/Running A Small Business

Fall Tips To Help Your Business Have A Strong End-Of-Year Finish

Although most of the year has already passed and we’re now into the autumn season, don’t panic if your business has fallen a little bit behind on its goals. It’s not too late make changes that can help lead to a strong finish in 2016.

Whether you’ve just started your business or have been running yours for years, the key is to take action sooner rather than later—and to focus on efforts that will improve your bottom line now and into 2017.

 

  1. Nurture Customer Relationships.

If you’ve fallen out of touch with some customers, now’s the time to reconnect. Just be careful to do so with their best interests at heart, so you don’t come across as desperate or pushy. One easy way to start conversations is by emailing them an interesting article that has information they can benefit from. I recommend reaching out to each select customer individually rather than in a mass email. By personalizing your communications, you’ll make them feel special—and more engaged in revisiting the status of your business relationship.

Also, consider putting a formalized customer relationship management process in place, so there’s a method (rather than madness) in how you follow up with customers after certain actions, transactions, or lack of activity. A number of customer relationship management systems (at varying price points) are out there that can help you track customer activity and automate personalized communications.

A little goodwill and top of mind awareness can go a long way in generating more sales, so it pays to check in with customers regularly to show you care.

 

  1. Upsell, Upsell, Upsell!

Why would you not seize the opportunity to sell more products or services to the customers who have shown they’re raving fans of your brand? If you haven’t been sending emails or postcards or calling loyal customers with information about your other products and services, you’re missing sales opportunities.

Afraid you’ll seem pushy? You don’t have to fear that if you approach customers with the intention of helping them solve a problem or benefit in some way. As I mentioned before, showing you care fosters goodwill and can generate sales as a result.

 

  1. Streamline Your Administrative Activities.

Take a moment to review your administrative processes and discover where you might have excessive paperwork, duplicate work, and bottlenecks that are slowing down productivity. From accounts payables to billing to project management to customer data entry, look for ways to save time by streamlining tasks.

 

  1. Keep Spending In Check.

Although you should always be cognizant of your business’s spending habits, it’s especially critical now if you’re behind schedule on reaching your financial goals for the year. Look closely at your costs, and zero in on the “must haves” versus the “nice to haves” so you can cut out unnecessary expenses. Lowering costs has a direct impact on your profit and loss statement, so if even if you ignore all other suggestions, pay attention to this one!

 

  1. Make Sure You’ve Met Your Business Compliance Requirements.

Rather than discover you’ve dropped the ball, check to make sure all your t’s are crossed and i’s are dotted now regarding your business compliance responsibilities. If required, have you filed your initial and/or annual report and complied with your business license and permit obligations? Corporate compliance services like those from CorpNet can help you ensure you’re up to date and won’t be hit with penalties. Best of all, when the New Year begins, you’ll be able to focus on activities that will drive revenue rather than put out fires.

 

  1. Think Ahead About Your Business’s Direction.

Whether you’re just starting your business or planning to close it, taking care of matters before the end of the year offers some potential advantages.

If you plan to launch your business in 2017, you can avoid becoming over-stressed during the busyness of the New Year by taking advantage of CorpNet’s delayed formation filing process. It allows you to submit your formation paperwork before the end of the year, but make the effective date of your business the first of the year.

If you know you’ll be closing your business in the near future, you might consider taking care of filing for dissolution now. Doing so before year-end might help you avoid paying additional taxes and penalties.

 

Move Your Business Forward This Fall—And In The Future

Also, think proactively about what you can do to succeed in 2017. All of the things I mentioned earlier will help, but also consider reviewing your choice of legal structure for your business. By making a change to an LLC, S Corporation, or C Corporation, you have the opportunity to gain liability protection and possibly some tax advantages, as well.

By putting more effort into your customer relationships, running your business more efficiently and cost effectively, and paying attention to compliance requirements, you’ll be taking positive steps toward a strong finish in 2016 and a successful start to 2017.

