Jun 07 2009
Hi All,
Just wanted to let you know that I’ve managed to purchase a new, and what I consider, better domain name for this small business/start your own business blog and will be moving things over there over the next few weeks. I have not yet done a 301perminent redirect thingie yet and won’t do so for a while - at least until alll content here is moved over (about three weeks), but you can go there now. The new Site is:
Jun 07 2008
Part of a being an adult is adequately managing your finances and this is especially true for business owners. Unlike the federal government, individuals and businesses live on budgets and need to stick to them to avoid unpleasant situations like bankruptcy. A few basic rules to follow are:
1. Live below your means. If you make $100,000 a year, live as though you made $50,000. Don’t build up unnecessary debt. A business owner needs to be ready to handle unexpected emergencies, and that is easier to do if you are fast and maneuverable, with little debt.
2. If you have debt, pay it off as quickly as possible.
3. Build up an emergency cash fund. Try to set aside enough cash for you to live and the business to operate for a minimum of three months, and six months is much better.
4. Take advantage of legal tax loopholes. If you can save money by leasing a vehicle rather than purchasing one, then lease. If the opposite is true, then purchase. Do what saves you the most money, paying particular attention to taxes.
5. Pay credit cards off in full at the end of each month. Credit card interest is high and cash eat you alive if you allow it.
6. Take advantage of pre-pay discounts. For instance, if you advertise in the newspaper and they offer a ten percent discount for prepaying a year’s worth of advertising, realize that ten percent is better interest than the bank would pay you and pay for a year in advance to get the discount.
7. Buy office supplies and other consumables in bulk. You’ll save five to ten percent on the total.
8. If you fly for business, save frequent flier miles and use them later for free airline tickets, for items you can give to the sales staff as motivational tools and contest prizes, or give them to charity organizations for the tax write off.
9. And finally, think lean. Remember that Sam Walton, the richest man in America, drove a ten-year-old pick up truck when he could afford the nicest Rolls Royce. Think lean, be frugal, and be successful.
Jun 07 2008
Every small business owner needs to have a basic understanding of taxes, both state and federal, as well as any local taxes that may apply.
While everyone pays taxes, a small business owner has as a primary goal paying as few taxes as possible. For this reason small business owners need to save receipts for every purchase made. Keep track of all expenses, including the mileage you put on your car for business related trips. It all adds up, and with enough deductions, you reduce your tax bill.
Also, always pay business bills by check or by credit card in order to have a written record of the expenditure. If possible, avoid keeping petty cash in the office. If you must use petty cash, always get a receipt.
Some businesses do some business with others through bartering. This can be great for cash flow, but treat the barter like cash for tax purposes. Trade invoices with the other business and you’ll both come out ahead at tax time.
When it comes close to tax time or when you are planning the new year’s goals, it is always a good idea to look at possible capital expenses. Would you be better off buying a new vehicle, new piece of heavy equipment, or a new computer before the end of the year or after the end of the year? Or would you be better off leasing. Taxes bring up permanent questions such as these, with only temporary answers because the answers change from year to year as the tax code changes.
For this reason having a good tax preparer available as a hired gun is always a good idea. This can be a CPA, or a good non-certified accountant whom you trust. Or a lawyer who specializes in taxes. Generally if you have a very small business a non certified accountant is fine, and the larger your business gets, the more likely you are to need a CPA.
Jun 07 2008
Working for yourself is the American dream. Most employees have dreamed of being their own boss, and it has many benefits, but there are a few disadvantages to it as well.
Advantages of working for yourself are that you are responsible to yourself. Your destiny is in your own hands, as well as your financial future. You determine how much work you do, when you go to work, when you quit for the day, when you take a vacation, how long the lunch break will be, and if you really want to put up with a grouchy customer. The business is in your hands and you decide. Instead of griping about the bad advertising campaign that corporate came up with, you decide on an advertising campaign yourself.
Disadvantages of working for yourself are really the same as the advantages. You decide when you go to work, when you quit for the day, when you take a vacation, and how much you will make. All the while knowing, if you are a small business, that if you are gone the business is either not open, or if you have employees, that they are not being supervised by the person who cares the most about the business—you.
You have to make all of the decisions regarding health insurance, benefits, marketing, bookkeeping, management, and customer service. Owning and operating a business is a tremendous responsibility and not everyone is ready for or capable of handing the stress or the commitment.
Still, if you are one of those unique individuals with the spirit of an entrepreneur, then being in business for yourself is the only way to live. Many people in fact simply can’t imagine another way to live. Some people in this world are sheep, following others blindly.
Others are shepherds, preferring to lead. Pathfinders who make their own way. If you are an entrepreneur, you are one of the shepherds and will only be happy in business for yourself.
Jun 07 2008
Investors in your business are a dream many entrepreneurs wish for. Added capital from investment allows business growth, invigorated marketing efforts, new employees, new facilities and expansion. What exactly are potential investors looking for in your business?
