/Business Finance

Small Businesses & Retirement: What You Need to Know

Top view of male hand assembling the word Retirement with white cards over textured rustic wooden desk.

Did you know that 68 million employees don’t have a retirement savings plan at all? This is often due to the fact that their employers — often small businesses — don’t offer employer-sponsored retirement plans. And small businesses aren’t eager to offer retirement plans for employees, either because they don’t know how to go about doing it or they can’t afford to.

But that may soon change. Illinois is leading the pack with recent legislation that will make it easier for small businesses to offer retirement planning to employees without a lot of paperwork.

Why Hasn’t This Happened Sooner?

Illinois isn’t alone in its concern over this topic; about half of the US states are considering similar plans. But what’s held them back is fear of being sued under the federal Employee Retirement Income Security Act, which puts the U.S. Department of Labor in charge of regulating retirement plans.

Illinois’ plan will reduce liability for states and employers and make it easier for other states to follow suit. It’s still early days, and the guidelines likely won’t be implemented until sometime in 2016. The retirement savings plan will be provided by the state, not employers, which takes the pressure off of them. Continue reading “Small Businesses & Retirement: What You Need to Know” »

By | December 14th, 2015|Business Finance, Managing People|0 Comments

15+ Online Resources for Startup Funding

PC01107If you’re contemplating getting funding for your startup, start by researching your funding options. Once you’ve decided which financing option is best for you, use the following resources to do your homework, find the best company to work with, and position your business as an attractive investment.

Small Business Loans

By far, the most popular type of small business loans are those backed by the Small Business Association. Banks and lenders that offer SBA loans are currently offering loans with interest rates between 4 and 10% and 25 year terms. You can take out an SBA loan for:

  • Starting a business
  • Working capital
  • Purchasing property
  • Equipment, fixtures, Inventory
  • Lease-hold improvements
  • Refinancing debt

The SBA offers general small business loans (through its 7(a) loan program) as well as those targeted to businesses with specific needs, like real estate and equipment loans, microloans, and disaster loans. The SBA also offers grants and other financial assistance. Continue reading “15+ Online Resources for Startup Funding” »

By | December 9th, 2015|Business Finance, Startups|1 Comment

How to Determine Your Best Small Business Financing Options

New business model. New business project start up.

So your small business needs access to more money. Whether you have to buy equipment, stock up on inventory, open another location or simply meet payroll, a number of financing options are available. But with so many business loan choices, it’s tough to determine the best one for you, and selecting the wrong option can be a serious misstep.

Here are some of the most common financing options, which we’ll explore in more detail below.

  • Term loans: Loans give you a set amount of money upfront, then you repay it in fixed monthly installments for the duration of the term. Once it’s repaid, you’re done.
  • Line of credit: Unlike a loan, a line of credit gives you access to a set amount of revolving capital. You pay interest only on the funds you withdraw, and as soon as you repay it, you’re eligible to borrow it again.
  • Credit card: Credit cards function like lines of credit, but they’re used as a form of payment. Their credit limits are typically lower than a business loan or line of credit.
  • Invoice financing and factoring: These two kinds of financing entail a lender paying you an advance on your outstanding invoices, and keeping a certain amount as a fee.
  • Equipment financing: These loans and leases allow you to obtain commercial equipment. Some forms of this kind of financing function as a simple lease, while others allow you to own the equipment when the lease ends.

As you evaluate small business loan options, ask yourself these questions to determine the best way to access capital. Continue reading “How to Determine Your Best Small Business Financing Options” »

By | December 4th, 2015|Business Finance|0 Comments

7 Smart Things Freelancers Can Do For Their Taxes Before 2016

business freelance office workTaxes may be the last thing you want to think about as a freelancer, but they’re still really important to pay attention to. Looking back, did you maximize your business expenses and keep your accounts in order? If not, there’s still time to set yourself up for success come tax time next year.

