Small Business Profit Maximizer!

Profit First by Mike Michalowicz Is a Must Read!

I have read probably thousands of business books in my 40-year accounting career.  Because of that, it is unusual for any book to be so innovative that I recommend it to all of my business owners.  Profit First by Mike Michalowicz is one of those.

I have purchased and read all of Mr. Michalowicz’s previous books, The Toilet Paper Entrepreneur, The Pumpkin Plan, and Surge, so I had a pretty good idea what his take on business was.  But Profit First surprised me.  Here the author was offering a unique but simple explanation as to why most businesses don’t survive and those that do continue to struggle.  More importantly, he gave a simple solution to the lack of profits.

As a profit coach I must admit that I was skeptical about the idea of taking my profits first and forcing the business to survive on what was left.  I believed it was too simplistic an approach to fixing the problem.  But as I continued to read, I started to “see” the change and the advantage the Profit First method offered to small business owners.

I tested it with a couple of my clients.  Then I started using it in my business.  The change that comes from taking your profit first rather than treating it like an afterthought has helped transform my business and those of my clients.

But that is not all he teaches!

• His four principles simplify accounting and make it easier for the business owner to manage a profitable business just by looking at bank account balances. Finally the business owner will have a simple way to manage their business without waiting for the accountant to finish the books.
• Taking your profit first both enforces frugality and inspires industry-changing innovation. He offers many case studies and tips on how to implement the changes.
• He offers a simple method for cutting overhead costs, one of the easiest to understand that I have seen.

I am recommending this book to all of my clients and strongly believe that every business owner should buy and read this book at least twice!  But more importantly, start implementing the Profit First theories and watch your business grow.

What You Need To Consider With Financial Apps

With smartphones, tablets and even computers there is a range of different options available for financial management apps. Typically apps for financial issues are going to focus in on either personal finance or business, but some provide options for multiple types of entries with different possibilities.

If you are considering adding an app to help you with business or personal financial monitoring, budgeting and tracking, there are a few considerations to keep in mind. By choosing the best app you will have a very practical, handy and relevant way to keep up on financial issues.

Security

While this may seem evident, linking your accounts or linking apps to accounts poses a real security issue. In many cases, especially with apps containing personal and financial information, there is some level of security, but not often what you may expect.

Before you add any financial information or personal information to an app, be sure to check the security. This is particularly true if it is linked to your bank and your credit card or business accounts.

Practical Use

Not all apps are user-friendly, and not all offer the features you may want and need. Before taking all the time to input your information into the app, spend some time reading reviews and determining what other people experienced.

You should look for an app that allows some customization with regard to categories of income and expenditures or budget line items. Some apps also integrate with other types of accounting software, which can save time on double entries and having to manually transfer data.

Keep in mind, you may also have to have more than one app if you wish to manage your business and personal finances on the go. There are also apps for managing investments, stock market accounts and online trading services that can be helpful in keeping your finances up to date at all times.

5 Expenses Most Home Businesses Fail To Claim

If you have a home business or a home office, it can be difficult to know just what you can claim as a business expense and what you can’t. There are some common expenses that self-employed people working from home often miss claiming because they aren’t aware of the option.

To maximize your home business deductions make sure you are claiming the following:

• Books and publications – If you have specific books, trade journals, or trade specific publications you receive on a monthly, quarterly or annual basis, you can deduct the cost of these materials. They do have to be specific to your business and can’t be general publications.
• Professional memberships – Like publications, if you belong to professional organizations, you can deduct your membership fees and dues provided they qualify. This includes union fees as well as any licenses you may be required to hold to do your work.
• Education – If your course is directly related to your present job and will enhance or expand your skills in the same industry, your educational expenses are deductible. This is not true if you are taking something new to add to your business or to offer a different service.
• Uniforms or protective clothing – If your business includes the use of uniforms or specialized type of clothing such as safety clothing, you can deduct the cost of any items purchased. You can also deduct the cost of cleaning for uniforms. You cannot claim cleaning charges if you wear day-to-day clothes, only if it is a specific uniform.
• Business insurance – If you carry any type of business insurance, you can claim the cost of the insurance as a deduction.

If you have any questions about what you can or cannot claim, contact your accountant before you make the purchase or the decision. You should also keep accurate records of all purchases of supplies and materials you need including printer supplies and software purchases for your business. 

 

Tax Tip of the Week: If I barter my products or services do I have taxable income?

The fair market value of property or services received in barter is taxable. But, it may not result in an increase in taxable income based on how what you received is used.

