Merchant Capital Source – Small Business Improvement Blog
You are your business’s most valuable asset. Small business improvement begins with you! Learn how to improve yourself and your small business by reading our blog.
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3 Lessons Parenthood Can Teach About Entrepreneurship
Having kids can make it challenging to run a company. The experience of parenthood, however, can also teach you a lot of things that will make you a better entrepreneur.
Everyone has unique experiences raising children and starting businesses. Chances are, though, that you can identify with these three lessons.
You Need Help to Reach Your Goals
Raising a child alone is nearly impossible. Most people rely on partners, grandparents, friends, and daycare centers. Imagine trying to get your kids in bed without help from someone. Unless you have six hands, you can forget about it.
The same applies to nurturing a business. Learn to delegate tasks to people you can trust. Without them, you’ll work so hard that you run out of energy. Then, your company turns into the business equivalent of a hungry, dirty child that’s wide awake watching inappropriate television shows at midnight.
A Little Fairness Goes a Long Way
How many times have you heard your kids whine that something “isn’t fair.” You can give them the “life’s not fair!” response, but it doesn’t satisfy them very well.
Learning to negotiate with kids makes life easier for the whole family.
Take that lesson to work with you every morning. When you treat your employees, business partners, and clients fairly, you can expect better results. A little fairness can lead to advantages like a lower employee turnover rate, increased sales, and more expansion opportunities.
Plus, you’ll grow your reputation as someone that others like to do business with. A good reputation will assist your career in ways you can’t measure.
It’s Not Always About You
A lot of entrepreneurs start businesses because they want to run their own companies as they see fit. No matter how much time you devote to your business, you can’t expect the world to revolve around you and your desires.
You know how you have to put your children’s needs ahead of your own? You have to do the same with your business.
Look for ways to grow your business by offering new services and products. They may not conform to your original vision, but they can help your business thrive.
The next time you feel yourself resist change, ask whether you’re putting yourself ahead of the business. If you are, then you should rethink your attitude.
Entrepreneurs can’t compartmentalize their lives they way that employees do. Every part of your life is connected to other parts. You might as well embrace the situation by using the lessons you learn as a parent to improve your business skills.May 2, 2019
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How Exactly Do You Calculate Your QBI Deduction?
The QBI deduction was one of the hottest topics in tax last year, but not even the most experienced tax advisers could tell you how it worked. That’s because the Treasury Department and IRS didn’t issue the final regulations required to interpret the new tax law until the start of the tax filing season. Now that the regulations are out, here’s how to figure out your deduction.
Figure Your Qualified Business Income
Your qualified business income starts as your share of the profits from a sole proprietorship, partnership, S-corporation or other pass-through entity. It does not include any income you took as W-2 wages from that entity.
The surprise announced in the regulations was that you need to deduct certain items from your qualified business income for the purpose of the QBI deduction. These include:
Once you’ve made those deductions and know your final qualified business income, there are a few other things you need to check.
- The employer’s share of self-employment taxes that you deduct from your adjusted gross income.
- Health insurance plans that you pay as an employer and deduct from your AGI.
- The employer’s portion of your tax-deferred (not Roth) retirement account contributions. Note that you do not deduct contributions designated as employee contributions from your QBI.
Are You a Specified Service Business?
The original law contains vague language including “any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners.” IRS Regulation 1.199A-5(b) removed all doubt by providing a specific list of specified service businesses. They include the following.
These categories are specifically defined in the regulations and aren’t open to interpretation as some accountants originally feared. If you’re not on the list in the regulations, you’re not a specified service business.
- Various financial industry professionals
What’s the Deduction Limit for Your Total Income?
If your total taxable income (including non-business sources) for 2018 was up to $157,500 for a single filer or $315,000 for a joint filer, you got the full 20% no matter your industry.
If your income was above those levels and you’re on the specified service business list, you get a proportionally reduced deduction for income up to $207,500 (single) or $415,000 (joint). For higher incomes, you lose the ability to claim the deduction at all (even on your income up to the cutoff).
If your income was above those levels and you’re not a specified service business, you make two calculations and take the higher amount. These are called the wage and capital limitations.
- 50% of the W-2 wages your business paid.
- 25% of the W-2 wages your business paid plus 2.5% of the unadjusted basis in your business’s tangible, depreciable property. That includes things like a building, vehicle, or equipment.
Your Final AnswerOnce you make the income limitation calculations, you deduct the lower of these three numbers:
- Your reduced deduction based on your income and business type (see above).
- 20% of your original qualified business income.
- 20% of your total taxable income.
What’s Changing for 2020 and Beyond
There are two upcoming changes confirmed for the 2019 tax year returns filed in April of 2020. The first is that the income thresholds for specified service businesses and the wage and capital limitations will increase slightly. They are indexed to inflation and will adjust every year.
The second is that the IRS will create a new Form 8995 to calculate the QBI deduction. You will include this form in your tax return. Currently, you do not file a form or schedule showing your calculations — you only include the final deduction amount on your Form 1040.
The QBI deduction is relatively straightforward now that the IRS has issued a full set of regulations. However, you may need to plan ahead to maximize your deduction. Talk to a qualified tax professional to see if there are ways to structure your income or expenses to increase your deduction.May 2, 2019
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Do You Travel on Business? Here’s What You Need to Know at Tax Time
If your work requires you to travel, you’re probably eager to take full advantage of your right to deduct certain expenses associated with those travels — especially if you’re a small business owner looking for every financial edge you can obtain. The good news is that you can indeed deduct many travel-related expenses; the less-good news is that, but determining the allowable types and amounts can get a bit complicated. Here’s a basic overview of the rules, options, and limitations applied to typical travel expenses, courtesy of our small business loan and merchant cash advance services team.
Mileage and Vehicle Expenses
It makes perfect sense that you should be permitted to deduct at least some of the cost of your vehicle expenses. You can do this by calculating your actual expenses (gas, repairs, automotive wear and tear and so on), but this approach requires you to keep detailed mileage records, receipts and other supporting documentation. You also have the option of taking the standard mileage deduction — usually a much simpler solution. The standard mileage deduction rate for business travel in 2018 was 54.5 cents per mile. You can also deduct parking and toll payments unless you’re already claiming depreciation on the vehicle in question.
If you’re travelling long and far enough to require a rest and a meal, you’re entitled to deduct your meal expenses. As with mileage deductions, you can either deduct the actual (documented) meal expenses or simply deduct 50 percent of a standard per diem rate. Be aware, however, that this per diem rate varies, not just from state to state, but also from city to city. Texas business travelers, for instance, might use a daily rate of $96 in El Paso, $145 in Austin, or $94 in any area that doesn’t have a clearly-stated rate. The entire table of rates is available on the U.S. General Services Administration website.
You can usually deduct your expenses for hotel, motel, or other other lodgings while you’re traveling on business. It’s important to note that these deductions only apply if you’re outside of your tax home (the city or area where you normally conduct business) and the duration of your stay is less than one year. Even if you’re away from your tax home for less than a year, your deduction may be disallowed if your stay was originally planned for a longer or indefinite period.
Business trips inevitably rack up lots of small expenses for countless needs and situations that come up. The IRS recognizes this fact of life, which is why you can deduct such diverse expenses as tips, taxi or bus fare, laundry/dry cleaning bills, local equipment fees, fees for local business services, business-related shipping fees, personal baggage fees, and costs related to business communications.
Don’t Make Assumptions — Ask the Experts
Just as guessing at other critical items on your tax return is asking for trouble, making assumptions about what you can and can’t deduct from your business travels can lead to confusion, leave money on the table, and (worst of all) present the government with a glaringly inaccurate tax return. Take the time to review your travel expenses with your CPA. You’re more likely to get a healthy tax break without reaping a less welcome result — like an audit.May 2, 2019
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4 Snapchat Marketing Hacks for Small Businesses
There’s so much more to digital marketing than Facebook. Snapchat has more than 186 million daily active users — up from 46 million in 2014 — and this social media platform shows no signs of slowing down. No longer is this just a place to post cat memes and viral vids. Now, Snapchat is a killer marketing tool for your small business. Here’s how to use it properly.
1. Target Millennials
Millennials have abandoned Facebook for Snapchat. More than 40 million Snapchat users are 12-24, and a massive 60 percent of people who use this platform are 18-34. Facebook, on the other hand, skews older.
If you want to attract a younger, social-savvy audience to your small business, post regular content on Snapchat. Product announcements, demos, how-to guides — all of this content will resonate with millennials and increase brand visibility.
2. Engage With Your Audience
Engaging with your Snapchat followers will revolutionize your marketing campaigns and lure more people to your product pages. So don’t be a stranger. Comment on other Snaps, ask your followers questions and encourage users to spread the word about your brand. Who knows, you could build a whole new audience interested in your products and services.
3. Post Videos
People love watching videos, and the most successful small businesses know this. Marketers who use video grow revenue 49 percent faster than those who don’t, according to research. Still, only 57 percent of all brand content on Snapchat is video.
“Video lets you show instead of tell,” says All Things Snap. “It will show off your brand’s character more than any character limit or staged photo. It allows you to do things like include music or conduct a 10-second interview.”
4. Use Analytics
Want to find out whether your Snapchat campaigns provide you with a return on your investment? Use analytics to monitor your Snaps and access valuable insights into your followers. As a result, you can find out which content resonates the most with users.
These are just four marketing hacks that prove the power of Snapchat for lead generation and moving customers through your sales funnels. Sure, Facebook might have more users, but this social media platform targets millennials and engages your audience, especially if you use video and analytics.March 19, 2019
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Why Credit Card Fees are a Positive Investment
Depending on your industry and credit card processor, accepting credit cards can cost you two to five percent of every card sale. Many business owners see this number, realize it can add up to thousands of dollars per month, and decide to not take credit cards. The truth is that credit cards have benefits that far outweigh this cost.
Avoiding Lost Sales
About 66 percent of consumers use debit or credit cards when paying for merchandise or services. Many people carry only a small amount of cash, and 16 percent don’t carry cash at all. If they know a business is cash-only, they may decide to skip it instead of heading to an ATM. Taking cards ensures you don’t lose customers because they perceive shopping with you as inconvenient.
Consumers paying with credit cards spend an average of 12 to 18 percent more than those paying with cash. This is due to a number of reasons including the psychological impact of having to hand over physical cash as well as consumers not having to worry about if they have enough cash on them.
In short, you aren’t choosing between getting $100 cash or $97 after credit card fees. You’re choosing between $100 cash or $115 with a credit card.
Swiping a credit card takes less time than a customer counting their pennies and a cashier making change. This helps you get customers through the line faster increasing their satisfaction and reducing the chance of people leaving because the wait is too long.
Make Your Accounting EasierWith credit cards, there’s no more worrying about cashier errors, counting cash at the end of the night, or reconciling bank accounts. Credit card sales allow your accounting to be almost completely automated as every step of each transaction is recorded electronically.
Accept Payment Plans Without Risk
If you sell more expensive items or services, your customers may ask about payment plans. If you choose to offer a payment plan on your own, you will spend time and money trying to collect and likely still end up with people defaulting.
By taking credit cards, your customers get more time to pay, and you still get paid in full within a day or two. Even if someone doesn’t pay their credit card bill, you still get paid in full because the credit card company takes on all the risk.March 19, 2019
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Is it Still Possible for Small Businesses to Stand Out on Search?
Even just a few years ago, it was often easy for small businesses to rank highly in searches with just a little SEO work. Today, so many businesses are focusing on SEO that there just isn’t room for all of them — especially when the giant chain companies always seem to find their way to the top. Fortunately, there are still ways for small businesses to separate themselves from the pack.
Tailor to Your Market
The reason giant chains often rank first is because their national fame gives them a strong online presence. However, their websites often take a cookie cutter approach with little local information. Even many small businesses contract an SEO firm that doesn’t really know the local market.
This creates a hole where you can target your information to specific local neighborhoods, tastes, events, and needs. It will also help to show your customers who want to shop local how you’re connected to the local community.
Be Active in the Community
Be active in the community by participating in local events and sponsoring causes you support. In addition to building your offline reputation, this will help you to appear in social media, press releases, and local websites.
You may have heard that buying links is bad, but that’s when you’re simply paying someone to add a link somewhere. If you’re actually involved in your community and receive a link in return, it will still help your organic search rankings even if your motive was marketing.
Ask Your Customers to Leave a Review
Reviews are an increasingly important factor in search marketing. In addition to helping search engines see that you’re a real, active business, many search results now include a box with customer reviews instead of just a list of links.
Asking your customers to leave a review can help you build up your presence faster. Don’t worry about getting bad reviews. They will be drowned out by the good ones as long as you correct any legitimate customer concerns. In addition, a bad review gives you a chance to publicly show your strong customer service and willingness to make things right when something goes wrong.March 19, 2019
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Inbound Recruiting: The New Way to Secure Qualified Talent
Inbound recruiting has become a highly effective method of sourcing potential job candidates. In fact, it is quickly replacing traditional outbound ways of growing qualified talent pools. The concept of inbound recruitment methodologies are simple – attract and source the right candidates, convert their interest, and build brand credibility.
Here are some simple ways you can deploy inbound recruitment strategies in your own organization.
Attracting and Sourcing
Your ability to attract prospective employees shouldn’t begin and end with your company’s job posting on an employment board. Rather, efforts should be taken before this step to create a funnel of interest around your organization itself. This begins by humanizing your brand and defining your company culture on your website, social networks, and career pages. To attract the right candidates, you need to showcase what makes your company special. Make your audience jump at the opportunity to work for your company.
Converting interest into a job application is the next stage of the inbound recruitment process. You accomplish this through a variety of mediums. Strategic calls to action on company career pages are a great place to start. Keyword-optimized job listings and a balance of both content-rich and creative elements are also great ways to showcase what life is like working at your organization. Makes it easy for candidates to apply to your organization on their mobile phones, through their social media accounts, and on their favorite job boards.
Engaging and Building Credibility
Whether you hire a particular candidate or not, growing your talent pool over time requires regular engagement. The candidate’s interview and hiring experience can play a major role in the overall credibility of your company and can impact your ability to find qualified talent down the road. Using surveys to help streamline your hiring practices will encourage long-term brand loyalty. This will help your talent pool sustain interest in your organization and significantly increase the likelihood of employee referrals.
Inbound recruiting continues to be an effective way of sourcing qualified talent pools and maintaining them over time. By incorporating these basic strategies to attract new candidates and covert their interest, you can streamline your hiring practices and significantly reduce the time it takes to find your next new hire.March 11, 2019
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How to Prevent Fraud Against Your Small Business
Fraud against small businesses occurs frequently and in many forms. According to surveys 28 percent of small businesses experience fraud every year. A few examples include shipping scams, chargeback fraud, phishing emails and invoice fraud. Learn to identify some common forms of customer, vendor and third-party fraud and identify steps the small business can take to prevent.