1. Spend Money (on the Right Things) Before Year’s End

Qualifying business expenses can help reduce your taxable income for the year. If you’ve pined for a new laptop, now is the time to buy it. Not only will it count toward the expenses you deduct on your taxes, but you could get a great deal on it, since holiday sales are happening right now

2. Max Out Your Retirement Contribution

One thing that’s a drag about being a freelancer is that you don’t have an employer matching your 401(k) contributions, nor automatic withdrawals coming out of each paycheck. That means you have to be on top of your retirement savings. Did you realize that contributing to your retirement plan gets you a tax credit of up to $5,500 a year for a Roth/Traditional IRA? It’s better to put that money aside to earn interest for your retirement than to give it to Uncle Sam!

If you’re scrambling to put money in your retirement account now, it’s a good idea to set up an automatic contribution in 2016 to make it easier to hit that limit and maximize your tax credits.

3. Collect All the Money You Can Before the End of the Year

The more money you can collect before 2015 rolls over, the fewer loose ends and unpaid invoices you’ll have to start the year out with. Also, some of your clients may need to use up their budgets this year, so make it easy for them! Continue reading “7 Smart Things Freelancers Can Do For Their Taxes Before 2016” »

By | December 2nd, 2015|Business Finance, Taxes|0 Comments

6 Financial Documents All Businesses Need from Day One

Red Ring Binder with Inscription Financial Documents on Background of Working Table with Office Supplies, Laptop, Reports. Toned Illustration. Business Concept on Blurred Background.

If you’re a small business owner, you’re well aware of how many documents you need to apply for a loan. But these financials aren’t just important to have when you’re looking to pay off debt or expand operations–they can help you plan your business, adjust for changes, and understand all the whys and hows of your success. They give you hard-and-fast information and analyses you should never go without.

Keeping track of a few indispensable documents will give you the insight to be a fast-moving, adaptable, and informed small business owner. Let’s check out how.

  1. Balance Sheet

According to Investopedia, a balance sheet is “a financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time.” In other words, it’s a snapshot of your small business’s financial health–and that’s definitely not something you want to lose track of.

Your balance sheet can tell you how well your business stacks up now to an earlier time, where any danger zones might lie, how flexible your assets are, and whether your current choices are sustainable and successful. Simply keeping track of what you have and what you owe seems obvious, but once you use a balance sheet’s specific breakdown of that information to direct your business decisions, it starts sounding a whole lot savvier.

By having your balance sheet ready on Day One and checking it regularly, you can make informed choices about how to keep your business healthy, and how to keep it growing!

  1. Profit & Loss Statement  (Income Statement)

While your balance sheet can give you insight into your small business’s overall health, your profit and loss statement–sometimes called an income statement–shows an overview of your business’s revenue and expenses. And it’ll keep you informed about the successes and problem areas of your business that you may not be aware of. Continue reading “6 Financial Documents All Businesses Need from Day One” »

By | November 6th, 2015|Business Finance|0 Comments

All About Crowdfunding

Crowd Funding on the Cogwheels.If you’re weighing your options to get funding for your startup, seriously consider crowdfunding. It’s a great way to rally support around your brand (especially if you have new-to-market products that need a little extra exposure) and get the money you need to grow your business.

The Latest News About Crowdfunding

For the past several years, the SEC hasn’t quite known what to do with crowdfunding. It doesn’t exactly fall in with traditional venture capital and investments, and the Average Joe wanted to invest in companies through crowdfunding sites like Kickstarter.

After much deliberation, the SEC finally passed a law that opens up large-scale crowdfunding campaigns to non-accredited investors (i.e. folks like you and me). That’s great news if you’re thinking about launching a crowdfunding campaign, because you’re not limited to the investors you pitch to get money. And little investments from people can add up quickly to tens of thousands of dollars, if you manage your crowdfunding campaign properly. Continue reading “All About Crowdfunding” »

By | November 4th, 2015|Business Finance|0 Comments

Have you Maxed Out Your Tax Deductions?

