Small Business Profit Maximizer!

How to Get a Corona virus Emergency Small Business Loan AND Get it Forgiven

In this video I discuss how to start the process to get an SBA guaranteed loan and what you need to do to have it forgiven. Also have the help offered by the City of El Paso.

Here is the link to the SBA site to start the loan process and to get the $10K emergency loan advance.
https://covid19relief.sba.gov/#/

Here is the link to apply for the El Paso Emergency small business zero interest rate loans up to $25K and $5K grants.
www.liftfund.com

 

 

Teaching Kids About Money

Kids are naturally very interested in money and financial transactions as they apply to getting things they want. This is a terrific teachable moment, and activities and games to do with money are interesting for younger kids with even with just basic math skills.

To get kids interested in money and aware of the importance of budgeting and planning, parents can:

• Play board games such as Life, Monopoly and even The Farming Game that are easy for older children or even younger kids with help. For older kids and teens, Daytrader, a board game about the stock market, is a great option.
• Have an allowance that the child or children are responsible for choosing to use or spend. If you aren’t comfortable with paying a child to do activities around the home, make the allowance based on extra activities and not on what you consider the basics.
• Start a bank account. Take your child to the bank and let him or her open an account in their own name. Most banks have an incentive program for kids, and it’s a great way to learn about earning interest and saving.
• Model budgeting. Instead of just going to the store and paying with credit or debit card, bring cash and talk to children about how you make choices to stay within the budget. Having the money in hand is more concrete for children.
• Set goals as a family. This could be for a family vacation or something special for the entire household, such as new computers or televisions. When kids see Mom and Dad saving, they are more likely to see the benefit in this as they get older.

It is important to keep everything age appropriate for the child. The more comfort children have with budgeting and planning when it comes to finances the easier it will be for them when they get older.

Helpful Ideas For Your Income Tax Return

Every year a large percentage of people get tax returns. Some get a lot and some just get a little, but what you choose to do with your return may have a big impact over time. Different individuals have different plans for the return, including going on a shopping spree or buying something luxurious or even necessary for themselves or their family.

There are a few things to consider that will add to the value of your tax return. First, and perhaps most important, is to consider adjusting your tax withholding through your employer. You can add to your retirement or make an investment which will provide you with interest on the money throughout the year, something the IRS doesn’t provide.

In addition, you can use your tax money wisely by:

• Use all or part of your refund to pay off the balance on high-interest rate credit cards, and then avoid using the cards because they now have spending ability. You will literally be saving yourself the interest rate on the card times the balance and the time you would need to pay it off.
• Make a tax-deferred IRA contribution if you are not already contributing. This can be as much as $5,500 per person or $6,500 if you are over 50.
• Carefully review your insurance coverage based on your age and possible risk factors. You may also want to make any repairs on your home which may negatively impact your insurance coverage if you have to make a claim.
• Pre-pay for special events such as weddings, vacations or set aside cash for travel. This avoids having to carry a balance on your credit card, saving that interest amount.
• Make a charitable contribution which will be tax deductible if you are itemizing your expenses. You can also gift money to a family member for tax savings, just talk to your accountant.

You can also choose to start an investment or add to your current portfolio. Just be sure to understand which options actually end up saving you in taxes for your next tax year.

Why Money and New Year's Resolutions Don't Always Mix

Most New Year’s Resolutions fail by the time February and March approach, if not sooner. If you were to ask all of your friends about their New Year's Resolutions, you would probably find that three seem to occur more often than anything else. You may have already guessed what they are, but in case you are wondering, they are most likely centered around losing weight, getting fit, and saving money.

Just like the weight loss and the fitness, people start out in January with the real desire to change their spending habits and to try to put away a set amount of money each month. However, as we also know, for many people, January, February and even March can be months spent trying to pay down holiday purchases on credit cards.

The reasons that New Year's Resolutions often fail when it comes to savings can be broken down for several simple reasons. By recognizing where you are struggling, you can plan to compensate for this and find yourself with money in the bank.