As an example, we trade accounting and tax services with an office supply company. We must include in income the fair market value of the office supplies received. But, we also get to deduct these costs as office supplies expense since they are used in our business.

But, when we trade accounting and tax services for a family photo we still have taxable income but we cannot deduct personal expenses. This results in an increase in taxable income in the amount of fair market value of the family photo.

Like all tax law there is an exception to the general rule. An informal exchange of similar services on a non-business basis is generally non-taxable. An example of this is carpooling.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

The Education of an Entrepreneur

One of the main differences between a business owner who has created for themselves a “job” and an entrepreneur who has created a “business” often can be traced to one thing – the entrepreneur never stops learning!

Most start-up business owners don't know what they don't know. Confusing I know so let me explain. Most new business owners don’t understand taxes, bookkeeping and the law so they hire CPA’s (like myself), lawyer and other professionals to handle these issues for them. But, they don’t even have a clue that they need to learn how to market, manage employees, handle growth, the importance of knowing and understanding the metrics of their business, the importance of systems, etc, etc, etc, ……….

So when a new business owner comes in to see me I try to help by recommending the following three books that I feel that every business owner should own, read and re-read.

First would be The EMyth Revisited by Michael E. Gerber. All wealth is a result of the creation of a system by the business owner. This book goes into the importance of systems in order for the business owner to succeed and grow while still keeping their sanity. I have used the chapter on the importance of an Organization Chart for every business to save a couple of marriages between husband/wife ownership teams.

Second would be Guerrilla Marketing by Jay Conrad Levinson. The theory of guerrilla marketing is that your primary investment is not money (a scarce commodity in most small businesses) but, rather time, energy and imagination.

Finally, any book by Dan Kennedy. I guess I would start with his No B.S. Direct Marketing. He has so many key concepts it is very hard to pick just one. But, if forced to, I choose his statement that every business owner is in the business of getting and keeping customers!

These are my favorite three. Drop me a line and let me know if there is a business book that you think I should have put on the list.

Thank you for your continued support and let's make this year our most profitable year ever!

A Small Business Tax Checklist

As a small business owner or an entrepreneur you should be talking to your accountant at least once or twice a year, and ideally more often, to make sure that you are taking full advantage of any tax deductions or opportunities that you may have.

The Small Business Advantage

Often small businesses have significant tax opportunities that are missed simply because the small business owner didn’t realize the deduction or tax credit was even possible.

Some of the most commonly missed money-saving ideas that accountants can help small businesses with include:

• Capital expenses and equipment – there is an annual allowance under the Section 179 deduction that business can take for specific types of equipment and supplies but the total allowable is based on several different factors.
• Fully fund retirement plans – often small business owners forget that by funding their own retirement plan, or getting one started, that you can use to off-set your income for the tax year.
• Hiring – you may be surprised that there are programs that you can take advantage of if you hire a disabled person or a veteran. This is a great opportunity to help out a person that has served the country while also earning a tax credit with each eligible employee.
• Get your equipment repaired – if you have eligible property such as vehicles or an office or building, you may be able to spread out the deduction for the repair over a period of time. In some cases and for some businesses the repair, especially if it improves energy efficiency, may also be a credit.
• Charitable donations – a business can also make charitable donations to recognized charities. These can be made any time of the year but if you have additional income in December it can be a good way to use the deductions in this year rather than waiting until the next year.

Talking to your accountant well before the end of the year is always a good strategy. You can learn about your options and then make the best choices to help to lower your taxable income while maximizing your ability to take advantage of services and purchases that you may need.

Performing a Basic Accounting Audit

If you’ve been thrust into the role of accountant in your business and have been assigned the unpleasant task of performing an audit, there’s no need for stress. Performing a basic accounting audit isn’t as scary as one may seem.

Once you’ve determined the area that needs to be audited, you’ll need to follow the organization’s standard auditing procedures, especially those that pertain to the division or department being audited. In the beginning of this phase, you want to also analyze any risks that could come up during the audit and make sure you have all the necessary resources you’ll need to complete the audit: staff, reports, financial information, laptops, overhead projectors, etc.

Now it’s time to begin the audit – this Is where the “fun” begins. You’ll begin analyzing flow charts and accounting systems among other items in order to discover and correct any weaknesses in the accounting process.

Analyze transactions and records for accuracy and notate all of the information you gather in order to be able to make changes and recommendations to policies and procedures that need them.