Hiring the Best Candidates: 3 Filters to Add to Your Interview Process

Some studies estimate that the cost of hiring someone is approximately six to nine months’ of their salary. An employee making on average $40,000 might cost $20,000 or more to find if you factor in the time to recruit, screen, hire and train new employees. With so much on the line for finding a great candidate, it’s critically important to do your best to screen potential employees as rigorously as possible.

Weeding out those who aren’t qualified is easy, but screening the final group for the star performer in the mix is difficult. These three filters to add to your interview process can help.

 

Three Filters to Add to Your Interview Process

The typical hiring process includes:

  • Creating (or updating) a job description for the vacant position.
  • Writing and placing a help wanted ad.
  • Receiving resumes.
  • Screening resumes.
  • Telephone interviews to screen candidates.
  • In-person interviews with the best candidates.
  • An offer and someone hired.

Keep in mind, that selecting the right job boards to find employees online is important to your hiring process as well. Of course, at any point in the process, you may add steps or people, which lengthens the process but helps hire better candidates. Many companies now ask that a potential employee’s manager, coworkers and subordinates interview candidates so that they can assess how well candidates get along with people throughout the organization.

Adding the following three steps to your interviewing process won’t slow it down too much, but it will help you narrow down the candidate pool to the best-qualified applicants. This will actually save you time later since there will be fewer resumes to review and consider.

 

#1 Enhanced Job Description

When you start with a specific, enhanced and updated job description, you already start the process of being specific and choosy with your applicants. A highly-specific job description immediately attracts only those with such specific skills, while turning away others who do not possess them. The enhanced job description should detail every aspect of the position, including educational and experience requirements, specialized skills, and more. Take this information and include it in your job posting to encourage candidates with the best fit of skills to respond. When you are posting to job sites, the enhanced position description will make it easier to set up your job posting so that only the best-qualified will respond. This significantly cuts down on the number of unqualified candidates who apply, and saves you a great deal of time reviewing resumes.

 

#2 Pre-Employment Survey

After you receive resumes and cover letters from the initial job postings, it’s helpful to ask the most promising candidates to take a brief survey. You can ask them after the telephone interview or before it via an emailed response to their application. You can even add it to the application itself, before they even submit their resume. The survey can be created on a site like Survey Monkey to make it easier to collect the information. Ask questions pertinent to the job you’re hiring for, and make them specific so that it is difficult to fudge the answers. Provide scenario-based questions to see how potential employees would handle difficult situations, or ask questions that only someone with the right skill set can answer. The survey shouldn’t take too long to complete, but it will yield insights into the candidate’s’ qualifications and knowledge, so that you can save yourself time by scheduling telephone interviews with only the most promising candidates.

 

#3 Give homework.

A paid test assignment, or a homework assignment of some sort, is the final task that many employers can add to find great candidates. If you’re hiring freelancers, always offer compensation for their time completing a paid test assignment; many professionals won’t touch a free assignment even if the actual gig is promising. The test assignment can be a small sample of a larger project that the candidate would be expected to complete if actually hired for the job.

For full-time employees, a simple ‘homework’ assignment demonstrates several things. First, it shows you how committed and interested they are in the job. Next, it provides proof of their ability to complete work independently. Lastly, it provides you with insight into how well they can meet deadlines. These are three tasks that are difficult to assess from a resume but critical for job success.

See how the candidate responds to the test assignment. Those who are eager for the job will respond positively. Also listen for how well they negotiate deadlines and the questions asked about the assignment. This yields important clues about their work habits, ability to understand direction, and interest in the position.

 

Don’t Settle for Second-Best

It’s tempting to rush the hiring process along. A vacancy means lost productivity and extra work for your current team. However, rushing the hiring process never yields the best candidate. Take your time to find the best fit for your business and your business will prosper.

                               

5 Types of Insurance Every Small Business Needs

Ready to take your small business to new heights? As a small business owner, you’ll need every advantage you can find in today’s highly competitive, global business landscape.

Becoming the next startup like Uber or Airbnb that now are valued at $1 billion or more by venture capital firms worldwide remains an uphill climb. As such, small business owners may devote substantial time and resources to grow their companies, yet many of them will fall short of achieving their long-term business goals.