Common scams involve shipping. Several variations exist, including the following.
- The scammer requests you use their shipping account because they can get a discount, service is more reliable, etc. If you agree and use the requester’s shipping account, they easily can contact the shipper and reroute the order to another address. The buyer then asks for a refund because they did not receive the order. Unable to prove that the buyer received the order, you lose the product, the shipping costs and your money. How to prevent this scam: Only use your shipping account. If a customer asks you to use their shipping service, review the order carefully. Ship to the address on the order.
- A buyer places an order with an incorrect or fake shipping address. When the shipping company is unable to deliver the package, the buyer contacts your shipping company and asks they send the package to the correct address. The buyer then files a complaint for not receiving the item. The buyer keeps the item and money. How to prevent this scam: Contact your shipping company to block buyers from rerouting. Validate the address before shipping. Only ship to the address on the order.
The term “chargeback” refers to the return of funds to a customer that is initiated by the issuing bank at the customer’s request. Fraudulent chargebacks involve a customer paying for goods or services via credit card and then requesting a chargeback, despite receiving the goods or services. They also might falsely claim the purchase was not authorized. How to prevent this scam: Use a secure ecommerce platform and a reputable payment processor that havs seller protection and fraud detection features in place, such as address verification services (AVS).
The fraudster submits professional-looking Invoices for payment for goods not provided or services not rendered. This scam may involve accomplice staff or not.
How to Prevent Scams
An educated workforce is the best prevention measure. Train staff to spot possible scams. Teach them not to share information externally and not to click on unknown links. A good resource is the FTC’s dedicated site and materials (https://www.ftc.gov/tips-advice/business-center/guidance/scams-your-small-business-guide-business).
Verify all invoices before payment. Implement clear processes for accounts payable. Review invoices carefully and be sure the goods or services were received.
How to Spot Scams
Learn to recognize some of the common telltale signs of scammers:
- They pretend to be someone you trust or associated with someone trustworthy, like a government agency.
- Scammers express a sense of urgency, rushing you into making a quick decision.
- Scammers use intimidation, preying on fear. For example, they warn of some impending crisis such as a website domain expiration.
- Scammers use untraceable payment methods.
Of course there are many more types of scams and forms of fraud committed by employees as well as strangers. Remain vigilant and don’t hesitate to question.March 1, 2019
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SEO for Small Businesses: Why Local Search Matters
Search engine optimization (SEO) is a critical skill for all small business owners to master. Optimized content can increase traffic to your website, resulting in higher sales and therefore higher revenue for your small business. Thanks to updates to the Google algorithm over the past few years, local SEO is becoming increasingly important for all small companies. Here are a couple of tips you can use to make local SEO work for your business.
Use Local Keywords to Get the Traffic You Want
Some visitors to your website are more useful than others. If your business is tied to a particular location, for example if you have a brick-and-mortar store or you provide services in people’s homes, you want to attract local people to your website. The best way to do this is to use local keywords, which include your town, city, or region as well as a word or phrase related to your business. An example is “dentist in Manhattan.”
You can find suitable local keywords for your SEO strategy using this tool from Google. Look for keywords that have higher search volumes and lower competition. Use these keywords in the content on your small business website to attract local searchers.
Use Listing Sites so Local People Can Find You
The next step to turbo-charging your local SEO strategy is to add your business to Yelp, TripAdvisor, Google Places, and any other listing sites that are popular in your area. Keep your profiles on these sites updated with your current opening hours, website URL, and a brief description of the services you can offer.
You will soon notice that your customers start to leave reviews of your business on listing sites. These reviews will help to make your business more visible in search engine results pages and also help your business to seem more authentic and trustworthy. Always respond professionally and politely to negative reviews, offering a solution to resolve any issues that customers bring up.
Keep It Up
A good local SEO strategy requires ongoing action. Keep publishing fresh, keyword-rich content and checking on your business listings regularly to keep your website at the top of local search results.January 29, 2019
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How Should Your Small Business Record Its Income and Expenses?
As a small business owner, you are undoubtedly looking for the smartest, cleanest, simplest ways to track your business’s financials, from your monthly balance to the number of payments on your books. But just as each kind of business offers different products and services to different target markets, there’s no one cut-and-dried way to record business income and expenses. There are however, two primary methods worth considering — cash accounting and accrual accounting. Let’s take a look at each of these methods and the distinct advantages and challenges they offer to small businesses like yours.
Cash Accounting vs. Accrual Accounting
The main difference between cash accounting and accrual accounting lies in when you record the entrance and exit of money. For instance, you might receive a request for $10,000 in products or services. You accept the request, bill for the job, perform the job, and then receive payment for the job the following month. Here’s how you would handle that scenario in both accounting systems:
- Cash accounting – In the cash accounting method, you would wait until that $10,000 actually hit your bank account. If you were the one making the $10,000 payment to another business, you would wait until you’d actually transferred those funds to record that expense. Cash accounting therefore provides you with a real-world “snapshot” of exactly how your finances stand at any given time.
- Accrual accounting – In the accrual accounting method, you would record that $10,000 as income in the month that the payer agrees to the sale — not the next month, when the money actually appears. This same principle applies to recording expenses. As you incur expenses, you go ahead record them as such on your books even if you haven’t made any payments yet.
Different Methods for Different Priorities
On the surface, this “before vs. after” difference seems straightforward enough. But each approach has different potential implications for your small business’s financial well being. The method you choose affects your:
- Cash-on-hand knowledge – The accrual method is based in part on income you don’t yet have and expenses you haven’t yet paid. It’s not very good at showing your precise current financial situation. This uncertainty can lead you to make dangerous financial errors if you’re not extremely careful.
- Big-picture viewpoint – The cash method gives you a crystal-clear perspective on your current fiscal health, but it does little to bring you the bigger picture of how your fiscal year is working out. This makes meaningful projections difficult, and it might limit your ability to qualify for a small business loan.
- Cash flow tracking – Your reported cash flow can vary wildly depending on which accounting method you use. In the accrual system, for instance, your cash flow will be reduced by any incoming bills you receive from the moment you receive them, even if you won’t be paying those bills until the following month. By contrast, the cash method will show you as being up by $10,000 with no reductions from those incoming bills.
- Taxes – Accrual accounting can give you easier control over your tax burden than cash accounting. If your year is shaping up as a high-income year, saving some of your outgoing invoices for the next year can make your books appear leaner for the current year (or vice-versa). Under the cash accounting method, you would want revenues to arrive at your company during a lower-income year if possible, instead of tacking that revenue onto a higher-paying year. But controlling your revenue on paper is easer than ensuring your payers’ behavior.
As you can see, both systems have their pros and cons, and there’s no right or wrong choice. You may want to ask your accountant about the use of a hybrid method that combines the best of both systems. One way or the other, you can find a system that makes the most sense for your small business.January 23, 2019
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Use Contractors to Lower Business Overhead
Maintaining a large employee base can be prohibitively expensive. Providing them with space, equipment and benefits, as well as paying their payroll taxes, can easily equal or exceed their compensation. Although there are times when having an employee on-site is essential to the requirements of the job, many tasks, projects, and even positions can easily be filled with contractors who do the same job with little to no overhead expense. Here are some ideas that could help your business save several thousands of dollars each year.
Using Contractors for Specific, On-Going Tasks
Take the job descriptions of all your employees and combine them into one massive document. Next, separate out all stand-alone tasks. Stand-alone tasks are those that do not require knowledge of other areas of the business or depend on the completion or timing of other tasks. As an example, one such task might be bookkeeping. It may be more cost-effective for you to contract out your bookkeeping services than have them completed in-house by someone who requires office space, equipment, and benefits. Overall, this reassignment of tasks could save you the overhead expenses associated with a few full-time employees.
Using Contractors for Special Projects
When special, one-off projects come up in a business, it often results in chaos. With a limited number of employees to share the load, many other important things can go left undone. Because some employees are likely non-exempt, overtime costs due to special projects could also be significant. Hiring a contractor for a limited time, specific to each project, can save thousands of dollars a year. These contractors should have access to your employees for information and support but will basically complete all their work on their own, outside of the office.
Using Contractors for Permanent Positions
In many businesses there are full-time positions that lend themselves well to completing outside the office. For example, insurance companies often contract out their claims processing. Some even contract out their sales function, and if the compensation is commission-based, you only pay for results.
The Human Resource Benefits of Using Contractors
Since independent contractors are not employees, you don’t have to deal with all the same procedural requirements that you do with an employee. For instance, attendance is not an issue. If they don’t fulfill their duties in the time required, they are in breach of contract and you can end the relationship. If you’ve hired them to do sales or other jobs with measurable output, it’s easy to get rid of poor performers. In general, you don’t have to worry about documenting performance, Performance Improvement Plans (PIPs), or other company policies related to coaching, counseling or terminating an employee.
Downside of Using Contractors
Although most of the outcomes of using contractors are positive, there is one obvious downside – you do lose a little control. If you tend to be a micro-manager who is very hands on, then using contractors is probably not a good fit for you. The positive spin on that is, using a contractor might help you learn to loosen the reigns and delegate a bit more, which is probably something you need to do anyway.
Using contractors can be a great way for businesses to lower overhead expenses and save money. If you’re hesitant about taking that plunge, you can start slowly by contracting out a small piece of your workload, like a special, short-term project. Be sure to consult with your human resources manager and/or your attorney to work out the details before getting started.January 15, 2019
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Top 5 Accounting Tools for Professionals & Small Businesses
If you dread doing the bookkeeping for your small business, you’re not alone. Half of all small business owners cite accounting as being what they dread the most. Whether it’s disdain for the tedium of accounting or aversion to math, avoiding your bookkeeping can be detrimental or even catastrophic.
Accounting is how you stay abreast of your expenses, taxes, payroll, a small business loan, and other points of financial data. Further, unless you consider yourself a math and business finance prodigy, these vast swaths of data aren’t the sorts of things you can track in your head. That’s where a great accounting tool comes into the equation.
Instead of keeping track of your business finances by hand, a great accounting tool can streamline all your financial data while minimizing mistakes. If you want real staying power as a professional in your industry, getting a firm grasp on your business bookkeeping is essential, and using a great accounting tool is how you can do it.
Here are five accounting tools that are particularly great for professionals, entrepreneurs, and small business owners.
Since it was overhauled in 2017, FreshBooks has been commended by both critics and users. In fact, FreshBooks was recently awarded an Editor’s Choice award by PC Magazine with the review citing the outstanding user interface, robust collaboration tools, and contextual awareness as a few of the program’s strengths.
FreshBooks excels at invoicing and managing subscriptions, making it as valuable for freelancers as professionals and small business owners. However, FreshBooks isn’t viable for larger companies with diverse product offerings or lots of SKUs on file because it lacks any real inventory-tracking system or product records.
Starting at $15 per month for the FreshBooks Lite plan, FreshBooks continues to be a popular option for smaller-scale operations needing a capable, user-friendly accounting tool.
XeroAccording to the review published in Inc., Xero offers “some of the best small business accounting software in the game.” In fact, Xero’s strengths are clear from the very first moment you use the software with the easy-to-use setup wizard built right into the program.Though often compared favorable to accounting mainstay QuickBooks Online (which also appears on this list), Xero is unique for offering a double-entry system. In other words, transactions and other records entered into the software are reflected in other data; for example, if you receive a Merchant cash advance and input the advance into Xero, your Loans Payable value will increase. So using Xero gets you easy access to straightforward, actionable snapshots of financial data.With the Basic version available for just $9 per month, Xero offers a double-entry system and great invoicing features for a very low cost.QuickBooks OnlineAs the incumbent leader on this list, QuickBooks Online has the advantage of its 35-year reputation for excellence, backed by the Intuit name. In fact, even people who have never used or touched account software before are at least familiar with the QuickBooks name.
Intuit — which also manages TurboTax — has put over three decades of wisdom to good use: QuickBooks Online exhibits a deep understanding of what users want, especially with a polished, aesthetically-pleasing user interface. Additionally, there’s an array of useful integrations with software and services you probably already use. These integrations include first-party applications made by Intuit and such third-party applications as PayPal, Bill.com, Zoho Expense, Veem, and Shopify.
QuickBooks Online also offers some of the most extensive reporting options in the industry. Again, over three decades of experience in business accounting means QuickBooks Online knows what users want and need.
The main drawback to QuickBooks Online is that you might pay a bit more for their expertise. The basic QuickBooks Online plan — called Simple Start — costs $10 per month. But it only offers access to basic features that may not be enough for a small business. If you need integrated payroll, inventory tracking, multiple users, project tracking, or integrated tax preparation, you’ll have to either pay for add-on features or upgrade your plan.Zoho BooksThough not as ubiquitous as QuickBooks, Zoho might be familiar to you if you’ve used one of the company’s many software tools. Until recently, Zoho was known for its own web-based suite of Microsoft Office alternatives. As the company built a portfolio of other software options, Zoho Books emerged as a capable accounting tool in its own right.Arguably the greatest strength of Zoho Books is that it offers many of the same features as its competitors for a low cost. Even the most basic Zoho Books subscription gives you such features as creating and managing timesheets, project management, expense tracking, automating up to five workflows, and robust invoicing.There aren’t many drawbacks to Zoho Books, but the shortcomings most often cited are the lack of any payroll integration and report customization options. Otherwise, most professionals, entrepreneurs, and small business owners have praised Zoho Books and its starting subscription price of $9 per month for the Basic plan.WaveMost accounting tools offer a free trial, but Wave undercuts the competition by giving most of its features completely for free. However, putting its $0 cost to the side for a moment, Wave is still a very capable accounting tool for small businesses.With subjectively one of the cleanest and most user-friendly interfaces, Wave offers a rare double-entry system bolstered by an array of reporting and analysis features that are never more than a couple clicks away.Fortunately, Wave’s limitations are really only relevant to larger businesses and companies. For example, Wave lacks in-depth inventory management options, but freelancers, professionals, and small businesses have a lot to gain from Wave’s robust expense tracking as well as the invoice and transaction management.There’s no right or wrong answer when choosing the right accounting tool for your small business. The tool that works best for one professional or small business owner may not offer the right combination of features or capabilities for another.Whether you choose Wave or Xero, QuickBooks or FreshBooks, or even some other accounting tool, ultimately, the purpose of these tools is to ease the burden of accounting. So instead of dreading it, embrace your bookkeeping by letting a great accounting tool be the key to your success.January 9, 2019
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5 Tech Trends That Will Define the Finance Industry in 2019
The world of technology is an ever-changing one that brings new concepts to life each year. In 2019, there are several existing technologies which are expected to make their way into the notoriously traditional world of finance. Explore the top 5 tech trends that will define this industry in the new year:
1. Internet of Things (IoT)
The Internet of Things (IoT) is a term that gets thrown around a lot in the tech industry but it is actually proving to be useful in the finances as well. While it seems odd that a realm which centers on intangible concepts would utilize a network of tangible, connected things, financial institutions have found success in using IoT in fraud prevention, debt collection, creating personalized offers and optimized capacity management. In the new year, expect to witness this technology in full swing at ATM’s and point-of-sale devices.