Investors are looking for a way to make a profit from their money. A way for their money to make more money. In looking at your business as a potential investment vehicles investors are looking for a way to increase your profit, so that they can have a fair share of it as a return on their investment.
In looking at your business they want to see stability. A strong management team with good employees and little or no turnover.
They want to know that key employees will stay for the long haul, and they want to know how future personnel problems will be handled when they arise. An employee handbook, also known as a policies and procedures manual is a great tool to showcase this positive aspect of your business. If your company doesn’t have one, then this is a great investment for you to make in your company’s future.
These potential cash angels also want to know how their investment capital would be used. What would you spend the money on, and how would it benefit the business and make it more profitable. For this it is wise to have a strategic business plan prepared, outlining future growth, and how it would benefit the company.
A part of the strategic business plan should be the marketing plan. The marketing plan is a roadmap to increased profits through marketing communications such as advertising, promotions and public relations, and the ways in which these efforts will increase sales of your company’s products or services.
The investors will also want to know about the big picture. Where does your company fit in the overall market? This can be locally, regionally or nationally, depending on how far our business reaches out to gather customers. This should include anticipated future trends in the marketplace, and your competition.
Emphasis in the plans your strengths, and ways in which you can capture sections of the market that the competition can’t, and that you are not yet reaching.
Investors interested in your business is a sincere complement to you as a business builder, but don’t expect them to understand the business as you do. Take the time and effort to show them, on paper, how you and your business can help them help themselves.
Jun 07 2008
Health insurance is a much talked about aspect of small business today. Employees want it, and need it. Small business owners need it as well, and the prices are high.
The first thing to keep in mind with health insurance is that all policies are not the same, and neither are all health insurance companies. Shop around to get the best rates of course, but don’t assume that the cheapest is naturally the best. When you find a policy that fits your budget, check out the company. Make sure that it has an adequate rating, preferably A plus. Check with your state insurance commission and assure yourself that the company pays claims when they are filed.
Next, decide if you will be best served with a traditional insurance plan, or a PPC or HMO. HMO stands for Health Maintenance Organization. PPO means Preferred Provider Organization. This is a network of healthcare providers who offer services to the members of participating health plans for a lower than usual cost.
Usually these doctors and hospitals are made known to you through a list provided by the PPO. You can see another doctor under a PPO, but it is more expensive to see someone not a part of the network. In that case only a percentage of the claim is paid. With an HMO you are restricted to physicians who are members of the HMO.
After checking out the available options, also consider a high deductible combined with a Medical Savings Account. With a high deductible, usually $5,000, you are considered self-insured for the first $5,000 in medical expenses, but have the insurance available for catastrophe or unusual circumstances. This leads to very low premiums. Combining that with a Medical Savings Account is a good combination for many people.
The Medical Savings Account is much like an IRA for retirement. With this program you put aside tax-free income into the savings account, that can only be used for medical expenses.
When checking these programs out, remember that you have many options.
Don’t be afraid to take the details of a plan one company is offering into another insurance office to let them compare and make a competing offer. Health care is important, and making the right decision now could help you in many ways, including financial, down the road.
For a more in-depth look at health insurance for the self employed visit: http://simplehealthcoverage.com
Jun 07 2008
What type of bookkeeping is necessary to maintain a business, like many other questions, depends on the type of business. A large corporation will probably need a team of CPA’s on staff, and even a lawyer who specializes in tax matters. A small business though, an LLC, S Corp, partnership or sole proprietorship has simpler needs.
The small businessman may do much of the bookkeeping himself, or have it done by his administrative assistant using one of the many popular bookkeeping software programs out today, or even templates available for spreadsheets like Excel, Quattro and Lotus. The small businessman really just needs to keep track of income that comes into the business, money that goes out of the business, what it goes out for.
Saving receipts and making notes in the checkbook ledger are two of the most important parts of small business bookkeeping. You can only claim a legitimate business expense, and therefore claim a deduction if you have a receipt to prove it if challenged during an audit. Save all receipts, no matter how small, because they all add up.
One of the most important reasons to have good, accurate bookkeeping is tax time. Many business pay taxes on a quarterly basis, Some pay annually. Either way, accurate records are demanded by the IRS, and are the only way to limit your tax liability legally and to withstand an audit if it ever happens.
While most small business owners prefer to have someone else handle their taxes, and many prefer to delegate bookkeeping chores to an employee, is essential that the business owner understand the process of bookkeeping and the tax system. If your education didn’t include bookkeeping and taxes, check the local community college and see what they offer, and get an education in order to help yourself.
Jun 07 2008
Inexpensive ways to promote your new business are abundant. Here are a few examples:
1.Print fliers and distribute them on car windshields in the parking lot, post them on public bulletin boards, and put them anywhere else you can find.
2.Write and distribute press releases to local media. Include the daily newspaper, the weekly business journal, your city magazine, any alternative monthlies or weeklies, and the papers in the surrounding suburbs and small towns. Write the press release like a short news story, not an ad. Be objective and you’ll get printed. No hype.