• Bill backlog – With all the credit card bills from the holidays, savings can be "temporarily" put on hold. Unfortunately, this often sets a pattern of simply putting savings off to next month or buying again once credit card balances drop.
• No budget plan – One of the most difficult things about savings is if you aren't conscious of where you are spending your money. By having a budget and tracking your spending, you will be more effective in sticking to it.
• Using debit – People spend more when they use debit cards than if they pay cash. If you aren't comfortable carrying cash, limit the funds in the account linked to your debit card to your monthly or weekly allotment to prevent overspending.
• Save first – Before buying that extra venti latte in the morning, put your savings for the day, week or month, in your bank account. Avoid linking this account to your debit or credit account.
• Be reasonable – If you can only save a hundred dollars a month, don't set yourself up for failure by trying to save five hundred. Be reasonable with savings and, with success, increase your goals.

Finally, it is important to have accountability. Keep a record of what you are depositing into the savings account and continue to stick to your savings plan. Avoid temptations to dip into the account except in the case of some type of true emergency situation.

Tax Breaks for New and Returning College Students

While going back to school is an investment in your future or the future of your children, it isn't always an easy option when it comes to your finances. The good news is that there are some tax breaks that students attending college or university can claim.

These tax breaks will help reduce a bit of the bite of trying to get an education and also limit their need to pay additional taxes. Parents will be able to claim the tax credits for each of their children that are enrolled and attending. These credits and deductions include:

• American Opportunity Credit – This is a tax credit that is available for undergraduates for up to four years of college. Each year, students can claim this credit of up to $2,500. To make this even better, up to $1,000 of the credit is refundable, allowing some students to potentially have a refund even if they do not currently owe anything in taxes. To receive the maximum amount, you have to make under $80,000 for single filers or $160,000 if filing jointly.
• Limited Lifetime Credit – This can be claimed for an unlimited number of years and can apply to all types of degree programs, including graduate and undergraduate. It can also be applied to vocational or professional courses that qualify. This is not refundable, but up to $2,000 can be used to offset any taxes you may owe for that year.
• Tuition and Fees – These can be claimed as a deduction only if the student doesn't meet the criteria for the two credits listed above. This deduction can be up to $4,000 as an adjustment to income. For those that are filing as singles, the $80,000 income limit applies as does the $160,000 if married filing jointly. This deduction is not available if you are married filing separately, but parents can use the deduction if they pay the tuition and fees.
• Loan Interest Deduction – This is for student loans only and is applied as an adjustment to income of up to $2,500.

It is important to talk to your accountant to find out which option is best for your tax situation.

Simple Money Saving Mistakes that May Derail Your Efforts for 2018

If you are like most people, you have a lot of very good and very well-intended ideas about maximizing your savings and building up an emergency fund for 2018. However, you may also find that at the end of the month there never seems to be any extra money to add to the account.

The reasons this happens will vary from individual to individual and situation to situation. With that being said, there are a few common mistakes that people make to undermine their efforts at building their savings.

• Not prioritizing savings – The best way to ensure you make your monthly deposit to your savings account is to take it off the top rather than at the end of the month. If you have automatic deposit, set up an automatic recurring draft from your checking account to a savings account on the day of the direct deposit.
• No budget – The biggest factor for saving is having a budget. This means allocating, based on a realistic amount, how much you need to have every month for your needs (bills, loans, payments, etc.) and also for your wants (entertainment, dinners out, etc.). Once you know these amounts, you can set a realistic savings goal.
• Rationalizing – Many people are very good at rationalizing why a "want" suddenly turns into a "need" even if they have a budget. It is important to be able to tell yourself “no” or to wait until you can budget for the item.
• Buying on sale on credit – If you are buying items on sale to save money and then putting the purchase on a credit card that you will take months to pay off, you are not really saving. There is nothing wrong with buying necessary items on sale, but you should only make the purchase if you can also pay the card off and not carry that high interest forward for months.
• Not using programs – If your employer offers a retirement savings program in the form of matching funds, it is worth using this option rather than doing it on your own. While it will lock up the funds, it may also double your savings, something you will not achieve with any type of saving accounts anywhere else.

Take the time to consider your options. A simple and easy to follow budget and savings plan is still the most effective option to build your savings account.

Easy Ways to Cut Down on Christmas Spending

The holiday season is the time when most families spend the most money. The other time of the year that is a big expense is summer vacation, but most families have more trouble budgeting for Christmas and New Year’s than in the summer.

To help you save money over last year without cutting into your enjoyment of the season, here are some easy ways to start saving money and to avoid those last minute "splurge" issues that can add hundreds of dollars to holiday spending.