2. AI/Machine Learning
Artificial Intelligence or Machine Learning can provide an immense level of value in the financial realm when implemented properly. This year, financial institutes will gravitate towards using AI/Machine Learning to reduce repetitive tasks and improve their overall level of productivity. For instance, automated paperwork, employee training, financial monitoring/fraud detection and enhanced security. While many financial organizations have already begun the process of utilizing such technologies, they will become more prevalent with improved accuracy.
In 2019, the focus on blockchain technology will continue to grow and increase in popularity. As the technology behind innovative cryptocurrencies such as Bitcoin, Litecoin, Ripple and Ethereum, this does not come as a surprise. In 2013, Bitcoin first entered the market with a value of around $13 per share. Reaching an average value of around $15,000 per share after only five years, however, it has become apparent that blockchain technology warrants attention. Certainly, this technology is still rather infantile and subject to market volatility, but the world is starting to understand the significant impact that blockchain technology will have on the economy in the years to come.
4. Virtual Reality
In a world full of millennials, Virtual Reality is naturally finding its space in the financial industry. This is especially useful as non-traditional banks are on the rise. With VR, banks and financial service providers can create a more engaging experience for users. This also aids in improving the users understanding of more complex financial matters, like starting a family trust or securing a mortgage loan. Having an interactive element ensures that users have access to the information that they need when they may otherwise opt to forgo traditional counseling at a brick and mortar location. For the business itself, it improves productivity and aids in establishing trust with the clients.
Excellent customer service is crucial for banks and other financial institutions. Clients with concerns can become distraught and even panicked if they detect fraud or otherwise have a concern regarding their finances. Using chatbots, financial institutions can put their clients at ease and this is a concept that they are starting to understand in recent years. Although clients will not reach a live person through a chatbot, they do receive an instant response which provides a sense of comfort. Whether they reach the chatbot after hours or on a holiday, the basic information provided may be all the help that a client needs. For instance, if a customer cannot remember their login information for online banking- the chatbot can direct them in the right direction on how to reset their password. In these cases, the problem will be resolved without the client having to wait for regular business hours. This eliminates the level of frustrated clients and gives an overall more thorough customer service experience. Likewise, it can allow the company to determine any areas of concern that are prevalent among their clients.
While many of these technologies have already become prominent in other industries, the key of 2019 will be implementing them into this industry in a more secure and effective manner.January 2, 2019
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Move Your Small Business toward Environmental Friendliness
The prospect of your small business going green can be daunting. For example, you may envision solar panels, paper bans and vegetable gardens out back. Of course, there’s nothing wrong with these ideas. The idea of growing your own corn and potatoes for lunch at work does hold a certain appeal. However, it’s best to move your company toward environmental friendliness starting with small steps rather than cannonballing into it.
Here are some simple but effective ideas to kick off your company going green. Pick and choose as you like.
- Offer incentives for employees to walk, bike, carpool or take public transportation
- Open new offices, branches or locations in areas designed for environmentally friendly commutes
- Donate your appliances, furniture, computers and electronics and the like to Habitat for Humanity, schools and charities instead of sending them to the landfill
- Purchase used furniture instead of new pieces
- Develop a policy that lets employees telecommute from home when feasible
- Ask employees to turn off lights in vacant offices, or install timers and motion sensors
- Use Energy-star-rated lightbulbs and fixtures
- Purchase refillable water bottles and reusable cups for employees (to cut down on single-use products)
- Use video conferencing, cloud computing and other systems to cut down on business travel and paper usage
- Purchase energy-efficient appliances when it comes time to replace refrigerators, microwaves and the like
- Contract with “green” caterers for events
- Choose an environmental cause to champion for a fundraiser
- Give rewards such as gift certificates to local sporting goods stores
- Look for green 401(k) options when revisiting your retirement plans
Of course, employee buy-in is critical, and it’s necessary to explain the rationale behind any moves you make. For instance, if you send an email saying, “We need to start turning lights off in rooms we’re not using,” with no further explanation, then that could make the business sound miserly or even like it’s in financial trouble.
Choose a handful of simple “green” ideas to start with, and roll them out to employees. You increase the chances of employees participating enthusiastically if they have a say in choosing the approaches that the company starts with (via a committee, for example).
As your new practices gain momentum, build onto them where possible and tout your progress on your website and in recruiting materials. An environmentally friendly company is hard to resist!December 18, 2018
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2018 Small Business Saturday Survival Guide
Small Business Saturday is this Saturday, November 24th. Are you ready? This annual event is growing in popularity. Ensure you take advantage of every opportunity to sell to and connect with your customer base with these valuable tips.
1. Do Your Customer Research
Understanding your customers and their shopping habits will help you be more responsive to their needs. This adds value to their shopping experience and maximizes selling opportunities. Know your demographics, how they purchase and how much they plan to spend during the holiday season. For example, a 2016 study revealed that half of U.S. consumers who shop local businesses do so in support of the Buy Local movement.
2. Optimize Your Website for Mobile Users
Convenience is a driving factor for many consumers. Research shows that holiday shoppers will use their smartphones to place 46% of all orders. And when shoppers between 18 and 44 are in your store, 83% of them are still using their smartphones. Ensure your website captures sales from these users on Small Business Saturday and throughout the holiday season.
3. Embrace Mobile Payment Options
Mobile is about more than shopping – it’s also how many consumers choose to pay for their purchases, even in-store. 24% of young consumers are prepared to use mobile payments when shopping in brick-and-mortar stores this holiday season. This option also speeds up the POP experience, which supports more sales.
4. Support a Local Charity/Cause
Local charities and causes can use your support, and aligning your business with area non-profits is an excellent way to build your brand and establish relationships with the people in your community. The holiday season is optimum for launching or expanding on these efforts.
5. Use Social Media
Your social media platforms can you help you get the word out on your plans for Small Business Saturday promotions and specials. Ad buys are one option, but you can also spread your message to followers with simple posts and updates. Clever advertising may even earn you some retweets and shares.
6. Deliver on the In-Person Shopping Experience
Your brick-and-mortar store has a big advantage over eCommerce – the physical experience. Shoppers can touch, try-on, try-out and engage with your products. Make the most of that.
7. Offer In-Store Pickup
The holidays are a busy season. Some of your target customers won’t have the time to come shop in your store on Small Business Saturday. But they can still take advantage of your sales and specials if you give them an in-store pick-up option. This ties in with #2 – mobile shopping. It’s also another opportunity to show your customers that you’re responsive to their needs.
8. Advertise Wisely
Make the most of this big day with targeted advertising. Highlight Small Business Saturday in your ads and appeal to consumer desire to support small businesses and local shops. Don’t forget social media — these hashtags can help on Twitter, Facebook and Instagram: #SmallBusinessSaturday, #SmallBizSat, #ShopSmall, #DineSmall.
9. Reward Loyal Customers
Send emails to your established customers offering them special deals or discounts for supporting your business or add the offer to current shoppers on their sales receipts. Don’t make it contingent on shopping in your establishment on Small Business Saturday. It’s a reward for patronizing your business. Extend the offer a week out past that Saturday.
10. Prep Your Sales Team
Make sure your customers have an enjoyable shopping experience – give your sales staff the tools they need to provide exemplary customer service. Hold a special meeting to educate your team about the products you’re highlighting and any promotions you’re offering. Encourage questions and feedback to maximize the effectiveness of this exercise, and staff appropriately on the big day.
11. Partner with Other Businesses
Small Business Saturday is your chance to support local businesses, too. Considering teaming up with other area stores or service providers to offer your customers extra value and give them even more reason to purchase locally.
12. Create Special-Edition Packages
Commemorate this day with unique offerings tailored to your customer base. Put together special packages of your products or services that provide added value. This is a chance to show established customers and prospective buyers what makes your business special.
13. Get Organized
Don’t forget the logistics. It’s fun to brainstorm and create specials and ads for this small business extravaganza. But, preparation, organization and dedication are key to the success of any of your efforts this month. Get back to the basics. Identify your goals. Outline your strategies and make lists for the tasks you need to complete to be successful.
14. Remember Foot Traffic
With all the emphasis on mobile use and internet shopping, it’s easy to forget offline consumers. They exist, and you can attract them with flyers and posters to inform shoppers in your community of your products, services and unique offerings. Creative window displays can bring customers in the door, too. Tap your staff to design these displays – they know your customers best.
15. Connect Your Online and Brick-and-Mortar Presence
This holiday sales event is meant to help small businesses both on and offline. It’s a mobile world, and a lot of retail sales are now conducted online. Don’t leave money on the table by ignoring your online presence – but be sure to present a cohesive shopping experience by connecting your physical offerings with your online promotions. Don’t forget your social media platforms. Stock appropriately.
Small Business Saturday is about more than increasing your sales during the holiday season. It’s a valuable opportunity to build customer loyalty that will hold you in good stead year-round. Keep that in mind while planning your sales strategies this November. How can you make this the best experience possible for your customers?November 20, 2018
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Hiring Through Facebook: How to Use Facebook Job Postings Effectively
Early in 2017, Facebook introduced a new job posting feature in the US and Canada that would expand to 40 countries worldwide in February of 2018. Since then, more and more businesses have turned to Facebook as a platform for finding new employees. Like any hiring platform, though, it’s important to use Facebook correctly if you want to see great results from it. Here’s what you need to know to use Facebook job posts to effectively recruit new employees.
What Kind of Jobs Are Best Posted on Facebook?
Although businesses of all sorts can advertise their open positions through Facebook job postings, the platform is best suited to small businesses looking for lower-skilled workers. For white collar, professional positions, LinkedIn is generally a more suitable platform. In the case of workers with a blue collar background, however, Facebook is an excellent tool for hiring.
Best Practices for Creating Facebook Job Listings
The most important part of creating a successful Facebook job listing is targeting the post to the right audience. Facebook’s internal targeting features make it extremely easy to show your job posting to the target demographics who will be most interested in it. Ideally, you should target your job post to people living in your local area who have interests related to your business niche. With a bit of simple targeting, you can make sure that your job post is shown to people who fit the mold of your ideal candidate for the position.
When posting a job on Facebook, it’s also worthwhile to make it appealing to the people who already like your business’ page. Facebook users who follow your posts and interact with your page are usually prospective customers, but they can also be good candidates for your open jobs. Try to structure your job post in a similar way to your usual marketing posts so as to target the people who are already engaging with your brand in their capacity as customers.
Finally, it’s important to discuss more than just the position you are posting for. Highlight your company’s culture and the opportunities prospective employees may have for future career advancement within your organization. By showing workers a positive view of your company and the opportunities it will give them, you can encourage them to apply and make it more likely that you’ll attract well-qualified candidates with the skills and experience you need.
Used correctly, Facebook job postings can be a powerful tool for businesses looking to bring on new employees. If your business is searching for extra manpower, consider posting your next job on Facebook.November 14, 2018
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Poor Personal Finance Habits that Keep Average Americans in Debt
Americans are in a lot of debt, to the tune of $4 trillion, projected by the end of this year. This consumer debt represents student loans, auto loans, personal loans and credit cards. When you look at the population and this non-mortgage debt, the average American owes more than a quarter of their income to their borrowing. And even more alarming, is the fact that this type of debt has increased more than 38% over the past five years. Bad personal financial habits are contributing to this uptick.
Failing to live on a budget is one of the most common mistakes you can make. But without this essential financial tool, you’ll keep making all the other mistakes that lead down the path to overwhelming debt. A budget is a simple tool that identifies how much money is coming in and what bills and expenses need to be paid so you can determine how much should be going out. A budget also allows you to set up two other tools many consumers are mistakenly ignoring – emergency funds and savings.
Lack of an Emergency Fund
Emergencies happen – it’s inevitable. How you prepare for these emergencies determines the impact an they will have on your finances and your debt. Most Americans don’t have an emergency fund that’s separate from their savings. Rectify that for yourself by building up an emergency fund that’s equal to or greater than three months of living expenses. This monthly amount should include your basics, like rent/mortgage, utilities, food, and transportation expenses.
Making Savings Optional
Many Americans fail to make savings a priority. They pay their bills, pat themselves on the back for taking care of their expenses and then proceed to blow the rest of their income on things they don’t really need. Break the cycle and pay yourself first by depositing a set percentage of your income in a savings account or CD. See how helpful a budget is?
Caviar Habits on a Hotdog Budget
Just because you want something, doesn’t mean you have to have it, and it certainly doesn’t mean you need it. Living within your means is the single best way to stay out of debt. Basically, that means you spend what you earn and not a penny more. Granted, if it were that simple, consumer debt wouldn’t be careening to $4 trillion. But, you can take steps to minimize outlandish spending that doesn’t befit your income. The next bad habit helps address that issue.
Relying Too Heavily on Credit Cards
Credit cards aren’t free money. They’re not a pass to spend what you don’t have in your bank account and they’re not the solution to keeping up with your neighbors and in-laws. Stop using them like they’re a golden ticket. Some people have the discipline to reap rewards in points and cash rebates with smart, responsible use. Others keep an emergency card on hand for unexpected situations where the convenience of a card can be of some help. Keep in mind that an emergency fund is still the best option. If you don’t possess this discipline, pay off your cards and get rid of them.
Debt and the Small Business Owner
Small business owners are average Americans who had the heart, courage and motivation to pursue their dream of entrepreneurship. And for that, you should be commended. But as a small business owner, you’re likely aware of the need for capital to launch, run and grow your business. Excessive debt can sink your chances of obtaining the funding your business requires to succeed.
For sole proprietors, your personal credit plays an integral role in the ability to obtain business credit. Even if you’re paying your bills and doing it on time, a high debt-to-income ratio can ding your FICO score and ruin your chances of getting the credit approval your business needs. To overcome this issue, address any destructive personal financial habits that are driving up your debt and obstructing your ability to attain your goals in the business world.November 8, 2018
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Red Flags for Hiring Managers to Consider
Picking the right candidate is like choosing a piece of fruit. The outer shell indicates what the flesh will be like. In employment, the stakes are higher than tossing a rotten apple in the trash. For business owners, every position is crucial to the company’s growth and development. One mistake can cost an enterprise anywhere from five to seven figures, because of replacement and retraining expenses. This makes each search vital to business success. Here are three red flags to look for while interviewing candidates.