Attention to detail is what separates an average small business operator from an extraordinary one. With the right types of insurance in place, small business operators can protect their assets as they grow their companies.

Here are the types of insurance you may need to achieve your business goals:

1. General Liability

General liability insurance offers broad protection for small businesses. It ensures they are covered against a variety of risks, including:

• Bodily injury
• Property damage
• Personal injury

The costs associated with general liability coverage often vary based on risk. Thus, if you work as a roofing contractor, you may be forced to pay more for general liability insurance than a food truck operator. Or, if you run your business out of a home office, your general liability insurance expenses will likely be minimal.

Regardless of your business type, general liability insurance can make a world of difference for small businesses across all industries. This insurance guarantees that even if your company makes a mistake along the way, you’ll be protected. You’ll be better equipped to maintain your business’ day-to-day operations and focus on what’s important—growing your company.

2. Property

Like general liability coverage, property insurance protects the future of your business by safeguarding your office equipment, inventory and even others’ property.

Furthermore, property insurance protects your company in the event that a major disaster damages or destroys your workspace. This means that even though a fire, busted water pipe or major storm could devastate your business assets, you’ll be covered until your company can return to its regular operations.

3. Auto

If you operate a vehicle to deliver flowers, carry equipment to and from work sites or use a car or truck to perform various everyday work tasks, you’ll want to purchase business auto insurance.

In many cases, a small business operator may own a car and use a personal vehicle as part of his or her business operations. Your personal auto policy in some cases may not cover you if you suffer an accident in a car that you use primarily for business, therefore it is important to discuss with an agent to determine if you need a business auto policy to protect you against certain risks as you travel from place to place. If you purchase the right business auto insurance and set appropriate coverage limits, you’ll be protected whenever you use your vehicle for work.

4. Professional Liability

Don’t let a single professional error bring down your business. Instead, purchase professional liability coverage, and you’ll be able to protect your company against accidental errors and omissions.

Let’s face it—even a diligent small business owner will occasionally make a mistake. From an accountant who processes a client’s tax return incorrectly to a hair stylist who damages a bride-to-be’s hair before a wedding, accidents can happen at any time, and these problems can become major issues quickly if you’re not careful.

Fortunately, professional liability insurance will enable you to cover the costs associated with damage or other problems due to a professional mistake. This coverage may prove to be exceedingly valuable for startups, and ultimately, it may even help a small business operator become more comfortable performing day-to-day tasks. Professional liability insurance can allow small business owners to work more confidently and efficiently without having to worry about how a single professional error could potentially harm his or her business.

5. Workers’ Compensation

Workers’ compensation coverage is a requirement for businesses in every state except Texas. It provides a small business owner and his or her employees with protection in the event that an employee suffers a work-related injury or illness.

In addition, workers’ compensation coverage provides small business operators with a great opportunity to build goodwill with employees. If an employee suffers an injury or illness and is unable to return to work, he or she will receive sufficient compensation thanks to this coverage.

Small business owners are all too familiar with risk. With the aforementioned types of insurance at your disposal, you’ll be better equipped to manage business risks both now and in the future.

ryan-hanley

About Ryan

Ryan Hanley is the Vice President of Marketing at TrustedChoice.com and the Managing Editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, “Content Warfare.” Ryan has over 12 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.

 

By | October 13th, 2016|Business Operations, Running A Small Business, Startups|3 Comments

5 Reasons Your Business Needs a Blog

More people are purchasing goods online than ever before, and adding blog content to your website helps capture the attention of digital shoppers and beyond. U.S. eCommerce sales in the second quarter of 2016 reached $97.3 billion, an increase of 4.5 percent quarter-over-quarter and a whopping 15.8 percent increase year-over-year, according to the Department of Commerce. When your company provides blog content your potential customers are searching for, you build trust in your business and increase positive sentiment about your brand, which leads to sales when blog visitors need your product or service.

Your competitors are already blogging. The Content Marketing Institute reports that 77 percent of businesses have a blog they use for content marketing, and the same percentage planned to produce more content in 2016 compared to 2015.

If you’re still on the fence about whether or not to add a blog to your marketing tool set, consider these five advantages.

