus on to grow your business.
  •  The top limiting beliefs that you must eliminate before you can ever succeed in business.
  • How to structure your business to grow bigger than you ever thought possible.  

People come to Xpedishon, because they are motivated and committed to growing their business despite the challenging economy.  If you are committed to growing your business in 2010, then this free one-hour workshop is for you.   

When: March 19th  
Where: Franklin University, 4th floor, (Allisonville and 82nd)   
Time: 10:00 – 11: 30 am
About Xpedishon –


Xpedishon is a group coaching process that is known for its ability to quickly help clients get high impact results. Owned by Tony Scelzo, Jack Klemeyer, Ed Turi, and Matthew Griffith.  All are highly experienced coaches and successful entrepreneurs.   

Testimonial:  Hear what Chris Reed has to say about Xpedishon  

“Xpedishon was an incredible challenge for me as VP of Business Development for FileEngine. The coaching and accountability caused me to think outside my head and see things coming that I wouldn’t have noticed otherwise. The process helped me to realize that I had an entrepreneurial spirit and I needed to start my own business. The coaching, accountability and the group helped me through so many of the trappings and pitfalls that can bring a new business to its knees. Prior to Xpedishon I wouldn’t have dreamed I could have started my own company and within 120 days be steering a $250,000 a year company! I have been able to achieve my goals and I have grown personally because of this process.”    



Business goals & limiting liability


Chances are that your lawyer has never encouraged you to establish business goals as a legal strategy.  In this blog, I hope to convince you that goal setting is a great way to reduce your chances of getting sued or having other legal troubles.  Of course, setting goals is only part of the battle.  What’s a goal worth, if you never take the next step: Implementing a plan to meet those goals?  But, let’s start here- Goal Setting.

I think business goals are best defined as components of your “Vision.”  What is it you are trying to create, build, rebuild or restructure?  What will your company look like in 12, 25, 60 months from now?  For example, I am involved in helping to launch a virtual law service-  IndianaVirtualLaw has a vision of its intended future.  It is becoming the best, online law firm providing a wide range of legal forms, documents and other “unbundled services” with no fewer than 80 regular clients and 200 annual clients within 12 months.  IndianaVirtualLaw intends to be an automated, forms-driven service that is almost entirely online to serve a specific market segment.

I could describe the vision for IndianaVirtualLaw in more detail, but you get the idea.  The more specifically I can defined the vision of any company, the more likely I will be able to create a plan to reach that goal- realize the vision.

Once you have a well-defined vision, you can determine the steps required to move your company from where you are today to where you need to be to realize the vision.  And this is the stuff of business planning.

With a well-defined vision and business plan, you can chart your conduct, define operations, establish employee roles, etc.  You can create operations manuals, policies, procedures, etc.  And in those operational tools, you can identify risks and create ways to keep customers happy, safe and out of the courtroom suing you.  Remember that HAPPY CUSTOMERS WON’T SUE YOU.   

Your company will also be able to manage cash flow better.  That reduces disputes with vendors over payments, because you won’t be late on payments.

If cash flow is good, you can avoid doing business with less desirable customers and clients, especially slow-paying customers and clients.  Thereby, you can avoid having to hire attorneys or collection agencies to collect your accounts receivable.

If your company is functioning well, you can afford to retain professional advisors, like lawyers, CPA’s, insurance advisors, business coaches, etc.  And, this enables you to implement preventative measures that reduce liability risks, rather than the more costly way of reacting to problems.

Etc., etc., etc. 

The advantages of setting goals and implementing business plans are enormous.  So, I think it is critical that business attorneys understand business to help their clients with goal setting and planning as part of the client’s asset protection plan.

Why Your Business Must Have An Operations Manual

Great idea!  Light bulb








Businesses fail.  Most businesses fail, because they run out of momentum.  You’ll hear that described in various ways, like: 

  • High debt service.
  • Shift in markets.
  • Poor cash flow.
  • Insurmountable rise in costs.
  • Inflation.
  • Recession.
  • Insufficient capital or “under-capitalization.”
  • And so on.


Those are just sad excuses for a business to fail.  In the end, every business failure is the result of the owners and managers failing to identify and plan for future opportunities and threats.  I am not a big fan of SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), because it usually does not translate into action.  SWOT sessions  make management feel good that they involved the whole “team,” but concrete action steps are not often listed, assigned to personnel and followed up later.


Done well, SWOT can benefit a business.  It’s just not done well often enough.


Another approach is more akin to Kaizen theory, which is generally defined as incremental but continuous improvement.  That works well, if a business has two key things:

1.  An Operations Manual

2.  Regularly scheduled meetings to review and improve the Operations Manual.


SYSTEMS!    That is the key to operating a business well.  A system enables a business to all these things as a part of what the business itself does:

  • Deliver the same quality good or service each time to every customer.
  • Identify quickly the cause of any problem resulting in lower quality.
  • Identify new customer needs and wants, which is often a signal for a new market opportunity.
  • Identify trends suggesting that your current offering of goods or services is becoming obsolete.
  • Reduce inefficiencies.
  • Reduce risks and losses.
  • Grow market share by effectively communicating with customers and future customers.
  • Identify new vendors, alternative sources of materials, labor-saving equipment/services, and strategic partnerships.
  • And so much more.