• Shop online – If you are shopping early for Christmas, you can find terrific online deals, starting in mid-November. Shopping online also allows you to have the gift wrapped and delivered right to the recipient, saving you on those costs as well. For impulse buyers, staying out of retail outlets is a cost-saving factor as well.
• Use cashback cards – Saving up to five percent per purchase makes sense, so using these credit or debit cards within your budgeted amount is always a good idea. Remember to only use credit cards if you have the cash on hand to pay the bill in total to avoid interest.
• Host one major event – Instead of a number of smaller dinners, parties, and gatherings, have one major event that allows you to set a budget and stick to it. You can even make it a potluck or a themed meal that will help to spread out the cost while allowing everyone to contribute.
• Use coupons – Even if you don't use coupons throughout the year, this is a great time to get started. Grocery stores and other types of retail outlets will have coupons, online specials, or specials through their apps that can really help to save money. If you don't want to keep using the apps, just delete them after the holidays.

Talking to family and friends about limits on gifts is also a great option. Most people are uncomfortable about bringing up the topic, but they appreciate the ability to have the discussion once it is raised.

Is it Smart to Downsize for Retirement?

Retirement is upon you or coming up pretty fast and one of the things your accountant might have told you is that now is the time for you to downsize. While moving into a smaller house might seem to make sense now that the kids are all grown and gone, but like any financial decision you make, you should crunch the numbers first. Don’t just assume that downsizing is what you should do. 

When you are doing your calculations don’t forget to include the many fees you can incur when you buy and sell a house. Then there is the cost of moving, cost of changing utilities, address change costs, reprinting of checks, the cost of changing ID, and the list goes on. While some of these might seem like incidentals when you add them all up you might be surprised at what you discover. There’s also the costs of preparing a home for sale and then the remodeling you are likely to do to make your new home perfect for you. Even things like painting can translate into noticeable drops in your pocketbook. 

There are also other things to consider other than financing. Have you built relationships in your existing neighborhood? Are you close to amenities that you use? If you use bus services will the new location accommodate you? These things are especially worthy of consideration if you have lived in a neighborhood for a long time and you have ties to that neighborhood. 

If you are to consider strata type housing you need to consider the monthly costs of strata fees and how those will increase over time, which could land up having a negative effect on your pocketbook. 

As you can see there are many things that you need to consider when you are thinking about downsizing after retirement.

New Year's Money Resolutions Made Easy

While the holiday season may be the time for spending, it is also the time of the year to start to consider how you want to change your habits with regard to your personal finances.

If keeping New Year's resolutions have always been a bit tricky, being very specific with actionable goals, at least with regard to your finances, is always the best case scenario.

To get you started, here are some money-saving ideas for New Year's resolutions you can feel free to use to kick-start your financial goals:

• Look at your credit cards – One of the biggest problems may be in actually knowing your credit card interest rates and what you can do about them. Take the time to delve into the interest rates you are paying and then work with the companies to lower the rates if and when possible.
• Put aside a set amount per payday – This is a great way to start a rainy day fund, fund your child's college, or even save up for a big purchase. Make sure to use an account that is a true savings account and pass on the debit card to the account if you are an impulse shopper.
• Meet with your accountant – If you have investments and aren't sure what rate they are paying or what tax benefits they provide, now is a great time to review. By meeting with your accountant you can also set out a plan to minimize taxes and take advantage of deductions and credits for the upcoming year.
• Talk to your spouse or partner – If you are in a relationship, working with your spouse or partner is critical. The best saving and budgeting is always when both people are following the same plan.
• Limit credit and debit card use – While it is virtually impossible to be a "cash only" consumer these days, especially to take advantage of discounts online, limiting your credit and debit card use is important. Consider paying off and closing your credit cards and maintaining one card for use that provides rewards and points that help you to save.

Your accountant can help to set financial plans you can live by, so your best resolution may be to schedule an appointment and get in for the help you need.

What Does Your Organizational Culture Say About Your Business?

Despite its importance in terms of attracting or repelling customers and clients, potential investors, and the hottest new talent, all too often organizations think little about their culture and what it says about their business.  In many cases, organizational culture is something that just develops naturally, but as it speaks of the human aspects of the way that a company does business, it is not something that should be left to chance. 

Organizational culture is something which in many ways is hard to define, but essentially it describes the common values, standards and behavior exemplified by a business and the way that the company’s leadership and employees interact with one another and the outside world.  It refers not just to rules and procedures, but with a business’ core beliefs.  