1. A Blog Is Agile Marketing

Unlike ordering hundreds of T-shirts for a giveaway donning a logo that may change next week, or investing in banners and flyers that become useless and irrelevant when your next promotion is over, a blog is changeable in an instant with minimum cost to your marketing department. You can update it quickly with breaking news about your company and post trending content based on popular hashtags on Twitter. You can also create evergreen content for your audience, which can then be re-purposed into everything from eBooks and info-graphics to podcasts and webinars for years to come.

It’s also fairly easy to measure a blog’s effectiveness, so you can adjust your strategy accordingly. Compare that to spending big money on print materials, where performance is much more difficult to track. Content marketing expert and author Jay Baer presents an easy way to calculate blogging on his site, Convince & Convert. And by working with content creation and management software such as ClearVoice, you can scale your efforts more easily.

2. A Blog Boosts Search Engine Optimization

If your business sells a service or product that has dozens, hundreds or thousands of competitors, ranking higher in search results makes you more visible to those who are searching for your solution online. GE Capital Retail Bank reports more than 80 percent of shoppers who are making a major purchase conduct research online before deciding on a retailer. By tailoring blog content based on the content those shoppers are looking for, your brand is more likely to appear in their search results.

For example, if you’re a flooring installation company, and you discover your target customers are often searching, “Is carpet or hardwood better for my floors?”, you could create a blog post using that exact question as the title so that it shows up in results to that query.

Regularly creating new content — at least weekly is optimal — based on keywords that relate to your brand and what your target customers type into search engines provides a cue to search engine bots to continue to crawl your site and index your posts in their results. Featuring guest bloggers who link back to your blog on their own credible sites, creating content that is so valuable that other reputable sites link to it as a credible source, and guest blogging on other legitimate sites in exchange for a link back to your blog page mean your blog builds authority to search engines and boosts your entire website’s search engine optimization, which in turn benefits your product pages, too.

3. A Blog Increases Your Brand’s Exposure

In addition to gaining more traction on search engines by blogging, by producing content your web visitors will enjoy and feel compelled to share means your business is equipped with a powerful new arm in your marketing department: brand advocates. These content consumers share your blog on their social media pages, they email its content to their friends who need it, and they reference it when someone mentions a need for a product or service you offer.

While it is obviously relevant to include content on your blog that relates directly to your service or product, the better content strategy is to aim to be helpful, not sales-y. Blog content should educate, entertain and delight, so that it maintains attention and keeps visitors coming back for more.

By promoting blog content through your own social media channels, email newsletters, etc., you’re allowing it to be picked up and spread to completely new audiences by people they place confidence in. Since Nielsen reports 92 percent of people trust the recommendations of friends and family over all over forms of advertising, using a blog to engage your customers so much that they want to tell their friends about your business is of paramount value.

4. A Blog Establishes You as an Authority in Your Space

Speaking of trust, creating blog content that gives actionable advice to readers, video viewers or podcast listeners extends your reach beyond content creator to one of dependable expert.

Say you sell gluten-free flour. By producing content related to delicious gluten-free recipes, how to navigate ordering at a restaurant when you have celiac disease, and how to be a better baker with instructional cooking videos, you’re presenting content that benefits your current customers as well as those who haven’t bought it yet. You’re going to show up more in search results related to these topics, so you’ll reach new audiences — people who need your product but haven’t discovered you yet. Plus, you’ll gain return visitors who keep coming back to learn more about how to thrive in a gluten-free lifestyle.

Producing trustworthy, educational, useful content may also lead to significant publicity opportunities, such as guest spots on morning television news shows or being included as a source in a larger story. A blog legitimizes your leadership in your industry, since it allows you to become the site large audiences turn to when they want to learn about topics related to what you offer.

5. A Blog Connects You With Your Customers

Your competitors have blogs, and your customers love to read blogs. Blogging platform WordPress reports more than 409 million people view more than 22 billion blog pages per month. They read them while they’re at work, they read them while they’re waiting in a doctor’s office, and they read them on the subway. You have an audience who is thirsty for content.