Hire a candidate with a good track record and a positive outlook. His or her past performance is a hint of future success or failure. Most people repeat the same behavior every year. If a hiring manager listens carefully during the interview, he may find that the candidate gives important clues about his or her work ethic. A bad experience with a previous employer, may indicate that the candidate will have a similar interaction with your firm. Likewise, if the candidate’s resume shows him moving between jobs every two years, don’t expect that he’ll stay with your firm for a decade.
Positive words about previous co-workers are an indication that the candidate appreciates his experiences. Alternatively, if a candidate says that the previous employer prevented him from receiving unemployment, it’s likely you’ll convince the unemployment office to side with your firm at the end of this employee’s tenure, if you hire him. A candidate who recounts negativity may draw the same experiences in your workplace.
That doesn’t mean that every candidate will have a sunshine disposition. You have to determine which personalities fit with your company culture. Certainly, some hard-edged employees successfully accomplish quite a bit of work.
Body language may help an interviewer interpret the candidate’s personality, if he analyzes visual cues, such as slouching or leaning in the chair . This may indicate a lazy personality. Candidates who sit up straight and hold eye contact are more likely to work diligently.
Without training, most employees will continue to repeat critical words, challenging experiences, and bad behaviors. However, companies that have in-depth training programs may offer workers with the right talent and experience a chance to improve habits.October 23, 2018
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The Importance of Exit Interviews
Nobody looks forward to an exit interview. After all, if you’re conducting one at all it’s because an employee is moving on! Exit interviews are, however, extremely important, and can be valuable to both you and your departing employee if handled correctly. Here are just a few reasons why exit interviews matter…
1. They give you insight into your company
If there are problems within your company that have lead to your employee deciding to leave, this is your opportunity to find out as much as you can about them. An employee who is on their way out is much more likely to be honest and up-front about any issues. Be straightforward and ask them if there’s anything they would change. Their answer could help you improve employee retention, and save a great deal of money.
2. They give you insight into competitors
While compensation and employee benefits aren’t the biggest factors in employees deciding to leave, they are still very significant, with 22% of employees citing pay and benefits as a reason for leaving a role. If an employee has been offered a position elsewhere, the exit interview is a golden opportunity to gather information about the compensation strategies of your competitors – information that could be invaluable next time you seek to hire.
3. They make employees feel valued
Taking a moment to sit down with an employee and ask for their opinions about the company makes them feel valued and listened to, particularly if you’re willing to act on what you hear. In some cases this could be the difference between an employee leaving feeling bitter and angry, and one leaving singing the praises of your company.
The perfect exit interview
With the above points in mind it’s clear that exit interviews are important, but that doesn’t mean they’re easy. You may have to ask specific questions in order to get the most valuable feedback and identify areas where your company could improve. Consider asking specifically about their feelings towards management, as well as what they liked the most and least about working at your company.
Don’t forget to make notes of what any employee leaving the company says. Not only does this show that you’re listening, but it also allows you to identify patterns in employee behavior, and zoom in on problem areas.
Finally, don’t forget to think about the tone of your meeting. If your employee is moving on because of an opportunity elsewhere, congratulate them! Make sure they know the work they did with you is valued. By ending things on a positive note you stand to create an ambassador for your company, whatever their reason for leaving.October 23, 2018
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Year-end Closing Checklist for Small Businesses
This checklist reviews several actions most small- to medium-sized businesses need to take to close out the books and prepare for tax filings.
Review Past-Due Receivables
Check significant past due receivables and determine whether you think customers will eventually pay. You might choose to send past due bills to a collection agency or decide to write them off for a deduction. Leaving large, uncollectible receivables on your books falsely inflates your balance sheet.
Review Credit Balances
Credit balances, which can result from uncashed checks or refunds not issued or claimed, should be reviewed and resolved where possible. Businesses holding unclaimed property owed to an individual or entity must report to the state where the recipient resides. These escheatment laws vary by state, though all require annual reporting of unclaimed property.
Review Your Inventory
If your business involves selling of goods, then you should review your current inventory to determine the value of items not sold. Remove any unsellable inventory to avoid overstating your inventory balance and paying extra taxes that you do not owe.
Prepare W-2 and 1099 Forms
By January 31 you must report to the Internal Revenue Service and people who worked for you the annual earnings of your employees using Form W-2. A 1099-MISC form must be provided for independent contractors and vendors who earned $600 or more in the year. If you have not already done so, gather Form W-9 from these vendors to facilitate completion of the required 1099 forms.
Consult With Your Tax Advisor
The Tax Cuts and Jobs Act enacted by Congress in December 2017 brought several tax reforms that affect businesses. Consult with your tax advisor before year-end to assess what changes impact you and determine whether any actions are required. For example, you might qualify for the employer credit for paid family and medical leave if you are an eligible employer and you set up or amend a qualifying paid family leave program.
Audit Your Vendors
One of the significant factors contributing to your business’s financial health is the cost of goods and services. You can control these costs by choosing vendors with more favorable pricing, for example. Review contracts with suppliers and vendors. Reach out to those you intend to use in the next year and attempt to negotiate lower rates.Assess Profit and Loss Statements
A profit and loss statement provides a snapshot of your business’s performance in terms of revenue and expenses. Making comparisons to statements from other time periods can be useful. A review of your business’s profit and loss statement can help identify areas that are underperforming or categories of expenses that are too high.Download Documents and Data
To protect against data loss and changes in accounting software and to more easily retrieve year-specific information for tax filings or in case of audit, organize and backup relevant reports and information.
September 27, 2018
- Export all data in your accounting system, both in the software format and in CSV format for importing into other software versions in the future.
- Run accounting reports and save as PDF. Include a profit and loss statement for the period January 1 through December 31, detail of every transaction during that period and a balance sheet from January 1 and one from December 31.
- Save PDF reports of payroll details for each employee for the year as well as payroll tax filings.
- Download PDF reports of online transactions, credit card statements, utility bills and similar.
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Want to Switch to an S-Corp? Don’t Forget Reasonable Compensation
Are you considering forming an S-corporation as you look to take your business to the next level or try to take advantage of changes to the tax code? Don’t forget about the reasonable compensation rules.
What Are Reasonable Compensation Rules?
Owners of an S-corporation must pay themselves a reasonable salary for the services they perform for the corporation. This salary must be classified as W-2 wages rather than as an owner’s draw or dividend payment.
Why Are There Reasonable Compensation Rules?
Although both wages and most S-corporation dividends are taxed as ordinary income, wages are subject to additional Social Security and Medicare taxes. To avoid the extra taxes, S-corporation owners have tried to take no or very low salaries so that their income would be taxed as dividends.
The IRS believes that anyone working for a corporation would receive a salary, so trying to reclassify this income as dividends is a loophole that should not be allowed.
How is Reasonable Compensation Calculated?
There is no fixed formula for reasonable compensation. Instead, it’s based on industry norms such as average salaries, the size of the business, and each individual’s position and experience.
When you set your salary, you should write down how you determined it and keep copies of any data you relied on.
What Happens If You Don’t Pay Yourself Reasonable Compensation?
If you don’t pay yourself reasonable compensation, the IRS may reclassify a portion of your income as wages. You would then have to pay any additional taxes that you owe as well as possible interest and penalties for under-reporting your taxes.
How Did the Tax Cuts and Jobs Act Change Things Beginning in 2018?
The Tax Cuts and Jobs Act added a new deduction for sole proprietors and S-corporations known as the Section 199A deduction. This allows business owners who meet certain criteria to take a deduction equal to up to 20% of their business profits. The catch is that S-corporation salaries are subtracted from business profits, so that portion of your income is not eligible for the deduction.
Section 199A Deduction Sole Proprietorship vs. S-Corporation
For example, assume a solo business owner making $100,000 with no employees.
- A sole proprietor filing a Schedule C would pay Social Security and Medicare taxes on the full $100,000 but would only pay income taxes on $80,000 after a $20,000/20% deduction.
- An S-corporation owner who has to take the full $100,000 as wages due to reasonable compensation would pay Social Security, Medicare, and income taxes on the full $100,000.
- An S-corporation owner who can classify their income as $75,000 wages and $25,000 dividends would pay Social Security and Medicare taxes on $75,000. They’d pay income taxes on $95,000 ($75,000 + 80% of $25,000).
You’d have to break out your calculator to figure out which scenario is best, because it depends on your other income, overall tax bracket, and how much you have to classify as reasonable compensation.
High-Income Section 199A Deduction Sole Proprietorship vs. S-Corporation
There’s also a second catch if you make at least $157,500 as a single filer or $315,000 as a joint filer. Instead of a simple 20% deduction, your deduction is based in part on the total wages you pay.
- Sole proprietors with no employees will almost always lose at these income levels because none of their income counts as wages.
- S-corporation owners may be able to increase their deduction by increasing their wages. In addition, Social Security taxes only apply to the first $128,400 in income for 2018, so the only extra tax on wages versus dividends is the much smaller Medicare tax.
Whether an S-corporation makes sense under the current tax law will vary based on your income level, what you would have to take as reasonable compensation, and your overall tax situation. Ask your accountant to help you go over the numbers.September 21, 2018
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Why Businesses Fail
Businesses fail all the time. The global marketplace is competitive, especially in retail and e-commerce. Smaller companies have to work twice as hard to compete against deep-pocketed rivals that can afford occasional failure. Let’s take a look at some of the most common reasons why businesses fail.
1. Failure To Innovate
One of the easiest ways businesses fade into obscurity is because they fail to innovate. They might develop a new technology or carve out a portion of a market but just coast for years, even decades. Think about Kodak. Kodak practically invented the personal camera market and established itself as the dominant company in that industry. Do you know what Kodak did next? Not much. The company just coasted on that early success and failed to embrace the shift to digital camera technology. Kodak was once a success story and is now a cautionary tale of why companies always need to innovate.
2. Lack Of Capital/Cash Flow
Capitalization and cash flow problems are other common ways for businesses to fail. Capitalization and cash flow are two different but connected ideas. A company that’s not capitalized properly might have too much debt on its books relative to equity and could face higher borrowing costs. High borrowing costs on small business loans or merchant cash advances are fine for a short period but over time make it hard to reinvest capital into the business. High borrowing costs can also hurt cash flow and make it difficult to cover day to day expenses. In the end, poor cash flow may force a business to sell off assets to raise cash or go bankrupt entirely.
3. Entrenched Competition
Businesses fail because entrenched competition can make it difficult to grow. That competition might enjoy better scale, better technology, or simply a more valuable brand in the eyes of consumers. That doesn’t have to be a death sentence because the competitive landscape isn’t stagnant; businesses always need to find a new competitive advantage. Your competition likely were in the same position once before they found their niche.
Your company can’t stand still because your competitors won’t either. Businesses must always be willing to innovate and figure out how to make the better mousetrap. Along with the way, it’s critical to manage finances to ensure each project provides the best return on small business loans. Your competitors might have a head start but with some elbow grease and some luck, your business won’t be the next Kodak.September 7, 2018
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Is Forming an LLC Worth It? What an LLC Really Does
Many new business owners see creating an LLC as a sign of being an official business or that they’ve joined the big leagues. While LLCs do have benefits, they may not be everything people think they are. Here are some of the most important limitations and where LLCs still help.
Liability Protection Might Not Apply to Personal Acts
LLCs provide a broad array of protections against losing personal assets due to business debts, lawsuits, or other losses. However, these protections are not absolute.
One of the biggest holes is for services performed personally by the LLC owner. If the LLC owner commits an act of negligence, even when working for the LLC, the owner may still have some personal liability. (By contrast, the owner usually wouldn’t be personally liable for a similar act of negligence by an employee).
In short, an LLC mainly protects against debts and losses caused by the actions of others. If you need protection for your own actions, you’ll likely need liability insurance rather than relying on the LLC.
Lenders Can Ignore Your LLC
Your LLC only protects you from personal liability for business debts if the lender agrees to do business with the LLC. Most small business loan contracts have a clause that requires you to take personal liability for any business debts.
Once you sign the contract, it’s as if you co-signed for someone’s car loan. The LLC will make payments first, but if it runs out of money, you’ll need to pay from your personal assets.
If you don’t agree to this, you may find it impossible to get a loan. Most lenders won’t lend to an LLC without the owner’s personal backing unless the LLC has a lengthy history of positive cash flows.
Your LLC May Not Carry to Other States
LLCs are a state law creation so are recognized on a state-by-state basis. If you do business across state lines, you may need to register in each state where you do business.
If you don’t meet a specific state’s requirements, your LLC may not protect you against any debts or lawsuits arising out of your activities in that state. Further, doing business in other states as an LLC could subject you to additional taxes and state filing fees that you might not face as a sole proprietor, so it could lessen the benefit of an LLC.
None of this means that you shouldn’t form an LLC as it may still be right for your business. But you should talk to your legal and tax advisers to make sure an LLC will do what you’re expecting it to do.September 7, 2018
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Google Tools to Promote Your Small Business
Google is one of the most widely-known internet brands. But it is not merely a search engine. There are many ways Google helps you to build your business’ online presence in a way that helps customers to find you. Here are some to get you started.
Google trends helps you to determine what keywords are popularly searched in your industry. You can determine search volume for specific terms and see trends over time. You can also compare word variations in order to find the one that’s most used in your target geographic regions. Using Google Trends can help you to develop text-based content that drives traffic to your website.
Especially relevant when you are in competition with similar businesses in your area, MyBusiness allows you to put your best foot forward on the search engine. By creating a Google MyBusiness listing, you can make sure your up-to-date contact information, website and hours are the first things people see when they Google terms relevant to your products and services.
Google Adsense and Google Ads
Google has two distinct advertising programs. Google Adsense allows you to place other people’s ads on your website and earn revenue for hosting them. Google Ads allows you to place your own ads for your business elsewhere on the web. You pay a fee every time someone clicks those ads. Whether you want to pay to drive traffic to your business, or make money from visitors who’ve already found you, these programs can help.
Google Analytics and Google Data Studio
Part of running a successful business is tracking the success of your previous efforts. Therefore, it’s vital to know not just how many people found your website, but how they got there. Google has two such tools to help you achieve this: Google Analytics and Google Data Studio. While many people are familiar with Google Analytics, few might be aware of Data Studio, which allows you to translate those numbers into useful graphics that you can apply to future marketing efforts.
Regardless of your industry, your online presence is central to your business success. By using the various tools offered by Google, you can find the best way to reach your customers and devise innovative plans to retain them for the long term.September 6, 2018
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How Formal Does Your Accounting Process Need to Be?
If you want someone to give you a long list of technical rules to follow, your accountant is probably a pretty good source. But do all of those accounting rules actually help you, and do you even need to follow them?