To a great extent, an organization’s culture is determined by its leaders, although not always consciously.  Everything from the way that leadership treats its employees to the mission, vision and values to which it aspires permeates the business and affects the mindset behind all its interactions.  It might be based on power or around people, on innovation, or around rituals and routines.  Whatever the case, an organization’s culture has immense potential to affect its brand image.  What does your company culture say about your business?

De-Clutter Your Life and Keep Things Simple

Time is one of the most precious commodities in our lives, if not the most precious of all, and it is one of the few things that we can never get back.  Today’s lifestyles, however, are so filled with responsibilities and with clutter that we are just left chasing our tails as valuable seconds, minutes and hours slip by.  Both at home and at work we try to fit more and more into our already full lives, not just in terms of activities, but also in terms of possessions. 

Some of the happiest and most contented people in the world today are those whose lives are simple.  They work hard during the day, but their evenings are reserved for the simple pleasures instead of being packed with yet more tasks and responsibilities.    

One of the reasons that people in other cultures are able to achieve a healthier work/life balance comes down to possessions or, rather, the lack of them.  The more we own, the more we have to take care of and the more there is to go wrong.  Why not de-clutter your home and get rid of all those things that you rarely use but that take precious time to clean and maintain and juggle around to make more space?  A little less “stuff” is a small price to pay when compared to enjoying quality time with our families and friends and taking a few moments to watch a beautiful sunset.

Danger: Ignoring Social Media Can Cost You Business! (Part 1)

For over two years my niece (who is also my marketing person) tried to talk me into getting a business Facebook page, a Twitter account, a YouTube account, and a LinkedIn account.  And for over two years I told her to go away and stop bothering me.  I, like many small business owners, couldn’t figure out how wasting my time on these things would increase sales and bring in profits. 

One day she just did it on her own, and the results were almost instantaneous.  You see, I had been blogging to my clients for over a year and was pretty much being ignored.  My blog was being visited by about 2-3 people a day.  I called it doing great work in the dark.  Does it really matter how good your work is if no one sees it?  Almost immediately after she set up these accounts and started linking to my blog articles, the number of visitors increased dramatically. 

And that was enough to convince me that social media was here to stay and that I could no longer ignore it.  In fact, I believe that the rise of social media has fundamentally changed the way every business sells to their customers!  Sounds extreme, but believe me, it’s true. 

In today’s world, before any prospect makes a decision to call you or visit your store, they:

-       Google you.

-       Check out your Facebook page.

-       Find you on LinkedIn, Twitter and YouTube.

-       Read your blog.

-       Read reviews from your happy (and unhappy!) customers. 

And there is absolutely nothing you can do to stop them!  Heck, admit it:  You’re doing the same thing every time you look at making a purchase. 

Jeffrey Gitomer in his book Social Boom! wrote: 

“Today, ALL systems of selling are preceded, and sometimes precluded, by your online reputation.  Before I ever call you, before you ever call me, before you ever meet with me—I already know everything I need to about you.” 

But what he says next should really scare the small business owner who has decided to ignore social media because they think it is just the latest fad: 

“Here are the NEW standards by which you’ll be evaluated, granted appointment time, decided upon, measured, branded, and talked about:

  -Your Google presence and ranking

  -Your online reputation

  -Your business social media presence

  -Your personal website (present or absent)

  -Your blog (present or absent)

  -Your Facebook presence

  -Your LinkedIn connections and recommendations

  -Your Twitter followers and tweets

  -Your YouTube presence” 

Scared yet?  You should be, because the competitor in your market who “gets” social media and learns how to use it effectively will have a huge advantage over you!  They will grow while you decline.  They will get the best customers while you get the customers they don’t want.  They will prosper while you suffer and complain about how bad the economy is. 

(Be sure to check out part 2 tomorrow to see how you can start using social media to increase your sales.)

What Will Happen If I Didn't File My Return On Time?

Every year I hear this question from people who just missed the tax deadline.  I joke that these are the people who believe that deadlines are only recommendations that really don’t apply to them.  Unfortunately, that is not how the IRS looks at it!