By blogging, you not only provide them with knowledge or entertainment, you also build a relationship with your visitors. By integrating a commenting system, you can glean insights on the demographics of your readers. You can learn about their thoughts and opinions and what types of content or products they want from you. They can tell you what they’re loving about your brand and what they wish would be improved upon.

Get Going!

The possibilities of what your business can achieve by launching a blog are vast. A blog allows for real-time marketing, for you to improve your website’s and brand’s reach among current consumers and new prospects. A blog enables you to give helpful information to those who can turn into significant, loyal brand advocates for your business. With dozens of free blogging platforms to use and the power of content ideation within everything from your staff’s ideas to what people are talking about on your social media channels, getting started can bring more positive exposure to your business and improve your marketing efforts.

                               

Ready For Estimated Tax Payments?

When starting a business, you need to do quite a bit of heavy lifting. Of course, a big part of this is handling the complexities of the US tax system. In fact, one particular area that often trips up entrepreneurs is something called estimated tax payments.

The main reason is that this is quite different from when you have a job. You see, a self-employed person needs to essentially do what an employer does – that is, make ongoing payments to the IRS.

This often comes as a complete surprise to first-time entrepreneurs. After all, when April 15th rolls around, they usually get stuck with fees from the IRS for interest and penalties. But even worse, the overall tax bill can be hefty. As a result, you may have no choice but to take steps to resolve this, such as with an installment agreement (hey, the early days of a startup can be very lean).

So what do you need to know about estimated taxes? First of all, they include not only federal income tax but also the amounts for Social Security and Medicare. You’ll also need to make equal payments according to the following schedule:

April 15 (first quarter)
June 15 (second quarter)
September 15 (third quarter)
January 15 (fourth quarter)

Note: You may also have to pay estimated taxes for the state you are based in and the deadlines could be different (as is the case with California).

OK, there are some exceptions to being required to make estimated tax payments. They include:
• You expect to owe less than $1,000 for the year (whether as an individual, sole proprietor, member of an LLC or S-Corporation)
• You did not have to pay any taxes during the prior year
• You have a corporation where you expect to owe less than $500 for the year
• You are in an area that has suffered a natural disaster

Now, if you do not meet the above, you will need to follow either of these:
• You pay 100% of the tax you paid for last year (the percentage is 110% if your adjusted income is $150,000 or $75,000 if you are married and file separately) or
• You pay 90% of what you will ultimately owe for the current tax year.

And if you have a corporation, the requirement is that you pay the lesser of
• 100% of the tax you paid for the last year or
• 100% of what you will ultimately owe for the current year.

But as should be no surprise, coming up with the amounts can be tricky. In fact, you may ultimately pay way too much, which essentially means you are loaning money to the IRS! Because of this, you may want to use software like TurboTax or get the assistance of a tax professional.

And once you come up with the amount, the process of making the payment is straightforward. You can either file Form 1040-ES or Form 1120-W (for a corporation). But the easiest approach is to use the IRS’s Electronic Federal Tax Payment System.

The good news is that – once you get things setup – the process of handling estimated taxes should be smooth. But of course, the important thing is to make sure you make it a habit.

                               

By | September 20th, 2016|Business Filings, Running A Small Business, Taxes|1 Comment

Running Your Business: Do You Know What You Don’t Know?

With school back in session, students of all ages are learning new things—and discovering how much they don’t know in the process. Whether you’re an aspiring entrepreneur or long-time business owner, one thing is certain: like the kids who are back to school, you always have room to learn and grow.

As I’ve learned and grown as a business owner, one of my favorite phrases has become, “You don’t know what you don’t know.” How true, right? It’s far too easy to fool ourselves into thinking we really know all there is to know. But the truth is we will never ever know everything when it comes to starting and running a business, because things change all the time. We have to “school” ourselves. That means doing additional research and staying tuned in to new developments. The business climate, legal requirements, and technology constantly morph, sometimes subtly and sometimes significantly. If we don’t keep up with the various moving parts that affect us, our businesses could fall behind—or worse.