I’ve watched dozens upon dozens of businesses fail over the years.  In the final analysis, each one failed because each lacked systems.  None were fully committed to systematic business operations.  The owners and managers thought too much about making widgets and not enough about building a business enterprise.


So, what is your business doing?  Are you building widgets?  Are you simply creating or maintaining jobs for the owners or managers?

Or are you fully committed to building a business?  Are you developing the systems needed to build your business enterprise?

Recessions Offer Opportunities



During a recession, marketing is often the first budget item to be cut, even though marketing is the most important tool a business has during difficult times.  I would argue that now is a great time to make lemonade out of “economic lemons.”  There are at least two ways to do that.  First, consider this a time to reach out to potential strategic partners to develop co-marketing and co-sales opportunities.  You might also have opportunities to re-package, or distribute products or services differently to reach new customers or old customers in new places or ways.  Creativity can be developed, grown, nurtured and fostered, but only if creativity is first valued.


Does your company value creativity and calculated risk-taking?


Really?  How?


Secondly, consider whether your customers’ needs or motives have changed.  If so, your message should change to reflect new customer needs, wants, desires, anxieties, etc.  Consider a few examples recently shared by Raquel Richardson, owner of Silver Square, in a recent e-newsletter:


  • A-1 Steak Sauce’ changed its message to-  “A-1 Steak Sauce isn’t just for sirloin anymore.”  The target was hamburger lovers, and the strategy worked.
  • Dow’s Ziploc food bags saw increased sales when Dow shifted funds from glass cleaners to help introduce a new line of Ziploc freezer bags that protect the freshness of leftovers.
  • Quaker Oats developed new recession-driven messages:
    • “Grain products are inexpensive sources of protein.”
    • “Oats for breakfast cost just pennies a day.”
  • Lipton pushed up its soup sales by promoting packaged cups of soup as both convenient and inexpensive.

Several companies have gone so far as to mention the recession in its messages.  Wendy’s message is: “Look, I know you have less to spend these days, but that doesn’t mean you have to eat less.”


The list of companies that have enjoyed increased market share by spending more on marketing during recessions is long and storied.  Interestingly, in each case, the competition spent less on marketing and tried to “ride out the storm.”  When your competitors are avoiding risks and pulling back, they are potentially losing both today’s and tomorrow’s customers, and future opportunities.  That’s your chance to gain market share that will likely mushroom when the economy recovers.

Be a Pelican- Dive In!



Two weeks ago, I was sitting on a beach, looking out across crystal clear blue Caribbean waters with the sun about three hours from setting.  That’s when I noticed this pelican fishing.  Pelicans are large birds, so it takes some effort to lift off, clear the ocean’s surface and fly nearly straight up 50 feet or so.


The pelican slowly drifted in flight a few yards, searching for fish just below the surface, 50 feet in the air, and then the pelican folded in its wings to its sides, and would dive straight down to the ocean.  It torpedoed into the water, using its beak to stab at and capture a meal of fresh fish.


Amazing.  I watched that bird for nearly an hour.  It must have made 15 dives while I was watching.


What in the World does this story have to do with business?


You need to be “pelican like” in your business operations.  I know, I know. . .  we’re in a recession.  You have to watch cash flow.  You can’t afford to make mistakes.   Blah, blah, blah.


What was your excuse when we weren’t in a recession?  Frankly, you can’t afford NOT to take risks.


Too many businesses are too passive in exploring growth opportunities or bettering existing operations.  In a recession or in good times, you’ve got to be calculating, smart and aggressive.  Sometimes, you’ve got to go for it, just like a pelican diving for a meal!


You can be smart and aggressive.  You can take calculated risks.  Sometimes, a pelican dives but misses the fish.   Sometimes, businesses take chances that don’t work out well.  However, doing the same thing over and over without innovation, calculated risk taking and determination leads to slow deaths, for pelicans and businesses both.


Virtually every successful entrepreneur had several failures before their first success.  Then again, successful entrepreneurs understand the art of being “pelican like.”


What are you doing this week to catch more fish?

Vacations Are Essential to Good Business Operations



If you run a business, you need a vacation.  In fact, you need to take a vacation regularly.  And NOT just a vacation to “recharge your batteries.”  I’m talking about a great vacation that makes both your personal life and your business life better.


Here’s what I did on my recent vacation and how my experience can help you as a business person.


Rule #1-   Do NOT try to “get away from it all.” 


DO take your cell phone.  Do check your email.  Do call into the office.