Why Accountants Have So Many Rules
The main goal of accounting is consistency and comparability. If you take two income statements from two different companies, you should easily be able to compare them side by side. The same goes if you’re comparing different years’ financial statements prepared for the same company by different accountants.
If every accountant did whatever felt right to them, every set of financial statements might be different. It might or might not include certain items, or there could be discrepancies about which year or quarter items should be reported in.
By creating a detailed set of rules, accountants can make sure they’re handling similar transactions the same way.
What is GAAP and Why Is It Important?
GAAP stands for Generally Accepted Accounting Principles. It’s the primary set of rules used by accountants. Some principles are very broad, while others include a technical step-by-step on very specific types of transactions.
What is SOX and Why Is It Important?
SOX or SARBOX is shorthand for the Sarbanes Oxley Act. SOX provides additional accounting rules and oversight for public companies. Because Congress put it in place to protect investors, violations carry potential civil or even criminal penalties.
Do You Have to Follow GAAP and SOX?
The first question to consider is whether breaking accounting rules will break the law or just make your accountant mad. Generally, only public companies have a legal obligation to follow GAAP and SOX. Public company means a company that sells stock and falls under the jurisdiction of the SEC.
Non-profits may also have special accounting requirements under state law. For the most part, other for-profit companies have no legal obligation to follow GAAP.
What’s the Difference Between Tax Accounting and Financial Accounting?
When used in different contexts, financial accounting usually means preparing financial statements under GAAP while tax accounting means preparing financial statements under the Internal Revenue Code and IRS regulations. The rules are sometimes different between tax and financial reporting because the IRS is mainly focused on collecting taxes, while the SEC and accountants, in general, are mainly focused on making information useful to owners and investors.
All companies have to use tax accounting to file their tax returns. If you have no other obligation to use GAAP, you might consider doing all of your accounting on a tax basis to avoid having to keep two sets of books.
When Else Do You Need to Follow GAAP?
Following GAAP is also useful when you’re trying to raise capital by bringing in a partner or seeking a loan. If someone who’s reviewing your financial statements knows that you used GAAP, they know exactly how you prepared them.
Virtually all lenders will deny your application if they can’t understand your financial statements or track your cash flows. Others may insist that you use GAAP so that they don’t have to do the work of converting your financial statements before they analyze them.July 26, 2018
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How Workplace Flexibility Can Benefit Your Organization
Productivity doesn’t necessarily mean rigid schedules and attendance practices. In fact, the opposite approach can result in your team accomplishing even more (and better) work while feeling better about their working conditions. Let’s examine how a little flexibility can help your organization in a big way.
The Advantages of Flex Time
About one-third of U.S. organizations have adopted some type of “flex time” policy that allow for more free-form workplace scheduling. The simple fact is that most employees don’t have to be sitting at their desks from 9 to 5 every workday to get their tasks done in a timely manner. Variations in the day-to-day schedule can give employees the freedom to take care of outside needs and interests, from picking up the kids after school to pursuing continuing education. Maybe your employee could benefit from a 7 to 3 schedule on certain days, for instance, or even an evening/weekend shift. This kind of flexibility can greatly improve morale and make your company a very desirable destination for high-quality job candidates.
Sensible Scheduling for Optimal Efficiency
If you ask teachers why they love their choice of career, they’ll invariably mention the luxury of having 3 months off every summer. Their employees aren’t inconvenienced by their absence, since school isn’t in session. Other professions can take advantage of similar seasonal trends. For instance, accountancy firms will need all hands on deck through April 15th, only for those same employees to find themselves at loose ends afterward. Or perhaps your business or industry experiences a natural lull through the winter holidays. Offering paid downtime to your employees during these periods doesn’t cost you anything if those employees would only be occupying a desk instead of actually working. You can also save money on overhead costs such as utility bills when you’re running less equipment.
Remote Work Options
Do your employers have to be physically present in your facility to get their work done? If not, consider offering remote work options such as telecommuting. A work-from-home setup doesn’t encourage slacking; on the contrary, it actually improves productivity, if only because your employees can get right to work in the comfort of their home instead of enduring a grueling commute (or staying home on account of foul weather). Remote work options also require less office space and equipment. Cloud computing platforms even let your teamwork together at any time of night or day from multiple locations all over the world.
Flexibility can pay off handsomely in today’s working world. If you need a small business loan or other financing to perform the necessary retooling, contact us for a consultation.July 13, 2018
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What’s Wrong With Using Your Personal Checking Account for Business?
Think it’s easier to just use your personal checking account for your business? Think again. You could end up disrupting your business or costing yourself far more money than you’re saving. Here’s what can go wrong.
Your Bank May Suddenly Close Your Account
Using your personal checking account for business purposes is against most deposit agreements. Some banks are stricter for others. For example, one bank has been reported as suddenly closing an individual’s account for receiving deposits from freelance work, eBay, and Etsy.
If your account is suddenly closed, you could be faced with no way to receive deposits or have payments to vendors bounce. At best, this will be an embarrassing situation that costs you time and money to resolve. At worst, you may permanently harm business relationships if people feel you’re financially unstable.
You’re Giving the IRS a Blank Check to Look Into Your Accounts
When the IRS audits your business, it has the right to request your accounting records and bank statements. If you’re using your personal account, this means that the IRS will be going through all of your personal transactions as well since they’re mixed in.
Even if you think you have nothing to hide, this makes the audit take longer and gives the IRS more things to ask questions about. On the other hand, if you’re using a separate business account, the scope of the audit is naturally limited to only your business activities.
You May Lose Corporate Protections
If you’ve formed a corporation, LLC, or other limited liability entity, it’s especially important to use a separate bank account. This is often a legal requirement in itself but is also an important step for keeping your limited liability.
The reason you get limited liability from a corporation or LLC is that it’s considered a completely separate entity from you as an individual. If you don’t act like it is, such as by mixing your personal and corporate money, the legal theory under which you get limited liability evaporates. If you’re later sued, this could allow the plaintiff to pierce the corporate veil by claiming you’re not really a corporation so they can go after your personal assets.
You Could Lose Banking Protections
Many banks offer to reimburse you for unauthorized transactions on both business and personal accounts. However, the level of protection is often different. In addition, there may be additional requirements such as using the account for its intended purpose.
If you had a large loss, the bank would probably perform a thorough investigation before reimbursing you. If they found that you had business transactions in your personal account, they may use this as grounds to deny or reduce your claim.
It Makes Your Accounting Harder
When you mix personal and business transactions, it means you or your accountant have to take the extra step of sorting out what’s business and what isn’t. By contrast, if you have a dedicated business account, you can automate virtually all of your data entry using QuickBooks or other popular software. This reduces the chances of mistakes and gives you a more accurate picture of your finances.
Need extra cash flow to meet a business checking account opening minimum or minimum balance to avoid fees? Learn more about how you can use your existing sales to increase your working capital and speed up your growth.June 27, 2018
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When Do Banks Stop Looking at Your Personal Credit for Business Loans?
Now that your business is established, you’re probably wondering why banks are still looking at your personal credit when you look for business loans. After all, the inquiries are bringing down your credit score, and you probably don’t want to personally guarantee debts when you don’t need to. Here’s what the banks are looking for before they’ll rely solely on your business credit.
When You’ve Established Business Credit History (Not Just Good Personal Credit)
Whether you have a sole proprietorship under your own name or a large corporation, your business has its own credit report and score. The general concepts, like paying on time, are the same as your personal credit, but the systems are entirely separate.
If you’ve started your business with personal loans or credit cards, you have no business credit regardless of how much you’ve borrowed and how diligently you’ve paid it back. Your business credit history only includes business loans and credit cards designated for business use.
As with personal loans, banks will be more cautious lending to a business without established business credit. Just like personal credit, you’ll need to start with a small business loan or credit card and work your way up through responsible use.
When Your Sales Can Support the Loan
As with personal loans, banks want to see business income that can support the payments. If you’re in startup mode and are taking a loss, your income is negative, and the bank won’t grant your business a loan unless you back it with your personal resources.
Once you have even a few months of steady sales, the doors start to open. Your first available options will likely be working capital loans or merchant cash advances that are repaid directly from your payment processor. As your income grows, unsecured loans may become available.
When the Bank Doesn’t Think It Needs Personal Collateral
Your business assets can also help you obtain a business loan without a personal guarantee or a personal credit check. Even if you own a relatively new business, you can probably obtain a secured loan, such as for a vehicle or a commercial mortgage, if you can show stable income.
For unsecured loans, the bank will be looking for stability. This includes having sufficient assets, such as real estate, machinery or inventory, or having a longer income history.
To learn more about what lending options you might have available based on your business credit, income and assets, talk to Merchant Capital Source today.May 9, 2018
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How to Finance Your Business: Equity or Debt?
Do you need to raise capital to grow your business? Your biggest choice is whether to use debt or equity financing. Here’s the difference between the two so you can make an informed decision.
Equity is another name for stock in your business. Equity financing is just another term for selling shares.
Advantages of Equity Financing
Here are the advantages to equity financing.
- No fixed cash payments. Investors have the right to future profits, but you don’t need to pay them on a set schedule.
- You don’t need to pay back investors if your business fails. Equity owners share in both the good and the bad.
- You get the ability to bring in strategic partners. Sometimes, you need advice and expertise in addition to cash. Selling equity to the right people can get you both and accelerate your growth.
Disadvantages to Equity Financing
Equity financing also comes with some big catches.
- You give up control of your business. Shareholders get a vote, so the more shares you sell, the less say you have in how things are run — especially if you give up majority ownership.
- It’s tough to value a new business. Because it’s hard to put the right price on shares of a new business, you may struggle to raise enough money and/or give up control faster than you intended.
- Equity sales are highly regulated. You may need to register with the SEC unless you meet very technical exceptions. This costs you both time and money.
Debt financing means borrowing. It includes everything from credit cards to mortgages.
Advantages of Debt Financing
Here’s why debt can be more advantageous than equity.
- You don’t give up control. The bank gets no share in your business as long as you pay the loan on time.
- Interest expense is tax deductible.
- You only pay a fixed amount. If your profits skyrocket, you still pay only the original loan amount not a percent of your profits.
- You don’t need to register with the SEC if you’re borrowing from banks or other established lenders.
Disadvantages of Debt Financing
Here’s why some businesses still choose to avoid borrowing.
- You have to make your monthly payments even if your business is struggling and your cash flows are low.
- Interest costs, especially for a new company without established business credit, can match personal credit card rates and eat into your profits.
- You may have to personally guarantee any loan to get approved.
So what’s right for you? Ask Merchant Capital Source about your borrowing options so you can make an informed decision.May 8, 2018
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How Small Business Owners Can Boost Their Retirement and Save on Taxes
If you’re running a new business that’s still trying to create a steady cash flow, you may think that it’s too early to start a retirement plan. In fact, setting up a small business 401(k), SEP IRA or SIMPLE IRA can help reduce both your personal and business taxes and allow you to reinvest into your business rather than giving more cash to the IRS.
Personal Tax Benefits
As with traditional 401(k) contributions, contributions into a qualified small business retirement plan are tax-deferred. This means that you won’t pay taxes on this income now but instead will pay taxes when you withdraw the money in retirement (and hopefully are in a smaller tax bracket). This includes both contributions made as an employee and any contributions received from the employer (even if you’re the employer).
If you use a small business 401(k) and are in a low tax bracket, you may wish to use a Roth option to pay taxes now and have tax-free withdrawals in retirement. SEP and Simple IRAs don’t have Roth options, but because they’re treated as IRAs, you can immediately convert your contributions to a Roth IRA if you desire.
If your AGI is $63,000 or less (for 2018), you may also be eligible for the Saver’s Credit on up to 50 percent on the first $2,000 of your contributions.
Business Tax Deductions
Any employer contributions that you make are deductible just as you would deduct regular wages. Furthermore, administrative costs, such as monthly plan fees, that you pay as the employer are generally deductible business expenses.
Business Tax Credits
Eligible employers can also claim a tax credit for the costs to start a retirement plan in each of the first three years you have a retirement plan. An eligible employer generally has 100 or fewer employees. However, you must have employees other than yourself, so solo 401(k)s and other solo options aren’t covered.
The credit is the smaller of $500 or half of your ordinary and necessary eligible startup costs. Startup costs include setup fees, administration fees and costs to educate your employees about your plan.
While the business tax credit may be small, it still stacks with your personal and business tax deductions. This allows you to cover your retirement plan costs while still freeing up cash you were spending on taxes so that you can continue to grow your business.May 8, 2018
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How to Keep a Cash Crunch From Killing Your Business
Many otherwise successful businesses fail because they can’t meet their short-term cash needs. This includes 29 percent of startups who fail during cash crunches — many of whom were profitable or seeing strong growth. To avoid finding yourself in the same situation, take the following steps.
1. Ignore Profits
The first thing you need to do is forget your profit and loss statement. It has nothing to do with whether you have cash coming in.
A profitable business may have accrual sales on the books that won’t turn into cash until it’s months too late. An unprofitable new business that’s growing smart with wise investments could have more cash than it needs.
The only thing that will let you know if you’ll have enough cash in the bank is your statement of cash flows and cash flow forecasts.
2. Shorten Receivables
When you see a cash pinch coming, the easiest step to take is to shorten your receivables. This starts with polite payment due date reminder calls coupled with an offer to take payment over the phone.
Next, get to work on any past due accounts and other customers you know pay inconsistently. Begin the process of more aggressive collections, and/or plan to do without the cash in the near future.
To get payments coming in faster, you can offer discounts on outstanding invoices or for future orders in exchange for immediate payment.
3. Extend Payables
At the same time you’re trying to get customers to pay you faster, it’s time to pay your vendors a little slower. If you aren’t already, stretch all of your outstanding payments out until their due date.
If you’re currently taking advantage of early payment discounts, consider delaying those payments until the regular payment deadline as well. The cost of temporarily giving up a 1 to 2 percent discount may be less than your other financing costs or lost opportunities.
As a last resort, weigh the costs and benefits of paying late. This includes both potential late fees as well as potential damage to your relationships with those vendors.
4. Liquidate Unused Assets
A cash crunch is also a good time to evaluate whether you really need unused assets that are sitting around your warehouse.
The easiest place to start is unsold inventory. Many business owners hang on to inventory that never sold or is an unreasonably slow seller in hopes that demand will improve. However, the benefit your business will gain from selling at clearance sale prices now is more than the small potential of selling for more in the future.
Next, consider obsolete and underused equipment. If the reason you still have it is because you might need it or use it every once in a while, it’s time to sell. The immediate cash plus freed-up productive space is worth more to you than possibly having to temporarily rent that equipment in the future.
5. Don’t Be Afraid to Borrow
Another area where business owners might be too cautious is in taking on debt. This comes from a personal-finance mentality that all debt is bad.