The purpose of the audit is to identify weaknesses in the accounting systems and processes the company has in place, as well as any questionable transactions or activities. It’s important to be thorough, gather evidence and then produce an audit report that can be presented to upper management and department heads for review, examination and analysis.

Once your report has been prepared and distributed to all parties involved, schedule and hold an after-audit meeting. The meeting should include the key members of your audit team as well as key members of management and department heads.

The meeting should discuss findings from the audit including strengths and weaknesses as well as recommendations for improvement.

Don’t let billing errors spiral out of control

Dealing with a billing error can be frustrating. But giving up too quickly will only cost you money. If you’ve got an erroneous bills to settle, here’s what to do:

• Write a polite letter. Control your irritation if you want results. Describe the problem and ask for help. Customer service personnel will be more willing to work with you if you don’t attack them.

• Follow the chain of command. Addressing a letter to the CEO of a bank, for example, may only delay a resolution. Start at the bottom, and work your way up until the problem is resolved.

• Write within 60 days of receiving the erroneous bill. The Fair Credit Billing Act will protect you only if you follow its limits. That means writing to the company within 60 days after the bill was sent to you.

• Give full information. Include your name, address, account number, a brief description of the problem, and copies of the sales slips and other documents that support your claim. Try to keep the letter to a single page.

• CC a regulator. If you show that you’re sending a copy of the letter and documents to the Comptroller of the Currency or the Federal Trade Commission, you signal that you mean business.

• Confirm delivery. Send the letter by certified mail with return receipt.

Lessons Business Owners Keep Learning the Hard Way!

For 35+ years I have worked with small business owners and watched them. This has allowed me to learn many things that worked and a whole bunch of things that don’t. This is my 20^th year running my own CPA firm and I have to confess I have repeated many of the mistakes I watched others make. Heck, since I tend to be creative, I even made a few new ones of my own.

This is the first in a new series sharing some of these lessons with you. I will start with the “myth” that most startup business owners believe and follow that with the “hidden truth” that successful business owners learn the hard way. Finally, I will finish with a business lesson to be learned.

So, let’s start ………………

Budgets – The secret to survival!

The myth most business owners believe: If you know your business, budgets are only needed by the bank when you are applying for a loan.

The truth successful business owners learn the hard way: Running a successful business requires attention to a huge amount of moving parts that seldom fall together correctly. Even the smallest business will run into cash flow problems because of the business cycle. Large growing companies are almost guaranteed to run into cashflow problems at one time or another.

In the past three years, I have met with many small construction companies who learned the “business cycle” the hard way when they won a contract at Ft. Bliss. Once they started the contract, they quickly learned that they had to pay upfront for materials and labor and that it often took 45-90 days to get paid. A quick budget would have helped them see this problem ahead of time.

What they didn’t understand is that budgets are critical to every business owner’s success! Operating without a budget is like starting off on a journey without any idea how to get to where you are going. Sounds like fun but often ends up as a disaster. A budget helps you plan to be a success rather than hoping for success.

When you budget (and I mean real-life budgeting – not Government pretend budgeting!) you actually sit down and figure out:

1. what you are going to do in order to get the sales you need to be a success,
2. what costs are absolutely necessary to deliver your product efficiently,
3. what staffing that is needed to attain this budgeted income,
4. what financing might you need during slow times.

Finally, a budget helps you stay on track. Successful business owner’s review every month what actually happened against their budget and then make the necessary adjustments needed to reach their goals. You would be amazed how many business owners only discover that they made a profit when I do the tax return after the year end. By then it is way too late to adjust for changing business circumstances.

Lesson learned: Budgeting is a waste of time only if you don’t plan on making money!

Tax Tip - The Deadline is Near

 

As the tax deadline nears...our final set of reminders for your 2016 return.

Returns are due by Tuesday, April 18 this year. Even though Because April 15 falls on a Saturday, on Easter weekend, Washington, D.C. will observe its Emancipation Day holiday that day.

You have two options to get a six-month extension if you need more time:

• File Form 4868 with IRS by the due date of your tax return, adding a check for any additional tax you expect to owe. But be careful not to lowball your estimate: If it is unreasonably low, IRS can void the extension. You can also e-file the 4868.
• Or, for a fee, charge an extension-related tax payment on your credit card through an IRS-approved processor. In both cases, the new due date is Oct. 17.

If you can’t pay with your extension or when filing your return, file anyway.

Doing so avoids the 5%-a-month penalty for failing to file. This penalty is capped at 25% of the unpaid balance. The failure-to-pay penalty is far less...½% a month.