Here are the key points to remember when filing late:

1. If you are getting a refund, then there really is no problem, since penalties and interest only apply to any balance you might owe.  Of course, you should file promptly in order to get your money back.  The IRS will not refund you any money owed if you wait three years from the time the return was due.  That means that you can still file for 2010, 2011 and 2012 and receive a refund.
2. If you owe tax, you may be charged a failure to file penalty of 5 percent of the balance due per month (or part of a month), up to a maximum of 25 percent.  So try to get your tax return filed as soon as possible to avoid this penalty.
3. If you don’t pay your taxes on time, you will also be penalized a failure to pay penalty of 0.5 percent per month (or part of a month) up to a maximum of 25 percent.
4. Filing an extension will not eliminate the failure to pay penalty, only the failure to file penalty.  You will still be charged interest and the failure to pay penalty up to the date you finally pay the tax.
5. If you can show reasonable cause for not filing or paying on time, the IRS may abate the penalties.  You should explore this possibility with your tax preparer.
6. Don’t ignore the problem and hope it will go away.  The IRS, like any large bureaucracy, can often take months or years to send you notices about unfiled and unpaid income taxes.  But they will always catch up to you.  Ignoring the problem only makes the balance owed larger and can lead to the IRS seizing your bank account, paycheck, and assets.

Failure to Keep Good Mileage Log Results in Lost Deduction

A couple who used their vehicles in their sole proprietorships found this out the hard way. Their logbooks were riddled with mistakes, questionable entries and other irregularities - so much so that the Tax Court was unable to rely on them. As a result, the Court upheld IRS’ disallowance of all mileage expenses for the vehicles, even though they were partially for business (Moore, TC Summ. Op. 2012-16)

Kiplinger Tax Letter March 2012

We covered auto substantiation rules in greater detail on our blog article (http://bit.ly/Mn6gtb). This is an area that the IRS auditors are keying in on since it is usually a high dollar amount and very few business owners actually keep good mileage logs.

Don’t say I didn’t warn you!

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 Race to Success - Part 1

The Real Reason Small Businesses Fail and Succeed

One of the big advantages CPAs have working with small business owners is that we get to learn what makes them profitable and what makes them fail—without losing any of our own funds.  Not only that, but we are also business owners. We face many of the same opportunities and challenges that other small business owners face.

So what have I learned?  Well for starters, launching a small business is risky, and the chances of building a successful business are small.  According to the Small Business Administration (SBA), over 50% of small businesses fail in the first year and 95% are out of business in the first five years.  Of the ones that survive past five years, less than 1% reach a level that allows the business to survive the retirement or death of the founder.

This is a statistic that many of us have run across before.  But very few of the articles that quote these statistics actually go into detail as to why they fail. The following are the top 25 reasons I have seen for small business failure:

1. Choosing a business in an industry that just isn’t very profitable.  You may love the business, but it is easier to pick a niche in a hot industry with customers eager to buy.  Dan Kennedy said it best when he said, “…the most important ingredient for a successful restaurant is hungry customers.
2. Not having actual hands-on experience in the industry before opening the new business.  The first question I ask someone who comes to my office and says they are opening a new business is, “Tell me what experience you have in this industry?”  Just about 100% of the business owners who had none before opening failed!  Go work in a restaurant before you decide to invest $250,000 in one.
3. Unwillingness by the owner to take responsibility for everything that is not working in their business.  You created this business.  Anything you don’t like about your business, you caused or allowed to happen.  So take responsibility and decide to change what you don’t like.
4. Poor management skills by the owner.  There are very few born entrepreneurs and there is no job that really prepares you to be the boss.  You will have to learn on the job. In today’s information age, there is no excuse for not learning management skills.
5. Lack of necessary effort by the owner. They often don’t understand that they are not in a 9-to-5 job anymore.  If you want a 40-hour work week (or even a 50-hour week), don’t start a small business!
6. Unwillingness of the owner to be a continuous, lifetime learner.  In my lifetime I have had to completely reinvent myself and my business at least six times.  No business model will produce a profit without adjustment.
7. Failure to have a business and marketing plan.  Business ownership proves the saying, “Failing to Plan is Planning to Fail!”
8. Inadequate cash reserves.  In small business, CASH IS KING!  If you make a profit but run out of cash, you will have no choice but to close your doors.
9. Failure to truly understand their customers’ wants and needs. This also includes not understanding what triggers a customer to buy.  What you think the customer wants is totally immaterial.  The only thing that matters is what your customers think they want.  Never stop talking to them!
10. Lack of marketing & sales skills.  A business without customers is called a hobby.  This is an area that seldom comes naturally to most business owners.  But, unlike when I opened my business, there is tons of information available on the web and many online coaching programs can help you improve your sales & marketing.
11. Failing to price your product or service correctly.  Too high, and you may not have enough customers. Too low, and you may not make a profit.
12. Failure to anticipate or react to changes in the marketplace, competition, or technology.  Change is constant.  Adapt or die!
13. An overdependence on a single (or a few) customers.  If you have one or two customers that represent 90% of your sales, you don’t have a business—you have an outsourced job.
14. Uncontrolled growth.  Too much of anything is a bad thing.  Growth without planning and systems is a guaranteed way to fail big.
15. The owner believing they can do everything themselves.  If you want your business to grow, you must be able to create economies of scale.  This means you must become good at delegating and managing your employees.
16. Poor customer service.  Sales and marketing gets you the first sale.  Customer service gets you repeat sales.
17. Unqualified or untrained employees.  Employees are one of the major expenses of almost every small business. Hiring bad employees or failing to train the good ones is a quick way to fail.
18. Failure to seek outside professional help.  Every professional athlete has a coach.  So why do so few business owners feel they could benefit from one?
19. Employee fraud.  Fraud, especially by bookkeepers (just Google bookkeeper fraud) is a major cause of small business failure.  Get your CPA to review your internal controls.
20. Poor location.  This is particularly true in retail, restaurants, and bars.
21. Poor inventory management.  Excessive inventory ties up cash and leads to old unsellable inventory that must be written off.
22. Not collecting your receivables.  It’s not really a sale until the money is in the bank. (See our article in this issue for tips on reducing receivables.)
23. No systems.  It’s very hard to manage people.  But it is very possible to manage well thought-out and designed systems.  Systems allow you to deliver a consistent experience to your customers.
24. Over-borrowing and not matching the correct loan type with your need. Closely related is not borrowing enough.  Be sure to read our interview with a commercial loan officer in this issue for many more vital tips.
25. Failing to innovate and introduce new products or services.  The quickest way to make a profit is to sell more products to your current customers.  If you don’t, your competitors might.

But while avoiding failure is obviously important, it won’t guarantee that you will make massive profits and build a business that has value once you decide to sell it.

So what is it that the very best business owners do that makes them successful?

Find out tomorrow in part #2 of The Race to Success.

Small Business REHAB – “Survival Mode”

 

Typically, people think of drug addicts or serious injuries when they hear rehab. We all know rehab is short for rehabilitation and with the current business market businesses need some serious rehabilitation! Days of letting things slide and splurging on meaningless expenses are long gone. A discussion I am having with business owners’ way too often is – “My business is in trouble! What do I do?” So what should a business owner do? Go into survival mode and rehabilitate!

When should you a business owner go into “survival mode”? For most it is obvious – they can’t collect and pay mounting bills. But, for many it sneaks up on them. Here are the common signs that your business is in trouble:

· When more cash is going out than what is coming in.

· When your bank account balances fall below their normal for two straight months.

· When future sales outlooks are dim.

· When your 941 payroll tax deposits cannot be paid on time.

 

 

So what do you do once you realize your business is in survival mode?

 

First, the business owner must “adjust their attitude”.

 

The business owner’s ability to adapt to their current situation is the number one predictor of whether the company will survive or not. A business owner must:

· Stop panicking, take a deep breath and take a proactive stance.  Start thinking and planning.

· The business owner must understand that this recession is real and that business failure will severely affect their family, employees and creditors.

· Accept the responsibility! Everything good or bad that happens is a result of decisions YOU have made and will make.

· Forget the past. Fixating on your mistakes will just enable you. (I am often guilty of this one. Thank God my wife is around to knock me out of it!)

· Go back to your roots. Understand that this will be hard and will take extra time and energy while the business is in “Survival Mode”.

· Go into business overdrive. When you are at your business:

o    Don’t answer non-business email.

o   Don’t waste time on social networks (Facebook, MySpace, Twitter, etc) unless of course it is business related.

o   Don’t surf the web.

o   Don’t make personal calls.

· Stay positive! Visualize success constantly.

· Eliminate the blame game. Remember it’s always your fault – So just fix it!

· Set goals in writing. Better yet, write a business plan. Get your goals down and keep them where you can see them to serve as a reminder.

 

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.