In the business world, all debt is good as long as your added profits at least cover the interest costs. Even when you’re able to manage a cash crisis without debt by tightening your belt, the cutbacks will often set back your profits or slow your growth.
Having an open line of credit or working capital loan can help you to quickly take on smart debt when you have more opportunities than your current available cash can handle. All you need to do is compare your expected profits against the borrowing costs.
To learn more about your financing options or how to manage your cash flows, contact Merchant Capital Source today.May 1, 2018
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What Online Businesses Need to Know About the SCOTUS Sales Tax Case
The Supreme Court is set to take on a case that could upend internet sales tax law. South Dakota is seeking to end the physical presence test and requires most online retailers to collect sales taxes.
What’s the Current Law?
Currently, states may only force online retailers to collect sales tax on behalf of that state if they have a physical presence in that state. Although states can and usually do require their residents to pay an equivalent use tax when a seller doesn’t collect sales tax, residents rarely report online purchases.
Bricks-and-mortar retailers have argued that this gives out-of-state online retailers an unfair advantage as online sales effectively become tax-free. States are also facing lost tax revenues as online sales increase.
What Is South Dakota Trying to Change?
In 2016, South Dakota passed a law requiring online retailers with over $100,000 or 200 transactions in sales to South Dakota residents to collect South Dakota sales tax. The state knew that this law went against the 1992 U.S. Supreme Court case Quill v. North Dakota that established the physical presence test. Its goal was to have the Court revisit this issue.
South Dakota is arguing that the Quill case doesn’t reflect the reality of modern commerce. Quill established the physical presence test in response to states trying to impose a sales tax on mail order catalog sales. At the time, catalog sales accounted for about $180 billion per year in revenue in contrast to today’s over $3 trillion in online sales. In past cases, some Supreme Court justices have hinted both that they disagreed with how Quill was decided and that it has created a huge revenue shortfall for states.
What Are Online Retailers Saying?
Wayfair and other major online retailers are arguing to keep the current law in place. They say that having to track a patchwork of not just state but local sales taxes imposes an unreasonable burden.
One notable exception is Amazon, whose large network of warehouses has forced it to start collecting sales tax in most states. Amazon is pushing a nationalized approach to sales taxes that eases the burden of having to track state and local laws.
What’s Happening in the Case?
If the Court rules in favor of South Dakota, online retailers can expect other states to pass similar laws. If not, things will stay the same for now, but states will likely continue seeking to find ways to tax online sales.April 11, 2018
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5 Tips for Successfully Securing a Small Business LoanStarting a small business is an expensive venture, and for many owners, the cost of getting started exceeds the available amount in their bank accounts. While there are many ways to raise funds for business expenses, many turn to small business loans for financing. If you have never undergone the process of applying for a small business loan, the process may seem intimidating, but following these simple steps can help you to prepare:
1. Know Your Personal Credit Score and Prepare Financial DocumentsBefore beginning the process of applying for a small business loan, it is crucial to know your personal credit score. As a new business owner, you will have little merit when it comes to handling finances other than your own. If you have excellent credit, this will show potential lenders that you are capable of managing finances and remaining debt free. If your credit score is average or falls on the lower end of the spectrum, spend some time improving your score before you apply. This will improve your odds of securing a small business loan with reasonable interest rates. Likewise, begin to prepare and collect financial documents, such as bank statements, tax returns and financial projections, for your budding business.
2. Determine How Much Money You Need and How You Will Use ItThere are certainly endless expenses that come along with starting any business. However, you will need to identify specifically how much money you will need. While it would be helpful to secure a loan for a large figure, be realistic and ensure first and foremost that you can afford the loan and that the funds will go to a worthy investment. During this process, create a list of intended purchases and be prepared to explain to lenders how these purchases will enhance your businesses profitability.
3. Create a Business PlanSadly, 50 percent of all small businesses will inevitably fail within the first five years. Lenders are aware of this staggering statistic and as a result, see small business loans as a major risk. To provide these lenders with a sense of security, prepare an in-depth business plan that includes past financial statements of your business or future projections, if the business is a start-up. This plan will also address collateral for the repayment, assets, an evaluation of the market of your business and information regarding your relevant experience.
4. Research LendersThere are an impressive number of lenders for small business loans. Whether you opt for a traditional bank or would prefer to work with the Small Business Administration, be sure to research all of your options. Many lenders have their own specific set of requirements, such as being in business for six months prior to the loan, which means that you may not qualify for a loan through some lenders but may meet the standards of another.
5. Find the Best LoanThe most crucial step of securing a small business loan is to find the one that is best for your business. Certainly, you will want to find a low-interest rate, but also be sure to compare other terms and conditions of the loan. Calculate the total cost of several loan options to determine which will cost the least amount of money overall.After you have gotten everything in order, you will be ready to begin the process of applying for a small business loan. By preparing in advance and carefully researching the requirements of lenders, you will significantly increase your odds of being approved.April 5, 2018
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How to Accept Bitcoin Payments as a Small Business Owner
As Bitcoin and other cryptocurrencies gain popularity, more business owners are starting to take them as payment. Whether you believe in their value as an investment or are simply trying to boost sales, it’s easy to start accepting Bitcoin payments. Here’s how.
Option 1: Use a Bitcoin Wallet
Bitcoin wallets are the simplest method. The virtual wallet is a holding account just like a wallet for actual cash or a checking account. You tell the customer your wallet’s address, and they place the money inside.
The benefit is that there are little or no fees. The downside is that wallets are really designed for personal use. It might be OK to use if you’re a service provider taking one-time payments, such as a handyman, but probably wouldn’t be appropriate for heavy retail use.
Option 2: Use a Bitcoin Payment Processor
For commercial users, a number of payment processors are now available for both online stores and in-store point-of-sale systems. These payment processors function in a similar manner to traditional credit card processors and payment solutions such as PayPal.
Be sure to review merchant and consumer protection policies. While Bitcoin payments are typically not reversible, some payment processors may add holding periods during which payments can be reversed as way of attracting consumers to the service.
What to Do With Bitcoin When You Get It?
You’ll likely need or want to convert some of your Bitcoin to cash to cover business expenses, taxes and your personal draw. You have two options when you receive Bitcoin payments.
- Hold it in a Bitcoin wallet. You can keep it there for investment purposes, sell it, convert it to another cryptocurrency or make payments to other merchants who accept Bitcoin.
- Convert it to cash automatically. Some payment processors give you the option to immediately convert Bitcoin payments to cash and make a cash deposit to your bank account just as you would get from a credit card processor. This protects you against price fluctuations when you need cash to pay your expenses or if you want to offer Bitcoin payments without taking on cryptocurrency market risk.
No matter which option you choose, adding additional payment options for your customers is usually a good way to boost sales and improve your cash flows. To learn more about adding payment options or improving your cash flow, contact Merchant Capital Source to discuss your options.March 27, 2018
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Biggest Online Marketing Mistakes All Small Businesses Make
Chances are, when you started your small business, you might not have paid a great deal of attention to your landing pages and marketing content. Your goal was likely getting your products or services in front of the public and generating sales.
As your business grew, you added on social media and maybe you added a blog or started a newsletter to capture email addresses. The problem is there are a few oversights you might not be aware of that can affect your bottom line, profit.
Let’s take a look at a few of the biggest mistakes small businesses make so you can avoid these and make sure you’re maximizing your investment.
Not Showing Images in Motion and Only Using Stock Images
A mistake some businesses make is stock images which can be too generic. Images tell a story. Sealy Mattress ads show couples relaxing on their new bed. Titleist golf ads show golfers with their Titleist bag or clubs.
To help you find the right images, show people in motion and hire a photographer to take pictures of your products being used.
Note: Keep your pictures ever-green (not all Christmas or summer) so they can be used year-round.
Not Checking for Broken Links
It happens all the time. You start a page and share a link, then you delete the page and now you have a broken link. Or, you might type in the wrong link address. This can be frustrating for customers who visit your pages. To help with this, run your site through a Google Analytics search to help find any broken links so you will rank higher in Google searches.
Not Using PPC to Increase Traffic
Unless your brand is an overnight hit reaching millions on social media, you might want to consider pay-per-click (PPC). Businesses usually don’t opt for PPC because they don’t understand it or they are budget-conscious.
PPC generates traffic from people that are looking for your products and services. Pay options can include pay-per-click (PPC), cost-per-click (CPC), cost-per-mile (CPM) for banner ads, and search engine optimization (SEO) with keywords through Google AdWords.
Quick Sprout noted that in 2017, 93 percent of consumers used online searches and PPC ads led to 50 percent more sales with companies getting about $3 for each $1.60 that was spent on ads. If you’re unsure about setting up PPC ads or using SEO, consult with your marketing firm.
Need to hire a marketer or want to start paid ads?
Small businesses can start a line of credit from a small business loan or a merchant cash advance. Your business loan can cover advertising expenses. As traffic and sales increase, you’re going to need more supplies and may need to hire additional staff to help meet customer demand.
Not Optimizing Your Site Across Mobile
Kissmetrics states you have about eight seconds to make an impression on visitors when they see your site. If you started your website through sites like GoDaddy, Wix or Shopify, your site likely converts across mobile, meaning you can view it on a desktop, smartphone or tablet. Older websites don’t have this and might not be integrated with social media either.
What to Look For
On mobile devices, you should see a condensed version of your site with large buy buttons, easy-to-view menus, and social media tabs. If you don’t have this, your marketer might recommend a new template that’s optimized so you don’t lose traffic.
By correcting these mistakes small businesses make, you can start generating more traffic and ultimately that will lead to increased sales. Talk to your marketer about optimizing your landing pages. For merchant lines of credit to help with PPC, images, and ads, you can reach out to Merchant Capital Source which is a direct alternative lender for small business loan information.March 14, 2018
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What Small Businesses Need to Know About Issuing 1099s
The IRS has made timely 1099 reporting one of its top priorities with increased enforcement and larger penalties. Here’s what you need to know about issuing 1099s to your independent contractors to stay off their radar.
When Do You Need to Issue a 1099-MISC?
You must issue a 1099-MISC to any vendor or contractor your business pays $600 or more during the year. This could be from a one-off project or from an ongoing relationship. Payments to individuals, partnerships and LLCs are generally reportable on Form 1099-MISC.
When Do You Not Need to Issue a 1099-MISC?
You usually do not need to issue a 1099-MISC for payments to a corporation or an LLC taxed as a corporation. In addition, you should not report payments on 1099-MISC when they are reportable on Form 1099-K.
Form 1099-K is used to report payments with credit cards and over third-party electronic payment networks. The payment processor is responsible for reporting these payments. Issuing a 1099-MISC for these payments may result in your contractor’s income being double-reported.
What Is the Deadline to File 1099-MISC?
You must send a 1099-MISC to your contractors by January 31 of each year. You must send a copy to the IRS by the same date — you no longer have additional time to file with the IRS as in the past. These changes went into effect during the 2017 filing season for the 2016 tax year.
What Are the Penalties for Failing to File a 1099-MISC?
If you file an information return late, including 1099-MISC, or if you never send one at all, you pay a per-return penalty. Per-return means if you have 100 contractors to whom you should have issued a 1099-MISC, you pay the penalty 100 times. The penalties are as follows.
The IRS has also taken action against businesses who fail to issue 1099 forms for failing to remit withholding taxes. The theory is that if you didn’t issue a 1099, you didn’t get the payee’s tax identification number. When you don’t get a payee’s tax identification number, you’re required to withhold 28 percent through 2017 and 24 percent under the new tax law starting in 2018. The IRS can collect this amount from you if you can’t show the payee paid taxes on it.
- No more than 30 days late: $50 per return.
- By August 1: $100 per return.
- Later or not at all: $260 per return.
- Intentional disregard (knew you should have filed but didn’t): $530 per return.
As always, double check with your accountant for the exact requirements that apply to your specific situation and to make sure you do everything correctly and on time.March 13, 2018
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Politics and the Workplace: Tips for Diffusing Heated Debates
In a country that is deeply divided on a wide variety of social issues, it comes as no surprise that politics are playing a large role in workplace arguments. Business leaders turn to their HR partners for help with easing the tension, and HR professionals are tasked with balancing the needs of the business against staff members’ self-expression. These tips can help you navigate the sensitive situations you encounter when diffusing politically fueled debates among coworkers.
Whether your employees support different candidates during an election year or they disagree on topics currently dominating news cycles, you can be sure that sooner or later, conversations will get heated. The best defense is to set expectations for professional, respectful behavior early and often. If you don’t already have a policy in your employee handbook for code of conduct, get one written and approved by your legal advisors as soon as possible.
Include critical points, such as “Employees are expected to demonstrate courteous, respectful conduct towards customers, colleagues and leaders.” Follow up with examples of the sort of conduct that will not be tolerated. For example, “Employees must refrain from using foul language.” Such a policy ensures each staff member understands how professional behavior is defined in your company, and it gives you solid ground when addressing individuals who take their political debates too far.
Address the Incident
When an incident does occur, tempers might be high in the heat of the moment. If the employees involved in the debate are too agitated to have a professional conversation, send them to separate areas for a break⏤or in extreme cases, they may be required to leave for the day. Once the participants are ready for a calm discussion, next steps depend on the severity of the situation.
A debate that got overly spirited but didn’t cross the line into personal attacks can be resolved with a coaching conversation. Explain to staff members that there are important issues being discussed nationwide, and you support their passion for being engaged and involved in the political process. However, in a place of business, such debates are disruptive to the work environment. State that business needs require personal conversations to be kept to a minimum, and above all, respectful behavior must prevail in every interaction.
For more serious incidents, the same conversation is warranted. However, you may need to go a step further. Consider formal disciplinary action for individuals who make personal attacks, use raised voices or otherwise violate your code of conduct. Ensure that documentation clearly indicates that the issue is the employee’s behavior, not the employee’s point of view.February 23, 2018
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5 Employee Perks That Will Keep Your Staff Happy
In order to succeed as a business, you want to make sure that both your customers and staff are happy. While most businesses focus on customer happiness, some forget about keeping their own employees happy. Forbes notes that happy employees lead to more engaged communication with customers, which can result in 20 percent increased sales. If you want to keep your staff happy, here are some perks that can boost their satisfaction and lead to greater productivity and more sales.
Offer Health and Fitness Perks
Healthy employees lead to more satisfied employees. If you don’t have health or fitness programs currently in place, now is a great time to consider them. You may want to offer a great health insurance plan or offer free gym memberships or even install a workout area on-site. Fortune suggests that employee wellness programs can help to increase productivity and keep employees within your organization for a longer period of time. Having accessible programs can also make it easier for your staff to stay healthy and get a great workout in, regardless of their life and work responsibilities.