You can arrange for installment payments by filing Form 9465. The fee is $105 ($52 if you agree to wire payments). Low incomers will be charged $43. Of course, you still will have to pay interest plus the penalty for late payment.

Your IRA contribution for 2016 is due April 18, even if a filing extension has been requested. Payins by mail are OK if they are postmarked before April 19.

5 Reasons Why Recordkeeping Is So Important

When you decided to start your business, was your first priority concerned with setting up your filing system for recording your expenses? I seriously doubt it. This simple task (yes it is simple) is usually the item that is the last thing on the new business owner’s mind. The more “important” issues of what product to sell, how am I going to advertise, how much money is it going to cost me, and how much money can I make are the first questions we consider when going into business. 

The task of recordkeeping is usually procrastinated until the very last minute, when it is required. It is time to file your tax return, or time to go to the bank to get a loan for the business and the banker wants to see some financial records for the business. This can be a very daunting and cumbersome task if you have to dig through receipts and expenses for the whole year! No wonder we hate keeping records. That’s no fun! 

Well, guess what? If you aren’t keeping good, timely, and up-to-date records monthly, you don’t need to be in business. That’s right. I said it. Here are the top five reasons why I truly believe this statement. 

1. Lost tax deductions = Lost Money If you are throwing your receipts in a shoebox each month and not keeping an organized record of your income and expenses, I can bet you money that you are losing out on some major tax deductions. A smart businessperson keeps track of her income (cash in) and expenses (cash out) monthly, sometimes even weekly. You do not need a fancy accounting software package to do this. You don’t even need a computer! Simply keep a journal monthly and log in all of your receipts and invoices, and there you have it. 

2. High CPA/Tax Preparer Fees = Lost Money I can speak from personal experience, that if you bring in that shoebox of receipts for the year and expect your tax preparer to record and properly deduct your business expenses on your tax return, you are sadly mistaken. Tax season is the busiest time of year for these professionals. If you expect them to do your bookkeeping and recordkeeping as well, expect to pay for it. They don’t have the time, or the desire to make sure that every receipt is accounted for. As a businessperson, it is your responsibility to make sure they are given the right totals and you can trace it right back to your tax return. 

3. Too much time spent looking for receipts The time you spend looking for a past receipt for a particular purchase for whatever reason, you can be utilizing this time in advertising your business or producing your product. These are important money generating activities that you are sacrificing due to your lack of recordkeeping. 

4. No financial statements Every business owner should review at least the profit and loss statement (income statement) for their business MONTHLY. This important piece of paper tells you if you are making money or losing money. How can you possibly run your business and make a profit if you are not analyzing your sales and expenses continuously? A good recordkeeping system will allow you to have this information at your fingertips. 

5. No need for expensive accounting software If you are just starting your business, or are a small business owner, you more than likely do not need software to prepare your books. A simple journal that is kept monthly of your income and expenses is all you need. At a glance, you will know how your business performed for that particular month. 

As a business owner, you need to realize the importance of a good recordkeeping system. This should also be a task that the business owner performs for at least three to six months before delegating the job to someone else. You will be able to run your business more effectively, determine possible cycles in the business year, and know where your money is going. Your business will be much more successful if you keep a simple recordkeeping system.

18 Commonly Overlooked Tax Deductions!

Every year millions of taxpayers overpay their income taxes because they failed to take a deduction they were legally allowed to claim.  The biggest reasons for missed deductions are not knowing what deductions are available, and having a tax preparer who fails to properly determine eligibility.  Here are some of the most overlooked deductions.