Never Totally Trust Your Bookkeeper!

Over the years I have spoken to literally hundreds of business owners who have had problems with their bookkeepers. The lucky ones only had incompetent or lazy bookkeepers who only provided financial statements that were so wrong that they were useless as a management decision tool.

The unlucky business owners hired bookkeepers who stole thousands of dollars from them. Most of this theft resulted from the business owner totally trusting them. Why? Well the main reason is that the business owner just hates anything to do with bookkeeping! They would rather be out making a sale and working on producing the product or service so that they can get paid. Who can blame them? But, this trust can go way too far! I have seen business owners let their bookkeepers run the business finances in total. This often includes receiving the money, paying out cash, making deposits, signing checks, using the company & personal credit cards and then relying on them to prepare all the bookkeeping. I know they trust them but do they have to tempt them?

Though some employers are unlucky enough to hire a professional embezzler, most theft starts small as a onetime thing when the bookkeeper has a problem. But, they don’t get caught and they realize how easy it is so it grows. The bookkeepers rationalize it by saying they are running this company and are not being paid what they are worth. So, they deserve the money since they “earned” it!

The employer often thinks their CPA will find it. Wrong! We are hired to do tax returns or financial statements not to perform an audit. Often theft occurs before the cash is ever booked. Most often the theft is payments to cover the bookkeeper’s personal expenses that the CPA has no way of knowing they are not business expenses. There are at least a dozen ways a smart bookkeeper can cover their tracks.

So, what should the business owner be doing?

1. The business owner should sign all checks. Before they do, every check that is given to them to sign should have attached all relevant backup data so the owner knows what is being paid and who ordered it.
2. The business owner should make the daily deposit and compare it to the daily cash receipts report. (If you don’t have one you better call your CPA for help in designing one!)
3. The business owner must control all access to company & personal credit and debit cards. Be sure not to share passwords!
4. The Owner must get the bank statements and open them personally. Better yet, they should review the bank credit card activity on line daily or at least weekly.
5.  The owner should reconcile their bank monthly. If not them, they should hire someone else like their CPA to reconcile their bank accounts. Just be sure it is not the bookkeeper.

Remember, the job of a good professional embezzler is to become the trusted bookkeeper! Never ever totally trust your bookkeeper.

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

P.S. If you don't believe me, google embezzlement and bookkeeper.

3 things a boss doesn’t want to hear

Healthy collaboration depends on information sharing. However, when you are sharing information with the boss, you should keep these statements to yourself: 

• “There is only one solution.” Like a carpenter with only one tool, you may tend to see most problems from the same angle. However, just as you can’t expect a hammer to meet every carpentry need, you cannot expect an identical approach to succeed for every workplace problem. If you do, your boss will see you as a roadblock. Better: Share your first impressions of the situation, and ask the boss to do the same before you brainstorm together. 

• “No way.” Sometimes you may not be able to meet the exact goal, but you should never say that the goal is impossible. Tell your boss some of the challenges you see, and then start a conversation about ways to beat the biggest obstacles. 

• “Surprise!” No boss likes to hear that, particularly when the news is unpleasant. Discuss looming threats with your boss before they materialize, so the two of you can plan to overcome or compensate for them.

Recognizing burnout before it flares

Do you feel constantly tired and irritated by work? 

Burnout’s symptoms are as varied as those who suffer it. Some people get angry, some become quiet and introverted, while others overeat or abuse drugs and alcohol. 

If your job is stressful, it’s important to find out if you’re headed for job burnout. Some common pressures include job demands, changes in the workplace or unbalanced work-family time. 

Here are some of the best defenses against burnout: 

• Eat a healthy, balanced diet and get enough rest and exercise. 

• Make balance a priority. Have a rich life outside of work, as well as activities and people who bring you satisfaction outside of the office. 

• Reach out for help. Build a strong support system, and make sure you’re not with people who spend time complaining. 

• Come up with solutions. If you talk about a problem, make sure you add what you want to do about it and how you see yourself contributing to a remedy. 

Eight common feelings associated with burnout: 

1. Inability to be effective at work. 

2. The workplace demands more than you are able to give. 

3. Nothing you do is good enough. 

4. You are anxious and dread going to work. 

5. You are always tired, even when you get enough sleep. 

6. You’re bored most or all of the time. 

7. You feel guilty. 

8. You feel hopeless, powerless and futile.