Consider Implementing Paid Parental Leave
Entrepreneur suggests that by offering paid parental leave to staff, you can attract new talent and have more loyal employees. Many companies only offer paid maternity leave, and some don’t even offer that. This can be a great way to set your company apart from the competition and show your employees that you care about their families. Netflix is one company that offers generous parental leave, giving employees up to one year of paid leave!
Allow Work From Home Opportunities
The ability to work from home is a perk that many employees appreciate. It shows that their employer trusts their use of time and that they understand the need for more flexibility in today’s world. Whether you offer occasional work from home opportunities or allow your employees to regularly work outside of the office, it can actually save money, too.
Give Employees Gadgets to Help Them Work Better
Another great perk your employees will love is employer-provided gadgets. This can help them save money on their own personal tech purchases and can be a great way to make sure they have the right technology to succeed in their job. You may want to offer employer-provided laptops or cell phones to your staff members.
Help Better Educate Employees by Offering Tuition Reimbursement
Looking to encourage your employees to continue their education? Offering a tuition reimbursement program is a great company perk. You can encourage your staff to learn more and grow as individuals. While some companies fear top talent using these perks and then leaving soon after, Forbes discusses why this shouldn’t be a worry. Instead, you’ll be attracting some of the best and brightest employees. This can also encourage staff to get higher degrees so they’re more qualified for promotions within your organization.February 21, 2018
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Accounting Tips for Your Online Business
When it comes to running an online business, you may consider yourself a pro. However, if you are like many small business entrepreneurs, your accounting experience is minimal at best. Whether you’re entering the world of online commerce or are struggling to get your books in order, here’s a handy guide to help you make sense of receivables, payables, and everything in-between.
1. Get organized
The number one piece of advice for small business owners is simple: get organized. Put simply, you need to sort and manage that stack of papers sitting on your desk or in a filing cabinet somewhere. You need to track every transaction, whether from making a purchase or receiving income. Don’t continue to put it off; now is the time to buckle down and get your finances in order. Too many businesses have failed because they did not organize their books.
2. Keep personal finances separate
Your personal finances should never mix with your business finances. If you have used your personal bank account, go open a new account and use it for business transactions only. Keeping track of business finances is difficult when everything goes into one account. In addition, some business entities are legally required to keep separate bank accounts; it will even make tax time much easier.
3. Ask for help
If you have no experience with accounting, you shouldn’t practice with your own business. While many small business owners choose to do their own bookkeeping, they also know it is one small part of the accounting process. Bookkeeping involves managing the day-to-day financial transactions of your company; accounting is more complicated, dealing with tax laws and financial statements. At the minimum, you should hire a qualified accountant who is familiar with online businesses. You might also consider hiring a professional bookkeeper if you feel you’re not quite up to the task.
4. Make a schedule
If you decide to do it yourself, know that bookkeeping will take up a significant chunk of time each week. You will need to schedule your tasks to ensure they are completed. At the minimum, make time each week to:
- Record deposits
- Create and mail invoices
- Pay bills
- Record daily transactions (bill payments and expenses)
- Reconcile your bank and credit card accounts (monthly is the minimum, but it’s best to reconcile daily to catch errors as soon as they pop up)
5. Find a way to get paid
If you’re a new online business, you’ll need a way to accept electronic payments. There are many methods available, but they each come with their own fees and downsides. If you use bookkeeping software like QuickBooks, you can opt to use their credit card processing service. You could also sign up for a merchant account with your bank or use a third-party service like PayPal. Speak to your accountant to determine which option is best for your business model.
6. Know the laws about sales tax and business licenses in your area
Some cities, counties, and states have no regulations regarding online businesses and sales tax and business licenses. However, that structure varies from one area to the next, and the fines can be substantial if you break the laws in your area. If you have not done so already, consult your local city, county, and state government offices for assistance. If this seems overwhelming right now, ask your accountant for help getting set up.
7. Be ready for tax time
Finally, you’ll need to be prepared for tax time each year. With proper organization and bookkeeping procedures, you can simply hand your financial records over to your accountant. They may ask a few questions about your expenses to see if you qualify for certain deductions, and then they can prepare your tax documents for you. If you have any questions about recording your expenses throughout the year, ask your accountant sooner rather than later.February 9, 2018
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For a Happier Workplace, Ban the Desk Lunch
For employees who work a 9 to 5 desk job, nothing is more tempting than eating lunch at their desk. In fact, around 65 percent of Americans actually engage in this practice. Typically, the meal will consist of leftovers from the prior night’s dinner or easily microwavable (and generally undesirable) foods that can be consumed fairly quickly while making little to no mess. Although this sounds unappealing, the practice is alluring because it allows employees to continue working without losing their workday “groove” or having to socialize with their co-workers.
The problem with eating lunch alone at your desk, however, is simple: You are not actually taking a break. You may be satisfying your hunger, but reading emails and answering phones between bites does not allow you to mentally escape from the tasks at hand. Many fear that a real break at lunchtime may disrupt their workflow and affect their work for the latter half of the day, but the opposite is actually true. By taking a step outside the office (or at least away from the desk), you allow your mind to become refreshed, and when you return, you are able to view matters from a new perspective. This can improve your productivity, making it much easier to meet pressing deadlines than if you were to continue working without a break.
Similarly, you, like many employees, may feel as if socializing with co-workers during your lunch break will be a distraction. Studies, however, find that eating lunch with your co-workers can drastically boost your working relationship and, in turn, improve your overall feelings toward your job and work environment.
For those in management positions, banning desk lunches can encourage your employees to take adequate breaks and engage with their co-workers. As a result, the entire environment will transform into a much happier place. Aside from improving productivity and relationships between employees, banning desk lunches can also eliminate bothersome smells that may distract others as well as the potential for spilled beverages and the accumulation of crumbs and food particles. After an initial period of adjustment, your employees will thank you for freeing them from a life of excessive stress, lonely lunches and sticky desks (chances are the custodial staff will also appreciate the switch).February 9, 2018
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6 Tips on Getting Your Small Business Accounting Practices in Order
According to a study conducted by the team at Wasp Barcode Technologies, problems with accounting was one of the major challenges business owners reported having. Making sure the financial aspects of your business are handled properly should be one of your main concerns. Failing to properly manage your finances may lead to you going out of business.
Statistics show that nearly half of all small businesses shut down within the first four years. Improper accounting and money management are some of the leading causes of these small business failures. Read below to find out how to get your small business accounting practices in order.
1. Separate Business and Personal Expenses
One of the biggest mistakes new small business owners make is failing to separate their personal and business expenses. Having a dedicated bank account and credit card for your business is a great idea. By separating these expenses, you can save yourself a lot of time and stress. With separate accounts, you should have no problem figuring out what deductible expenses you have.
2. Track All Expenses
Labeling and categorizing all of your expenses is also something you need to view as a priority. Failing to do this will usually lead to you missing a number of tax write-offs and credits. Using your business credit card for major expenses is wise due to the electronic record it creates of the purchase. Making use of a business credit card will also allow you to take advantage of the rewards and cash back they generally offer. If you prefer to use cash, be sure to use accounting software to make a digital copy of your receipts.
3. Record Your Deposits
Making a detailed record of all of your deposits is also something you need to get in the habit of doing. Neglecting to keep up with things like revenue from sales and other infusions of cash can lead to you paying unnecessary income taxes. According to the IRS, business owners pay around $2.1 billion in civil penalties each year. Steering clear of these penalties is easy with the right mindset and accounting software.
4. Get Some Professional Help
Most business owners who have tried to do their own bookkeeping will tell you it pays to hire an accountant. Unless you have extensive experience with small business accounting, you are bound to make a number of mistakes. By entrusting this work to a professional, you can rest assured all of your financial records will be up-to-date and accurate.
5. Keep Up With Labor Costs
Among the largest expenses you will have as a business owner is your payroll. Keeping track of things like overtime and other perks can help you avoid over or underpaying your employees. Don’t forget to pay yourself in order to avoid tax issues.
6. Plan For Unexpected Expenses
As any business owner knows, unexpected expenses are a common occurrence. Planning ahead for these stressful situations can be very helpful. The last thing you want is to have a piece of essential equipment breakdown and not be able to replace it due to a lack of funds. Creating a rainy day savings account is something all business owners need to do.
Do you need business capital in a hurry? The professionals at Merchant Capital Source can help you out. They specialize in offer working capital loans to deserving businesses all over the country.February 2, 2018
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Are Cryptocurrencies a Fad or Will They Change Banking As We Know It?
There’s been a lot of buzz surrounding cryptocurrencies, Bitcoin and blockchain technology. While many are interested in investing in Bitcoin, is it just a fad or are investors onto something? Let’s take a look at the Bitcoin craze, it’s origins, how it relates to blockchain technology and the future of cryptocurrencies.
The Recent Bitcoin Craze
Click on any financial app and there are likely headlines surrounding Bitcoin. Whether a person is a novice investor or someone who’s trading all the time, they’ve probably heard about Bitcoin reaching nearly $20,000. But what is Bitcoin and why has it become so popular overnight?
Bitcoin (BTC) is a technology-based cryptocurrency derived from cryptographic codes that uses non-manageable algorithms. It’s only been around since 2009, when it was started by a man named Satoshi Nakamoto as a way to send small electronic payments peer to peer. Bitcoin, as a cryptocurrency, is not tied to a particular country, which means it’s deregulated. Retail businesses have taken interest in it because there are no associated banking fees. It’s been suggested that there are only about 14 million Bitcoins in circulation.
Blockchain Technology and Cryptocurrencies
Cryptocurrencies are new ways to use currency. They are virtual cash, not to be confused with mobile wallets. Cryptocurrencies use blockchain technology, which is a ledger that’s decentralized and allows currency to be exchanged. There are about 3,000 cryptocurrencies to date, although the number is still growing.
The rise in demand for cryptocurrencies and the reason for all the attention is that cryptocurrencies don’t require banks and are deregulated. To own a cryptocurrency like Bitcoin only requires that a buyer visits a site like Coinbase and sets up an account. Once they buy their Bitcoins, they are stored in virtual wallets, but this is not FDIC insured. The cloud wallets remain vulnerable and can be subject to hacking.
While the SEC has been monitoring Bitcoin’s high volatility due to its inherent (rather than intrinsic) value, investors have been keeping track of it as well. Goldman Sachs has even decided to set up a cryptocurrency trading desk by June 2018, and is working out now how to meet future client demand. Although only about 6 percent of consumers understand cryptocurrencies, based on PwC data, there’s good reason to consider investing.
While cryptocurrencies don’t require accounts and are not hack-proof, they have still experienced fewer hacking incidents than traditional banks. As recent hacking incidents and DDoS attacks have shown, banks continue to be susceptible to a variety of threats. Banks also require credit applications, loan documents and other data that’s time-consuming. For instance, checks take time to process and can be compromised. Because cryptocurrencies can send money from person to person or to a business almost instantly, they are gaining in popularity and may one day be used with electronic contracts. There are currently cryptocurrency miners working on implementing cybersecurity protocols to ensure cryptocurrencies like Bitcoin can eventually be used for all transactions.
What This Means for the Future of Banking
As more consumers and investors take interest in Bitcoin, cryptocurrencies and blockchain technology, this curiosity may eventually change the future of banking. There may be fewer banks and ATMs, as well as a decreased need for paper currencies, checks and even credit cards.
As Bitcoin popularity increases, retailers and potential investors are considering their options, especially as blockchain technology continues to be a way to exchange money with fewer transaction-related fees. For now, though, attention remains on Bitcoin as brokerage firms like Goldman Sachs start prepping their trading desks to trade Bitcoin and other cryptocurrencies. Countries like China, Japan and Australia are already considering regulations. Stay tuned!January 17, 2018
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What Small Business Owners Need to Know About the New Tax Code
Because large portions of the new tax law were targeted toward small businesses, small business owners will see sweeping changes in 2018. Here are the most important things you need to know.
When Does the New Tax Code Take Effect?
The new tax law is effective for tax years starting after December 31, 2017. If you file based on the calendar year, everything that happened in 2017 remains under the old law. The new law then takes effect with the new year, and you’ll use it when you file for 2018.
If your tax year ends on a date other than December 31st, you will continue to follow the old tax law until the end of your tax year. When your new tax year begins, you’ll begin using the new law for that year.
What Are the New Tax Rates?
Tax rates have changed for every type of business entity.
- C-corporations and LLCs taxed as a corporation will pay a flat 21 percent rate.
- Personal service corporations previously taxed as a C-corporation at the special 35 percent flat rate will see their rate reduced to a 25 percent flat rate.
- Sole proprietorship, partnership, LLC and S-corporation owners will be taxed at the new individual rates. The maximum individual tax rate is now 37 percent down from 39.6 percent. Most taxpayers will see a 2 percent to 3 percent reduction in their marginal tax rate.
Does Eliminating Itemized Deductions Mean No More Business Deductions?
The elimination of certain itemized deductions on the individual side does not impact small business owners. This change only relates to personal expenses as well as certain unreimbursed expenses incurred by W-2 employees.
Small business owners can generally continue to deduct all ordinary and necessary business expenses on their Schedule C (for sole proprietors) or business tax return.
What’s the Pass-Through Deduction?
The pass-through deduction allows individuals to claim a 20 percent deduction for their share of income from a pass-through business entity. A pass-through business entity is a sole proprietorship, partnership, LLC not electing to be taxed as a corporation, or S-corporation.
Individuals making below $157,500 ($315,000 if married filing jointly) simply receive a 20 percent deduction. Above those thresholds, limitations apply based on the amount of W-2 wages the business pays and the activity the business is engaged in.
What Are the New Rules for Depreciation vs. Expensing?
You can now expense more large purchases in the year you made them rather than depreciating them over time.
- Under Section 179, you can immediately deduct up to $1,000,000 for purchases such as furniture, equipment and machinery that would normally need to be depreciated over time. This is double the previous limit.
- Improvements to existing buildings, such as new roofs and air conditioners, now qualify for immediate expensing rather than depreciation.
- For purchases that don’t qualify for immediate expensing, accelerated depreciation is available, which allows you to deduct more of the cost sooner rather than evenly spreading it over a longer period.
Did Retirement Plan Deductions Change?
Despite rumors about changes to 401(k)s and other retirement plans, the law made no changes to the tax treatment of these plans.
Some routine inflation adjustments do apply for 2018.
- 401(k) employee contributions are now capped at $18,500 (up $500) and the combined employer plus employee limit is now $55,000 (up $1,000).
- SIMPLE IRA limits remain unchanged.
- SEP IRA contributions are now based on the first $275,000 in compensation (up from $270,000).
When Will Everything Be Finalized?