1. State sales taxes. This is of particular importance in states with no income tax, such as Texas and Florida.
2. Reinvested dividends. This is not really a deduction, but since these dividends were previously taxed and then reinvested, the taxpayer can add these dividends to the cost of their stock when they sell to reduce the taxable gain.
3. Expenses related to charitable work. If you volunteer at your church or a charity, you may deduct expenses and mileage related to it.  As an example, if you bring food for a church dinner, you can deduct the cost of the food you buy and the mileage related to buying and delivering the food.  Keep your receipts and a mileage log.
4. Student loan interest paid by mom and dad. Normally you cannot deduct expenses that you don’t pay yourself.  But if the parents pay a student loan, the IRS treats it as if the parents made a gift to the child and then the child paid the loan.  So a child who is not being claimed as the parents’ dependent can deduct up to $2,500 of student loan interest on their own return.
5. Job hunting costs. If you are looking for a new position in the same line of work, keep track of your expenses.  If you itemize, you can deduct the amount over 2 percent of your income.  Unfortunately, job hunting costs for your first job out of college are not deductible.
6. Moving expenses for your first job. To qualify, your first job must be more than 50 miles away from your old home.  You get to deduct the cost of moving yourself and your household goods to the new location.  If you drive, don’t forget to deduct your mileage.  You get this deduction whether you itemize or not.
7. Military reservists’ travel expenses. To qualify, you must be more than 100 miles away for drills and meetings.  You get this deduction whether you itemize or not.
8. Reduce self-employment taxes with the health insurance deduction. If you use a tax program or a tax preparer, this is an automatic deduction.  But I have seen handwritten, self-prepared returns where this is missed.
9. Child care credit paid by a reimbursement account at work. A credit is worth much more than a deduction because it reduces your taxes dollar for dollar.  A deduction only reduces your amount of taxable income.  A $100 credit will save you $100 in tax.  A $100 deduction will only save you $25 if you are in the 25 percent tax bracket. If you pay your child care bills through a reimbursement account at work, it’s easy to overlook the child care credit in excess of the $5,000 maximum allowed by these tax-favored accounts.  Up to $6,000 in child care expenses (for two or more children) qualifies for the credit.  If you run the $5,000 maximum through your work account but pay $6,000 or more in actual child care costs, you can claim the credit on the additional $1,000 expenses.  That would cut your tax bill by at least $200.
10. State taxes paid with your previous year’s return. If you paid a tax bill last year, deduct this amount as an itemized deduction this year. 
11. Points paid when you purchase a home. Don’t forget to deduct the points paid when you purchase a home.  These are often missed because they are called loan origination fees, loan discounts, or discount points rather than points on the closing statement. 
12. Home improvement loan points. Points paid on a loan to improve your principal residence are fully deductible in the year paid. 
13. Seller-paid points. Points paid by the seller are treated as paid directly by the buyer from funds that have not been borrowed.  In English, you must have made a down payment more than the amount of the points in order to deduct them. 
14. Refinanced points. Points paid to refinance your home are not deducted in the year of the refinance.  Instead, they are amortized over the life of the loan.  Taxpayers commonly forget to write off any remaining amount when they sell the home or refinance it again. 
15. Section 179 deduction or bonus depreciation on business equipment. Equipment normally must be depreciated over the useful life of the equipment as set out by IRS schedules, but most businesses can deduct 100 percent in the first year using Section 179.  Depreciation is a complicated subject you should discuss with your tax preparer if you buy business equipment. 
16. Travel and auto expenses related to medical care for you, your spouse, and your dependents. You can use actual expenses or use the standard mileage rate provided by the IRS (19 cents in 2016). 
17. Sales taxes paid on large purchases. If you itemize, you can add sales taxes paid for large purchases (such as cars, boats, motor homes, or home improvement materials) to the amount of sales tax you can deduct based on the IRS table for a bigger deduction. 
18. Work-related education costs. To be deductible, courses must be specifically required by your employer, by law, by government regulations, or to maintain or improve skills required to perform your present job.

Common Accounting Mistakes Small Businesses Make

If you go by the SBA (Small Business Association) definition of a small business being under 500 employees there are 28 million businesses in this category. However, if you look at businesses that just employ one person, a sole owner/employee combination, then you have a total of 22 million, leaving just 6 million businesses having more than one and less than five hundred employees.

With all these self-employed businesses it isn’t surprising that accounting mistakes are a big problem. The following are the most common errors that small businesses make with their accounting that can result in serious risk of not earning the profits you need to stay open past that critical first year.

• Poor expense records – most small businesses fail to take advantage of all the opportunities they have to write off small business expenses. Having a single credit card and using that for all business transactions can help, but you also make it a point to keep and itemize actual receipts to ensure you are not missing out.
• Failing to talk to an accountant – by talking to your accountant on a regular basis you can make sure that you are maximizing your tax deductions and taking advantages of tax incentives and programs that you may be eligible for.
• Doing your own taxes – many self-employed business owners assume that they can do their own business taxes just like they do their own personal taxes. The reality is if you are doing either you are probably not taking full advantage of tax deductions or failing to understand how to reduce your taxes for the upcoming year.
• Not collecting outstanding invoices – many small businesses are very lax at following up with customers and ensuring that they are paid on time and in full. If you don’t keep track of this on a weekly basis you will have much more difficulty in getting all your numbers together for tax season.
• Not investing in yourself – all small business owners should be using retirement savings accounts and tax breaks on these funds to not only help reduce their taxes but also to provide them with the funds they need for later in life.