So I urge you to stay attentive and continue to learn about what’s new or what has changed with respect to:

  • Business structures, liability protection and filing requirements– for example, potential benefits of changing from a sole proprietorship or partnership to Corporation, an S-Corporation or a Limited Liability Company.
  • Tax laws and filing requirements – such as changes to the business tax rates, mileage reimbursement rates, valid tax deductions, filing deadlines etc.)
  • Corporate compliance requirements – such as annual reports, tax deadlines, permit and license filing due dates, etc.
  • Marketing tools, best practices, and regulations – like new social media platforms and automation tools, SEO, content marketing, the CAN-SPAM Act, etc.
  • HR issues – including employee benefits, hiring, firing, affirmative action, documentation requirements, etc.
  • Business technology – like cloud-based accounting software, CRMs (customer relationship management systems), virus and malware protection, mobile payment platforms, etc.

This is just the short list! Basically, anything related to entrepreneurship demands ongoing learning, because owning a business isn’t a static condition but rather a dynamic process. So as the kids strap on their backpacks this school season, prepare to gear up for your own journey in learning. Trust me, your homework will pay off!

Looking to start your own business? Remember, you don’t know what you don’t know—and we can help fix that. Download our free Starting A Business Checklist now! It’s a sure way to learn about what you need to do to get a successful business off the ground.

                               

My Labor Day Challenge To Entrepreneurs

As most people gear up for the Labor Day weekend—preparing to grill burgers, mix cocktails, and enjoy some downtime—I know some of you entrepreneurs will find it difficult to step away from your businesses. Yes, I too have been there. But on my journey, I’ve learned that while Labor Day was created to honor the contributions of workers, it doesn’t mean you should “celebrate” by working on the holiday. There truly is a time for work—and a time for play!

My Labor Day challenge to all business owners out there is to make a conscious effort to enjoy the holiday with family and friends. As difficult as it may be, set your mind to leaving your cares centered on starting and running your business behind for the day. Giving yourself a break—a real, no-nonsense break—brings many benefits. And it’s highly unlikely (for most types of businesses, anyway) that taking the day off will impair your business success.

My Labor Day Challenge To You
• Don’t turn on your laptop or tablet.
• Plan something fun to do with the people you love spending time with.
• Put your smartphone away—except to snap selfies with your significant other, your kiddos, your friends, and your pets.
• Pause to think about how wonderful it is to be carefree for a while.

The Perks Of Not Laboring On Labor Day
• Clears your mind – Which can improve your focus when you go back to work.
Alleviates your stress – Mentally and physically.
• Reconnects you with the people you care about. – Without work-related distractions, you’ll be able to more fully concentrate and engage in quality conversations.

I realize it might be difficult for you to push work aside, but resist the urge to succumb to the lure of sneaking in an email or checking your business social media on Labor Day. You’ve labored plenty to start your business and run your company. You deserve this day of rest and relaxation!

Happy Labor Day to all you hard-working entrepreneurs! Want to simplify your business filing and compliance efforts and enjoy more time doing the things you love EVERY day? Sign up for CorpNet B.I.Z., and never miss another filing deadline.

                               

By | September 1st, 2016|Business Operations, Running A Small Business|0 Comments

How a Small Business Can Avoid Being Audited

It’s true that the odds of being audited are fairly low – under 1%.  Yet this may not last long.  The IRS has been changing some of its procedures – such as allowing agents to conduct audits via mail — and has also been increasing its hiring.

Besides, the agency tends to focus more on smaller businesses.  Why?  The assumption is that the recordkeeping is not as disciplined and business owners may be doing their own tax preparation, which could increase the risk of getting things wrong.

When it comes to audits, though, there is one important thing to keep in mind:  the selection process is mostly done by a massive computer, which crunches huge amounts of data to find missing income and inconsistencies.  All this is put into something called a DIFF (Discriminate Income Function) score.  The higher it is, the higher is the chances the IRS will pick you.

No doubt, an audit is often a stressful experience as well as time-consuming and expensive (yes, the kinds of things that can be poisonous for a business). And if you lose to the IRS, the outcome could be devastating.