It’s hard to relax on vacation when you’re stressed out about your office, missed calls, office emergencies, clients or customers looking for you, etc.  The notion that we have to separate our business life from our personal life with a “Chinese Wall” is completely ridiculous and completely unrealistic.  If you feel better while on vacation by checking in with your secretary, assistant or manager a few times, then do so.  Don’t WORK, but do check in a few times.  You’ll have a better, more relaxed and fun vacation, if you know that you’ll return home and not have to face a catastrophe.


Rule #2-   Eat well.  Exercise.


Vacations are  a time to replenish, refocus, re-establish and renew.   That applies to our minds, bodies and souls.  Our hectic lives at home wear us down and wear us out.  We fall into bad eating habits and exercise routines.  You can stop those bad habits and establish new ones during vacations.  In fact, establishing good habits is really the best thing you can do on vacation.


I just returned from sailing through the Caribbean, and time in Panama and Costa Rica.  I always wanted to sail through the Panama Canal.  Now I have!  It was fun, adventurous and relaxing.  And, I ate well.  There are no fast food or drive-thru restaurants in the mountains of Costa Rica or along the Panama Canal.  I ate locally cooked rice, beans, chicken, plantains, etc.  Normally, I try to cut out caffeine during vacations, but I wasn’t going to pass up fresh coffee served at the haciendas in Costa Rica.  I did refrain from processed foods almost entirely, and I exercised.  Now my job is to get past the difficult first week back and stay on track to eat well and keep exercising.


Rule #3–    Read.  Something fun.  Something educational.


I read often at home and every day at the office, but there is always a growing stack of books and magazines by my bedside table.  Vacations allow me to read important business books and books of leisure.  I also read those magazines that have stacked up.  I read the magazines first, usually in the airport and in the plane.  I cut out the articles I want keep or read again.  Then, to lighten my suitcase, I throw away the other parts of the magazines.  I save the books for the beach!


Rule #4-   Come Home With Ideas.


Take some paper and a pen.  This is a time to reenergize and become motivated to be a better person and businessman (businesswoman).  You should outline ideas, hopes, concepts, aspirations, etc. that you’d like to accomplish when you return home.  Do NOT rewrite your business plan.  DO think about larger, exciting and interesting ways to come back from vacation and become better than ever.  Consider a few new ideas that you could implement when you’re back at it next week.  If you took the right books and magazines, you’ll have new ideas that excite you about the future of your company, firm or career.


And this Rule #4 applies to your roles as a father, husband, wife, daughter, girlfriend, friend, partner, etc.  This is not just about business.  I came home with ideas about being a better friend, father, son, brother, etc.


My financee and I spent hours on vacation talking about her law immigration law practice, our pending nuptials, and our future together.  We took a very fun “marriage workbook” with us, and had a blast going through it.  We talked about a wide range of topics, both personal and professional, and we came back ready to take on the World together.


Rule #5–    Make It Memorable


Have a great time.  Try doing something you’ve always wanted to try.  Maybe try white water rafting.  Or deep sea fishing.  Or, sailing through the Panama Canal.  Whatever it is, give yourself reason to remember how good it felt to reward yourself with time away from your routine and sources of stress.  Take a few vacation photos and tape them to your PC or desktop.  If you can remember your positive vacation experiences, you’ll remember that the routine stuff is worth it.  And, you’ll be more likely to take another vacation sooner than later.


Rule #6–   Follow Up When You Get Home


Now that you’re back, make the most of your vacation.  Schedule time on your calendar, or in your PDA or planner to follow up with things planned on your vacation.  Do these things:

  • Do eat better.
  • Do get better sleep.
  • Do exercise.
  • Do implement those business concepts, plans and goals.
  • Review your notes and the magazine sections you kept.
  • Do make changes in your personal life to feel more successful as a father, daughter, wife, etc. . .  and businessperson.


Here’s a final idea. . .  print a copy of this blog today, and put that copy in your favorite suitcase.  Tomorrow, schedule your next vacation.  Then, when it’s time to pack the suitcase, pull out and read this blog again.  Pack your magazines and books.  Get on the plane and start at the top with Rule #1.


Do these things, and your business will benefit tremendously.

“Branding Can Save Your Business”- Class Next Week

There are a few spots left for the class Kyle Lacy and I are teaching on branding and legal protection for brands.

If you’re serious about saving, growing or starting a business, branding is vital.  Protecting that brand is equally important.  That’s why you should attend this class.

Let me introduce you to Kyle Lacy.  Kyle is a social media mastermind, truly.  Check him out at or

My law firm does a lot of trademark work for our clients.  We trademark company names, product names, service marks, tag lines, etc.  We also develop strategies to protect names and logo’s

Kyle Lacy develops marketing strategies that utilize great branding.  

Together, we are going to teach how to develop a brand strategy and then legally protect it.

March 10, 2009 ,  12:00 – 2:00 P.M.         8604 Allisonville Rd. Suite 300, Indianapolis, 46250