To avoid any of these issues start working with an accountant. You can meet with him or her a few times and year and ensure you are on track for meeting your financial business goals and taking full advantage of tax incentives.

A Small Business Tax Checklist For The End Of The Year

As a small business owner or an entrepreneur you should be talking to your accountant at least once or twice a year, and ideally more often, to make sure that you are taking full advantage of any tax deductions or opportunities that you may have.

The Small Business Advantage

Often small businesses have significant tax opportunities that are missed simply because the small business owner didn’t realize the deduction or tax credit was even possible.

Some of the most commonly missed money-saving ideas that accountants can help small businesses with include:

• Capital expenses and equipment – there is an annual allowance under the Section 179 deduction that business can take for specific types of equipment and supplies but the total allowable is based on several different factors.
• Fully fund retirement plans – often small business owners forget that by funding their own retirement plan, or getting one started, that you can use to off-set your income for the tax year.
• Hiring – you may be surprised that there are programs that you can take advantage of if you hire a disabled person or a veteran. This is a great opportunity to help out a person that has served the country while also earning a tax credit with each eligible employee.
• Get your equipment repaired – if you have eligible property such as vehicles or an office or building, you may be able to spread out the deduction for the repair over a period of time. In some cases and for some businesses the repair, especially if it improves energy efficiency, may also be a credit.
• Charitable donations – a business can also make charitable donations to recognized charities. These can be made any time of the year but if you have additional income in December it can be a good way to use the deductions in this year rather than waiting until the next year.

Talking to your accountant well before the end of the year is always a good strategy. You can learn about your options and then make the best choices to help to lower your taxable income while maximizing your ability to take advantage of services and purchases that you may need.

Ten Steps to Becoming a Marketing and Sales Expert

What I didn’t understand when I started my CPA firm is that every business is a marketing business!  A business without customers is called a hobby.  This leads to the major problem that most new business owners discover:  They may be good at what they do, but they must become experts at marketing and selling if they want to have a successful business.

I think Bill Glazer (the author of Outrageous Advertising That’s Outrageously Successful) explained best when he said,

“I have a two thing business—Getting new customers and keeping them as long as possible.”

The question I usually get is, “How do I become a sales and marketing expert?”  The following are the steps I have used over the last 20+ years to teach myself.

1. Change your mindset about sales and marketing.  Too many business owners, especially professionals (doctors, lawyers, CPAs, architects, etc.) view salespeople with disdain.  You must eliminate that attitude now!  If you really believe that your product or service will transform your customer/client/patient’s life, then you have a moral obligation to provide it to as many people as possible.  This can only be done by selling it.
2. Educate yourself.  Read as many books as you can about sales and marketing.  I would start with the following books:
   • Guerrilla Marketing by Jay Conrad Levinson
   • Sales Bible by Jeffrey Gitomer
   • Duct Tape Marketing by John Janstch
   • All of the No B.S. series by Dan Kennedy.  I would start with No B.S. Direct Marketing
   • Outrageous Advertising That’s Outrageously Successful by Bill Glazer
   • SNAP Selling and Selling to Big Companies by Jill Konrath
   • Ultimate Sales Machine by Chet Holmes
   • LinkedIn Marketing an Hour a Day by Viveka van Rosen
   • Stick Like Glue by Jim Palmer
3. Take some marketing courses.  Check out sales online training with Jeffrey Gitomer (www.salesblog.com) and Steve Clark (www.newschoolselling.com).
4. Find and hire a sales and marketing coach.  Being an entrepreneur in charge of marketing and sales is a lonely job.  Having a coach gives you an outsider’s perspective, an experienced voice, and a deadline for getting stuff done.  Don’t underestimate the value of a deadline.  Without one, the everyday demands of your business and the natural inclination to procrastinate when faced with something you’re not good at will delay (sometimes forever) your work on sales and marketing.  One of the key things a coach does is get you on schedule.
5. Subscribe to sales and marketing magazines and blogs.  And read them constantly!  You must think about sales and marketing your business 24 hours a day.  Heck, you should dream about it!  Don’t forget to check out our magazine every month.  We cover marketing and sales every month and provide you with homework to help you improve.
6. Create a marketing plan.  A good resource for preparing a marketing plan is Guerilla Marketing in 30 Days by Jay Conrad Levinson.
7. Create a 12-month implementation plan of your marketing plan.  The motto of this magazine and my coaching programs is Good Ideas + Action = Massive Profits.  You have to do the work.  Having a marketing plan and sticking it in your desk drawer won’t accomplish anything.
8. Choose sales tools that fit your budget.  Once you do, commit to sticking with them for at least six months.  It takes time for marketing to work.  Don’t make the mistake of giving up after only a couple of tries.
9. Make a monthly appointment with yourself to review your marketing.  Every marketing plan needs to be adjusted based on how your prospects and customers react to it.  It is a good idea to A/B test every part of your sales and marketing process.  Remember, results are all that matter!  Keep experimenting and improving until you get the marketing message and sales methods that deliver sales.
10. Set aside time to sell weekly.  This is particularly important for professionals and technical businesses (mechanics, contractors, etc.) that put more importance on getting the work done correctly than they do on sales and marketing.  It is extremely easy to get lost in doing the work that needs to be completed now, but doing so usually results in not having any work lined up once the current job is completed.  It is important to always be selling so that the work pipeline is always full.