So what are some of the ways to help avoid the prospects of an audit?  Well, there is nothing you can do that is full-proof (hey, we are dealing with the IRS here!)  But there are some strategies that should help out:

Know The “Hot Buttons”:  There are certain types of deductions and credits that raise questions, especially with the IRS computer.  Often alarm bells go off when there are large amounts of items that appear to be personal, such as entertainment, meals and travel.  But there are other deductions that can trigger scrutiny like casualty losses, health expenses and bad debt losses.

Now this does not mean you should avoid these.  But rather you need to make sure you document the expenses and have a business purpose for each.  This is where having a solid cloud accounting system – like QuickBooks or Xero – can be a godsend.

Something else:  If there is a large amount of a certain type of deduction, then you might want to attach a statement that explains it and also provide copies of supporting documents (like receipts and checks).  This may be enough to stop an audit when someone from the IRS reviews your return.

Don’t Miss Deadlines:  A great way to help increase the odds of an audit is to not file your tax return.  In fact, the penalties can be onerous.  So even if you cannot pay your tax, you still should file your return.  Period.

Report Your Income:  I know there are times when it seems like it would be impossible for the IRS to know if a payment was for business or not.  But keep in mind that the agency has spent years developing systems to detect unreported income.

Avoid Round Numbers:  Yes, it seems the IRS computer will take this into account.  Let’s face it, there would be understandable skepticism if you put $2,000 for meals and entertainment.  It simply looks too contrived.

Self-Prepared Returns:  Granted, applications like TurboTax are excellent.  They use sophisticated analytics to check for errors and even provide you with the chances of an audit.

But software is never full-proof.  If you provide the wrong information, then you may be get the attention of the IRS.

Instead, if your return has been prepared by a tax professional, then this should give the agency less confidence in pursuing an audit.

Hobby or Business:  If your business looses money year after year, then the IRS will likely target you.  The reason is that the agency may consider your operation a hobby, not a business.  If this situation, you may have a large tax bill as you will lose plenty of deductions.

Then what do you have to do to be considered a business?  First of all, the IRS will presume this if you report a profit for three out of the five past years, then you should have no problem.  But if not, then you will need to provide convincing proof that your operation is not really just a way to reduce income from other sources.  And this can be pretty tough to do.

Incorporate:  The audit rate for those who file Schedule C’s is much higher than the average (at over 2%).  Because of this, you might want to consider incorporating, such converting your business to an LLC, S Corporation or C Corporation.

The CorpNet team can help you incorporate or Form an LLC. Call for a free business consultation at 888.449.2638

 Image: Adobe Stock

                               

By | August 16th, 2016|Running A Small Business, Taxes|0 Comments

Email Ethics: What Small Business Owners Can Learn From the Latest Political Scandals

The conversations centered on Hillary Clinton’s email practices and the leaked DNC email messages have probably not escaped your notice. Regardless of political affiliation or viewpoint on the controversies, I think there’s one thing we might all agree on as business owners: It’s important to treat our email communications with care.

We can learn some valuable lessons from the email mistakes and oversights made by individuals in the public’s eye. And we should also think about how we might avoid other sorts of damaging email mishaps.