US tax form 1042, foreign person's US source income subject to Witholding

While you have still got several weeks before the end of the year — and therefore the end of the tax year — now is a good time to think about your tax deductions and make sure that you maximize your business expenses  to benefit when you file your taxes Every expense you invest in your business can be an expense that helps you reduce your taxable income. That’s why it’s important to make sure that you max out your tax deductions before the end of 2015.

What is Tax Deductible?

If you’re new to filing small business taxes, you not might not be sure what expenses qualify as deductible ones on your tax return.

Essentially anything that you use to grow your business, including advertising, office equipment, software, and payroll, are considered business expenses that you need to list on your taxes come April.

Don’t overlook your home office if you work from home. The IRS allows deductions based on a calculation that takes the size of your home office into account, as well as your rent or mortgage.

In this post, you can learn about some other commonly overlooked tax deductions. Continue reading “Have you Maxed Out Your Tax Deductions?” »

By | October 5th, 2015|Business Finance, Taxes|0 Comments

What is Bootstrapping?

Hand writing Bootstrapping with marker, business conceptWhen you start a business, it’s inevitable that you’ll need funding: funding for equipment, inventory, payroll, and oh yea, you might want to pay yourself as well! While you’ve got many options to consider for how you’ll get that funding, bootstrapping is one that might move to the top of your list.

What It Is

Bootstrapping simply refers to funding your startup on your own. The saying “pull yourself up by your own bootstraps” means to help yourself without assistance from anyone else. The same applies to your startup. By not relying on a bank loan or investors to fund your company, you are essentially pulling your business up by its own bootstraps.

Why to Consider It

When you take out a small business loan, you owe monthly payments, and are beholden to that loan until it is paid off. If you bring on investors to enhance your finances, you give up a piece of equity in your company in exchange. Often, they’ll want to give input on how you run your business. If you pay for business expenses with credit cards or a second mortgage, you’re also financially responsible for that debt. Continue reading “What is Bootstrapping?” »

By | October 1st, 2015|Business Finance, Startups|0 Comments

10 Tips to Making Startup Funding Work for You

Whether you plan to create a crowdfunding campaign, pitch venture capitalists or investors, take out a small business loan, or use your own savings, there are strategies to succeeding in your efforts. Here we have 10 tips guaranteed to make your startup funding a success.

If You Seek Funding from Investors…

  1. Know What Investors Want

If you’ve ever watched Shark Tank, you know a lot of startup founders come unprepared for what the Sharks want to know. It should be common sense that you have the numbers the investors will want, but still so many walk away empty-handed, even if they have killer ideas. Make sure you know your company’s valuation, past sales, and any major contracts you’ve secured before pitching an investor.

  1. Have the Right Business Structure

Creating an S Corp is the best way to ensure your startup is attractive to VCs. They don’t want their own personal assets at risk, which is why they prefer to invest in S Corps.

  1. Know Your Audience

If you don’t know who you’re selling to, how can you sell investors on the idea? Come armed with market research so you can identify your ideal customer down to that freckle on her nose. Continue reading “10 Tips to Making Startup Funding Work for You” »

By | September 23rd, 2015|Business Finance, Startups|2 Comments

How Should I Fund My Startup?

Piggy bank wearing a black glasses over yellow wooden wall

Launching a startup is one thing, but finding funding enough to keep it going through those difficult growing pains can be quite another. If you start a business without enough cash for at least the first year, you could be setting yourself up for failure.

Fortunately, there are several funding options for you to consider.

Crowdfunding

This is the hottest way for startups to get a quick infusion of cash. With crowdfunding, you set up a campaign through a site like Kickstarter and open it up to investors. Now, these aren’t fancy-pants $2 million investors. They’re people just like you and me who want to support a business they believe in. They might donate as little as $5, so you’ve really got to build support around your campaign to keep the money flowing in.

As a token of appreciation, most sites require you to offer some sort of compensation or thank you, like a t-shirt with your logo, or maybe an early release version of your product. But you don’t have to pay the money you raise back, which is a blessing. Nor do your investors actually have a say in how you run your business. Continue reading “How Should I Fund My Startup?” »

By | September 16th, 2015|Business Finance, Startups|0 Comments