Remember, every business is a sales business first!  That means that every business owner must become an expert marketing and sales professional in order to be successful.

 

5 Expenses Most Home Businesses Fail To Claim

If you have a home business or a home office, it can be difficult to know just what you can claim as a business expense and what you can’t. There are some common expenses that self-employed people working from home often miss claiming because they aren’t aware of the option.

To maximize your home business deductions make sure you are claiming the following:

• Books and publications – If you have specific books, trade journals, or trade specific publications you receive on a monthly, quarterly or annual basis, you can deduct the cost of these materials. They do have to be specific to your business and can’t be general publications.
• Professional memberships – Like publications, if you belong to professional organizations, you can deduct your membership fees and dues provided they qualify. This includes union fees as well as any licenses you may be required to hold to do your work.
• Education – If your course is directly related to your present job and will enhance or expand your skills in the same industry, your educational expenses are deductible. This is not true if you are taking something new to add to your business or to offer a different service.
• Uniforms or protective clothing – If your business includes the use of uniforms or specialized type of clothing such as safety clothing, you can deduct the cost of any items purchased. You can also deduct the cost of cleaning for uniforms. You cannot claim cleaning charges if you wear day-to-day clothes, only if it is a specific uniform.
• Business insurance – If you carry any type of business insurance, you can claim the cost of the insurance as a deduction.

If you have any questions about what you can or cannot claim, contact your accountant before you make the purchase or the decision. You should also keep accurate records of all purchases of supplies and materials you need including printer supplies and software purchases for your business. 

 

Forming A Partnership With Your Accountant

Forming a working relationship with your accountant, either as a business owner or as an individual who wants to take control of your financial future, is perhaps one of the most important partnerships you can build.

Unfortunately, a lot of people fail to do this and only spend a few minutes talking with their accountant at tax season. If this is the only time you talk to your accountant, here are just a few of the many important aspects of your finances you may be missing out on:

• Planning for your retirement with the most comprehensive approach to short and long investment strategies with risk levels you are comfortable with.
• Determining options for creating tax savings for years to come. This could include strategic use of allowable gifts, donations to charities or even the option to develop different types of trusts and funds.
• Providing a complete financial overview of your personal finances or helping to develop a financial analysis of your comprehensive business plan.
• Helping you with important information on what to consider, what to track and record, and how to make the most out of tax credits and deductions you may be eligible for throughout the year.
• Helping you to develop an effective and accurate budget to allow you to save, pay for a home, buy vehicles or even to plan for kids to go to college.
• Assist you in making any large investments, sales of financial decisions to ensure all aspects of the transaction are in your best interests. This is true for both a business acquisition or sale or for major financial issues in your personal life as well.

In addition, an accountant is a great person to consult when you are thinking about starting a business, growing an existing business or perhaps in buying a new home or making a large purchase. Having a professional to go to for specific information, and a big picture look at all options, is a great asset for anyone to consider.

Performing a Basic Accounting Audit

If you’ve been thrust into the role of accountant in your business and have been assigned the unpleasant task of performing an audit, there’s no need for stress. Performing a basic accounting audit isn’t as scary as one may seem. 

Once you’ve determined the area that needs to be audited, you’ll need to follow the organization’s standard auditing procedures, especially those that pertain to the division or department being audited. In the beginning of this phase, you want to also analyze any risks that could come up during the audit and make sure you have all the necessary resources you’ll need to complete the audit: staff, reports, financial information, laptops, overhead projectors, etc. 