3.Place cheap classified ads in the local shopper and the daily newspaper.
4.Call in and chat with your morning radio talk show host, and find a way to mention your business during the conversation. Then show up the next day at the studio with a dozen donuts. He’ll probably mention you on the air.
5.Take a journalist to lunch, and tell him or her why your business is news worthy.
6.Submit your web site to the search engines, is free.
7.Buy Pay Per Click advertising in the local section of the major search engines. You can limit it to as little as one dollar a day in spending.
8.Take a news reporter from your favorite local TV station to lunch. Tell her why your business is newsworthy.
9.Make a low bid on unsold inventory at a local radio station. You might pick up some twenty dollar radio commercials for a dollar each.
10.Use chalk talk. Use colored sidewalk chalk to put your message on a downtown sidewalk. Include your phone number.
11.Give your business card to everyone you meet.
12.Post a banner in front of your building for traffic to see.
13.Offer your services as a public speaker. You are an expert in your subject area if you say you are. When you make your speech, plug your business and pass out a business card.
14.Offer to trade web site links with other local businesses, and display their fliers and cards if they will display yours.
15.Write an ebook, and give it away free online. Include links to your web site.
16.Keep a mailing list, or email list of your customers. Send them a monthly newsletter, even if it is just one page typed. Offer them discounts for repeat business and bigger discounts for referrals.
Jun 07 2008
Creating a web site for your new business may be the most fun part of the entire process. It is something you can do yourself even if your expertise is limited.
First you need to decide what you want your web site to accomplish. Is it to be a selling site with a full shopping cart to sell your products online, or do you simply want to encourage customers to come in and see you or give you a call? This will determine the complexity. Assuming you just want a simple site, the first step is to create a domain name and register it.
If your business name is available as a .com, then that is your best choice. If not, check .net, .biz, .us, .info, .tv, .ws and .org. Chances are good that at least one of the names you want will be available.
If you have the funds and want to reserve some domain names for possible later use, do so. You can always park them with a redirect to your site.
Then find a web hosting service. There are many good ones available both locally and on the net. Some will have templates and wizards that will help you create your web site. Others require you to use a program like FrontPage or Dream Weaver, or write code in HTML. If that is the case, HTML isn’t difficult to learn and there are many tutorials available for free and many books on the subject, as well as classes at community colleges and computer training centers.
If you have experience making web sites, great. If not, now is a good time to get some help from someone who does, either in person or by reading a good book on web page design. Most will tell you to keep the site simple. Graphics look nice, but sometimes they slow down older computers and dial up connection modems, and could turn off the casual web surfer.
Making the web site simple but attractive is your best bet. Be sure to include a “contact us” section where a surfer can mail you, and it is also a good idea to offer a free ezine newsletter, a great promotional tool. Have fun with your new web site, because if it is fun for you then it will be fun and appealing to your customers and they will come back again and again, and eventually come in to see you.
If you need a Web Site for your business visit Artitude.com, or Strategic Web Success
My company owns both Sites. My peopel and I have been creating successful Web businesses sinc 1994.
Jun 07 2008
Types of insurance needed for a business will, of course, vary from type of business to type of business. If a business is larger than a one man sole proprietorship and actually has employees, then unemployment insurance is required, with premiums paid to the state government or a designated energy.
Also, with employees Workman’s Compensation insurance is required, which covers medical emergencies and injuries employees could sustain while on the job. Also if your business has employees you may be providing some sort of health insurance coverage as a benefit.
Determining exactly what type of insurance the business itself needs is a different story. How much risk is there in your particular business of liability? Obviously if the company owns or operates motor vehicles then at minimum liability insurance for the vehicles is needed.
It may be wise to pay a slightly higher premium for comprehensive and collision insurance to cover repair or replacement in case of accident. With regards to liability insurance, don’t just take the minimum required by the state. Most experts recommend having at least a million dollars in liability coverage on each vehicle.
Lawyers see deep pockets when company vehicles are involved in accidents, and the last thing you need is a half a million dollar judgement with only two hundred thousand in insurance, which would leave three hundred thousand in company assets vulnerable. Regarding liability insurance, better safe than sorry.
The same thought holds true with regards to liability insurance on company property. If someone trips and falls on ice during the winter the company is liable, so having at least a million in insurance, if not more, is essential.
Taking a look at the personnel involved in your business, you can probably spot the key individuals, without whom the company could not function, or at least could not function as well. For these individuals the company may wish to have key man insurance, a life insurance policy that pays off if someone essential to running the business dies, providing functions to replace his expertise.
If the company is a partnership, or an LLC or corporation with key individuals, then having life insurance policies that will buy out the shares of the deceased partner for the remaining partners is a good way to maintain continuity in the business. Then the deceased family members will receive cash settlements, but loose interest in the business, which they may not have expertise in.
There are many types of insurance available, and the needs of every business are different.
Consulting an insurance specialist who works with other businesses will give you an idea of options, and then it is up to you to decide on what is right.