  • Never badmouth a colleague, vendor, competitor, or client in your email messages. Never EVER assume the only person reading your email will be the one you’ve directly sent it to. If a recipient forwards your email, you never know where it might land. And even if no one forwards it, your sentiments could travel by good old-fashioned word of mouth. That’s not fair to whomever you’re having issue with. A direct, constructive conversation with the person—not a snarky behind-the-back email— will always be the way to go.
  • Be ultra-wary of whom you send anything deemed confidential or proprietary via email. Has the person you’re sharing with agreed to treat the information as such? Is there an agreement in place that could land you in hot water for sharing certain pieces of information? And if you’re not sure whether or not information should be kept close to the vest, find out before you share it with someone else.
  • BEFORE you hit “send,” double-check to make sure you’ve included only the intended recipients in the “To,” “Cc,” and “Bc” fields. This will help you avoid sending confidential information to people you shouldn’t have disclosed it to. Also, if you ignored the advice in the first bullet point above and have vented frustration about someone, double-checking recipients will help you avoid accidentally sending your message to the person you’ve written about. And yes…I know of people to whom this has happened!
  • Avoid Bcing (blind copying) people on email messages. People typically Bc other people in emails when they secretly want to inform those people of what they’ve sent to a “To” recipient. But if a Bc’ed person “replies all,” the gig is up and it can destroy trust and create hard feelings with the direct recipient. Consider keeping others informed by Ccing them instead. That way it’s all out in the open. Or, if you really don’t want the “To” recipient to know you’ve shared your email with someone else, forward it instead. It’s still a bit sneaky, but less risky than a Bc. 
  • Read your email messages out loud to assess tone and clarity. Without the benefit of facial expressions and vocal inflections, email messages can oh so easily become misinterpreted. Always read them out loud to yourself before sending them. That will help you pick up on any hint of harsh attitude that might make recipients feel defensive or angry. It will also enable you to check how clearly you’re communicating. If your email is too long-winded, redundant, or confusing, simplify it so it states what you want to share without making recipients work too hard to understand it.

Whether you’re just starting a business or running an existing one, email is among the most effective, tried-and-true communications tools you’ll have at your disposal. But as these recent political email scandals have demonstrated, none of us should take it for granted. Give your email messages the attention and respect they deserve. Consider the tips I’ve shared, so you don’t fall prey to careless blunders that might hurt your business reputation.

Image: Adobe Stock

                               

CorpNet FAQs – Business Licenses

 

As an online legal document filing service that helps entrepreneurs with an array of startup needs, we get asked a ton of questions from our clients about various topics. We decided to start sourcing these questions and create a new blog post series for our readers, as some of you may be wondering the same thing but haven’t found the answer elsewhere.

Today we are launching our new FAQ series starting on the topic of business licenses. Here are some of our most frequently asked questions on the popular topic followed by answers from our CEO Nellie Akalp. Still have Questions? Feel free to post in the comments below and Nellie will be happy to provide additional insight!

Business Licenses

Q: What’s the difference between a business license and registering a business? If I already registered my LLC or corporation, do I still need a business license? 

A: Registering your business and getting your business license are two different things – and you most likely will need to do both. Registering a new business with the state (either by forming an LLC, corporation, or filing a DBA) provides a legal foundation for your business. Then, the business license(s) gives you the right to operate your business…similar to how a driver’s license lets you drive a car.

Q: How do I know what kind of business licenses I need? 

A: The specific license and permit requirements vary based on your type of business and your location. As expected, a home contractor or restaurant will have more permit requirements than a web designer. Find your business type on our Business Licenses page to check the specific requirements for your business. If you don’t see your specific business listed, give us a call at 1.888.449.2638 and we’ll help you out.

Q: What are the penalties if I don’t have the right licenses for my business? 

A: You can face fines, and even have your business shut down if you are caught operating without the right licenses/permit paperwork in place.

Q: How much does it cost to get a business license or permit? 

A: Exact costs depend on the license type and your location. Find your business type on our Business Licenses page to view the pricing for your particular business license and location.

Q: What if my business is involved in more than one type of activity or has multiple locations?

A:  Each business location and each business type is subject to licensing requirements, so you most likely will need to get the proper permits/licenses for each location and business activity.

Q: How long does a business license last? 

A: Typically speaking, a business license will last one year (although some locales give you the opportunity to apply for a three-year license). If you sign up for our free B.I.Z. service, we’ll automatically notify you when any licenses are coming up for renewal.

Q. If I change my legal structure, can I keep my old business license? 

A. No. Any change of legal entity (e.g. if you change from a sole proprietorship to an LLC or corporation) requires a new business license. If you change your legal structure, you will need to apply for a new business license for the new entity.

Q. Can I transfer my business license to a new owner? 

A. Typically speaking, you cannot transfer a business license from one owner to another. The new owner of the business will need to apply for their own business and specialty licenses.

Do you need help setting up a business license or have a question about another aspect of starting a business? Call the CorpNet.com team today for a free business consultation at: 888.449.2638

Image: Adobe Stock