Now it’s time to begin the audit – this Is where the “fun” begins. You’ll begin analyzing flow charts and accounting systems among other items in order to discover and correct any weaknesses in the accounting process. 

Analyze transactions and records for accuracy and notate all of the information you gather in order to be able to make changes and recommendations to policies and procedures that need them. 

The purpose of the audit is to identify weaknesses in the accounting systems and processes the company has in place, as well as any questionable transactions or activities. It’s important to be thorough, gather evidence and then produce an audit report that can be presented to upper management and department heads for review, examination and analysis. 

Once your report has been prepared and distributed to all parties involved, schedule and hold an after-audit meeting. The meeting should include the key members of your audit team as well as key members of management and department heads. 

The meeting should discuss findings from the audit including strengths and weaknesses as well as recommendations for improvement.

Invoice Factoring - How to Finance your Company Without Debt

There are few bigger challenges for business owners and managers than waiting 30 to 60 days to get paid by their customers.  Although large businesses can usually afford it, smaller businesses can’t afford the wait. As a matter of fact, waiting to get paid on their invoices can create cash flow problems that affect the owner’s ability to meet payroll or pay the company’s bills. This problem can be more frustrating if the business has a number of orders that it cannot fulfill because its cash is tied up in unpaid invoices. 

How can invoice factoring help you? 

Invoice factoring, also known as accounts receivable factoring, is a financial tool that allows small business owners to capitalize on the power of their slow paying invoices. It allows you to turn your invoices into immediate cash, enabling you to fund your business operations. Although it is not a well-known fact, invoices from strong credit worthy commercial clients are excellent collateral, especially for factoring companies. Although most banks won’t take invoices – factoring companies are more than willing to provide you with financing based on them. This makes it an ideal financing vehicle for small and mid size businesses, as well as knowledge-based companies and employee intensive firms. 

How does invoice factoring work? 

As opposed to most banks that lend you money against hard collateral, invoice factoring companies buy your invoices outright. The factoring company buys your invoices and provides you with funds immediately, while they wait to get paid by your customers. Factoring is best described with an example: 

1. Let’s say that you sell services to Company A and Company B. As soon as you provide the services, you invoice them. 

2. At the same time, you send copies of the invoices to the factoring company, who buys them and provides you with an advance payment for them. 

3. The factoring company waits to get paid by your customers. Once paid, any remaining funds are remitted to your company. 

The invoice factoring process can be repeated every time you invoice, providing you with a flexible line of financing that grows with your business. 

How much will an invoice factor advance my business? 

Factoring transactions are commonly done as a two-installment sale. The first installment is called the advance and is paid to you as soon as you submit the invoices. Advances can range anywhere from 60% on the low end up to 90% of the gross value of the invoices. The average advance is about 75%. 

The remaining installment, called the rebate, is remitted to you once the invoice is paid. Factoring fees are deducted from the rebate. 

The cost of invoice factoring 

The cost of a factoring transaction is determined by three criteria. First, the credit worthiness of your customers. Second, the length of time that your invoices take to get paid. Lastly, the monthly factored volume. 

Your cost, actually called a discount, can be as low as 1.5% or as high as 12% per transaction depending on how you fit the previous criteria.

 How can I determine if invoice factoring will help me? 

Generally speaking, invoice factoring will help you if you have a business that has reasonable profit margins or is growing quickly. Mid size companies with 20% or more profit margins or large companies with 15% profit margins can usually do well with accounts receivable factoring. 

Don’t let billing errors spiral out of control

Dealing with a billing error can be frustrating. But giving up too quickly will only cost you money. If you’ve got an erroneous bills to settle, here’s what to do: 

• Write a polite letter. Control your irritation if you want results. Describe the problem and ask for help. Customer service personnel will be more willing to work with you if you don’t attack them. 

• Follow the chain of command. Addressing a letter to the CEO of a bank, for example, may only delay a resolution. Start at the bottom, and work your way up until the problem is resolved. 

• Write within 60 days of receiving the erroneous bill. The Fair Credit Billing Act will protect you only if you follow its limits. That means writing to the company within 60 days after the bill was sent to you. 

• Give full information. Include your name, address, account number, a brief description of the problem, and copies of the sales slips and other documents that support your claim. Try to keep the letter to a single page.

 CC a regulator. If you show that you’re sending a copy of the letter and documents to the Comptroller of the Currency or the Federal Trade Commission, you signal that you mean business. 

• Confirm delivery. Send the letter by certified mail with return receipt.