The IRS is rushing to adopt new rules and issue new forms covering exactly how the new calculations will work. Finalized guidance should be available in early 2018.January 10, 2018
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New Pass-Through Deduction Explained: How Small Businesses Will Save
The new tax code contains a 20 percent deduction for pass-through businesses — sole proprietorships, partnerships, LLCs and S-corporations. Here’s how it works:
What Does Pass-Through Mean?
Pass-through refers to how sole proprietorships, partnerships, LLCs and S-corporations are taxed. Instead of having a separate business tax return, the business’s profits or losses are passed through in full to each owner. The owners then pay their personal income tax rates on their share of the profit or loss.
What Are the Basics of the Pass-Through Deduction?
With some exceptions explained below, the pass-through business owner allows small business owners to reduce their taxable income by 20 percent of their business profits. For example, a sole proprietor making $100,000 per year will receive a $20,000 deduction and only pay income taxes on $80,000 in income.
It’s important to note that this deduction is not an adjustment to Adjusted Gross Income (AGI). It does not reduce self-employment taxes. It also has no effect on other tax items calculated based on AGI such as retirement contributions, healthcare subsidies and childcare credits.
Why Was This Deduction Added?
Before tax reform, non-pass-through businesses, such as C-corporations, paid tax rates ranging from 15 to 35 percent. These rates were similar to the 10 to 39.6 percent individual rates by paid pass-through businesses.
With corporate rates now reduced to 21 percent and individual/pass-through rates ranging from 10 to 37 percent, Congress felt that pass-through businesses would be disadvantaged by the changes. The pass-through deduction is designed to offset the difference in rates.
Calculating the Pass-Through Deduction: Owner’s Income
The first test for determining the deduction amount is each individual owner’s total income. If an owner has an AGI up to $157,500 ($315,000 if married filing jointly), they receive a deduction of 20 percent of their business income.
This test is per owner, so it can still apply if the business’s income is above the limits as long as each owner’s share leaves them below the cap. If some owners qualify and others do not because of owning a larger share or having other income, the owners that do qualify can still take the deduction.
Exception: Service Businesses
Designated service businesses have special rules. Designated service businesses are skilled professionals who largely rely on their own labor such as doctors, accountants and lawyers. The deduction depends on their income.
- If they’re within the $157,500/$315,000 cap, they receive the full deduction.
- The deduction gradually phases out and drops from 20 percent to zero percent as their income approaches $207,500 ($415,000 if married filing jointly).
- For higher incomes, there is no deduction for service businesses.
Non-Service Businesses Above the Income Limit
If the owner of a non-designated-service pass-through has an AGI above the $157,500/$315,000 limits, the deduction is capped based on the business’s payroll and capital assets. The cap is the greater of
- 50 percent of wages, or
- 25 percent of wages plus 2.5 percent of capital assets.
Example: A single-owner S-Corporation has profits of $500,000 and paid wages of $100,000. Because 50 percent of wages ($50,000) is less than 20 percent of business income ($100,000), the owner’s pass-through deduction is limited to $50,000. If the business had paid $400,000 in wages, the pass-through deduction would still be 20 percent of profits or $100,000.
The purpose of these caps is to prevent pass-through business owners from taking unreasonably low salaries and high dividends to avoid payroll taxes. It also discourages high-salary employees from reclassifying themselves as 1099 consultants to take advantage of the deduction.
Does Your Small Business Qualify?
These rules serve as the general framework, and the new tax law gave the IRS the authority to set additional rules to meet the law’s intent while closing loopholes and filling in any gaps. Check with your tax accountant to see if any additional provisions apply to your business.December 29, 2017
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How Will the New Tax Plan Impact Your Small Business?
Tax reform is still working its way through Congress, but its final form has become more clear as both the House and Senate have released the full text of their bills. Here are the most important changes that will impact small businesses.
Changing Tax Brackets
Both corporate and individual tax rates will change under the new plan. For corporations and LLCs taxed as corporations, the maximum tax rate will drop from 35 percent to 20 percent.
Individual income tax rates, which are imposed on sole proprietorship and partnership income, would drop from a maximum 39.6 percent to 35 percent under the House plan. The remaining brackets will also be consolidated into fewer tiers and shifted. This will result in lower taxes for many individuals, but those at the top of a bracket may see their marginal rate increase.
Changing How Passthrough Entities are TaxedOne downside to sole proprietorships, partnerships, and S-corporations has been that income is often taxed at higher personal tax rates (plus Social Security and Medicare taxes) rather than potentially lower corporate tax rates. This problem would be further magnified by nearly halving the maximum corporate tax rate, but the House and Senate both offer solutions.The House plan creates a safe harbor where a pass through entity’s owner can automatically treat 70% of business income as wages taxed at their individual rate and 30% as business income taxed at the new corporate rate. Capital-intensive businesses may also be eligible to increase the business income portion.The Senate plan leaves pass through income at the personal rates but adds a deduction to offset the added taxes. Small business owners will be able to subtract 17.4% of their business income from their taxable personal income.
Removal of Itemized Deductions
Although individuals may see their taxes go up if they’re currently itemizing their deductions, there will be no changes on the business side. Ordinary and necessary business deductions remain deductible directly on Schedule C for sole proprietors or on the business tax return for other entities. These deductions have and will continue to be considered expenses of the business and not itemizable personal deductions.
Replacing Depreciating with More Expensing
Currently, high-value assets, such as vehicles and machinery, must be depreciated over time to spread the tax deduction over the life of the asset. The new rules would allow a much broader range of assets to be expensed immediately, thereby allowing business owners to deduct the full cost of the asset in the year of purchase.
The Senate has put eliminating the Obamacare mandate back on the table as it debates its version of the bill. While this provision currently has weak support, it could mean that small businesses would no longer be fined if they were unable to afford to offer health coverage for their employees.
Elimination of the Estate Tax
One final change to keep an eye on is the elimination of the estate tax or a large increase in the estate tax exemption. This change would allow families who have a substantial portion of their net worth in a multi generational business to avoid having to take off debt or sell shares in the business to pay estate taxes on the business’s value.
When to Take Action
Any part of the bill is subject to change until the final vote, so the best thing you can do right now is to stay informed and run spreadsheet forecasts on how the changes will impact you. The most important thing to remember is that any changes would be for your 2018 tax return. That gives you the rest of 2017 to take any deductions or credits that you may lose when the final version passes.November 29, 2017
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Top 3 Finance Apps for Your Small Business
Managing your finances well is the key to success in business. Without proper management of things like payroll, return on investment and expenditures, you can find yourself in a difficult situation. However, make no mistake: finance management is a hard business, which is why entire industries have risen around solutions to this problem. Solutions like QuickBooks and accounting services have saturated the market, but how do you choose from the overwhelming number of options out there? We’ve researched finance management options and have found three that work great and can fit in the palm of your hand.
First off on our list of finance apps is Neat Accounting. Neat is more than a name in this case, and it describes the application pretty well. One of Neat’s most interesting features is its capture ability. Neat’s capture function allows you to scan and take photographs of receipts, invoices and other documents and transfer the data in the picture into actual usable data. Things like dates, names and prices are selected from the page and logged for you to use at a later date. Neat also allows you to sync this data across all of your devices and generate reports in a matter of moments. Neat also has a long list of other features that you can browse here, but the scanning function is probably the application’s most noteworthy feature.
Gusto may be a relatively unknown name in the business finance sector, but that’s only because the company was formerly known as ZenPayroll. The company changed its name to better represent its expanding horizons, which now include benefits like health insurance and workers’ compensation. ZenPayroll was a leader in its industry, and with good reason. Gusto allows you to manage not only payroll, but also HR concerns and your employees’ benefits. So while other services may be focused entirely on standard accounting and costs, Gusto tries to encompass a wide variety of business functions under one application. Gusto’s pedigree is certainly impressive, and its service also allows you to sync with industry giants like QuickBooks and Xero. If you would like to check Gusto out without any of the commitment, feel free to sign up for a demo here and find out what Gusto can do for you and your business.
Last but certainly not least is Wave. Wave’s big selling point is that it works directly with small businesses, and a lot of its features really speak to that ideal. In fact, this selling point is so big that a lot of Wave’s services are free. Yes, you read that right. Wave’s pricing page is very comprehensive, and Wave’s strategies work well with small businesses who are looking for a finance management software that does what they need it to do. Besides its free services, Wave also offers guaranteed management of payroll and benefits come tax time, and will carry out your payroll on whatever schedule you see fit.
All in all, when it comes to business finance management, there is a seemingly endless number of options out there. However, the three choices outlined in this article are all great options for small businesses, and their mobile applications work well no matter where you might be.November 28, 2017
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3 Ways to Use Social Media to Promote Your Small Business
With so many social media platforms out there, it’s tough to know how to promote your small business. You may feel like a tiny raindrop in a hurricane of information. But with several practical steps, you can reach your target audience.
There are literally millions of social media users. According to Statista, 81 percent of Americans have a social media profile. This is way up compared to the 24 percent back in 2008. It is even a 5 percent increase from last year’s 76 percent. All these users and companies make lots of noise. Don’t be part of the static. Stand out with a distinctly clear message using these tips.
Tips for Facebook
First and foremost, make a page for your small business. Use attractive graphics and concise content. It’s not enough to just post interesting content. You have to make sure people are seeing it. Make connections by joining several groups that relate to your small business. People are constantly looking for recommendations and advice on everything from plumbing to fashion. For example, an interior designer and mother joined a local moms Facebook group. Someone asked for a recommendation for an interior designer, and she responded back. Another time, a friend recommended her within the same Facebook group. She received business from the exact client she targets by being part of this Facebook group.
Tips for Twitter
Twitter can be intimidating with its character count and hashtags, but don’t miss out on this valuable tool. Using key hashtags helps create networks of individuals who share the same interests, including the product or service of your local business. Twitter users can find you based on a single hashtag, and you can have individual conversations with customers who have found you. You also can send personalized tweets to individual customers that cater directly to their needs instead of spewing generalized pleas into cyberspace.
Tips for Instagram
Don’t just aimlessly post a few pictures here and there and expect people to flood your business. Start with a beautiful profile pic and an interesting (not boring!) bio description. Make sure to link to your website as well.
Next, create a photo campaign, and stick with it. Everyone loves to look at beautiful pictures and lots of them. Maybe your business is working toward a major event. Perhaps you have exciting new inventory arriving. Think of a major item to promote and then snap, filter, repeat.
Make sure to hashtag all your photos — this creates valuable connections for you. For example, #reclaimedwood could send you clients looking for special furniture pieces. They will see your picture and potentially buy your piece. It’s a good idea to also hashtag your city or your city’s local business/tourism board’s hashtag (ie. #sharethelex for Lexington, KY) to boost local business.
It is daunting to keep track of all your social media accounts. Use applications like Hootsuite that let you post on multiple social media platforms at once. You can also schedule your posts up to weeks in advance to reduce the workload of your small staff.
With these tips, you are on your way to a practical and well-planned social media campaign. Remember to tell your story and keep it interesting. Be a helper. Clients will come to you with their business.November 16, 2017
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10 Tips to Keep Employees Healthy During the Holiday Months
Holiday gatherings can create the perfect storm for employee illness. How can you ensure your company protects employees?
Tip 1: Encourage Employees to Take Time Off
Send employees home when they’re sick. If employees are caring for sick family members, they too should be encouraged to take PTO. The Department of Labor has advice on how to handle this when the flu season is active.
Tip 2: Reduce Stress at Work
Stress creates conditions for employees to get rundown. Create a work environment with outlets for stress, such as on-site massage therapy or an employee assistance program. The National Center for Complementary and Integrative Health offers tips for reducing stress.
Tip 3: Watch Unhealthy Habits
It’s easy to get into bad habits during the holiday season. Seasonal foods add inches to everyone’s waistlines. Alcoholic beverages flow freely at parties. Offer healthy snacks in the workplace, and talk to employees about making healthy lifestyle choices.
Tip 4: Schedule Flu Shots
Employers can do their part to prevent illness during the holiday season by scheduling in-house health clinics. An occupational health center can conduct health screenings and give out flu shots.
Tip 5: Educate About Hand Washing
Hand washing has been shown to prevent many illnesses. Add antibacterial products to work areas and restrooms to support this goal. The Society of Human Resource Management has provided guidelines about stopping the spread of germs at work.
Tip 6: Encourage Traveling Safety
According to the National Safety Council Injury Facts 2017 report, motor vehicle accidents were the No. 2 leading cause of death last year, just behind workplace accidents. Encourage employees to wear seatbelts and not take chances on the roads.
Tip 7: Hire More People
One way your business can improve the well-being of employees during the holiday season is to augment your current staff with new hires. Creative small business financing can support these goals and cover payroll during the holidays.
Tip 8: Reward and Recognize Employees
Offer rewarding experiences for employees that help them grow. Recognize and reward employees on a regular basis with cash incentives and performance-based bonuses.
Tip 9: Cross-Train Employees
During the holiday months, you can help alleviate stress and increase the happiness level of employees by cross-training workers. If an employee takes time off or needs help, there will be others to support them.
Tip 10: Alleviate Financial Worries
The holiday months can be pressure-filled for employees. Many are going into debt buying holiday gifts. Consider ways to help employees stretch their earnings further with financial education programs and corporate discounts.
By using the above tips, your company can help keep employees healthy, engaged and productive during the busy holiday season.November 14, 2017
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Pros and Cons: Assessing the Benefits and Risks of Background ChecksBackground checks into applicants’ criminal and credit history increasingly are problematic, especially given recent state and federal legislation. Employers should weigh the possible benefits to running an applicant’s background check against the potential risks. This checklist guides employers who choose to continue the practice.
Credit Check Considerations
Given the questionable value of information obtained from a credit check, the unfairness of penalizing applicants for economic hardship and concerns about privacy, legislators in the states of California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington restrict the use of credit reports in making employment decisions. Additionally, the federal Fair Credit Reporting Act requires applicants be given a clear description of their rights under the act as well as a copy of the credit report.
Criminal History Questions
At least 29 states and over 150 cities and counties passed laws that intend to provide persons with criminal records a fair chance. Known as “ban the box,” referring to the checkbox on many applications that asks whether the applicant has a criminal record, the legislation requires employers to wait to ask about an applicant’s criminal background until after finding that she meets the initial qualifications for the position. The Equal Employment Opportunity Commission suggests employers use caution when using criminal records to make employment decisions, since doing so might be considered discrimination.
Consumer Report Protections
Background checks run by employers are considered consumer reports, and as such are subject to the Fair and Accurate Credit Transactions Act and state privacy laws, which require the data be protected from unauthorized access. The data also must be properly stored or destroyed. Additionally, an applicant’s written permission is required before running the reports. If you base your hiring decision on any information found in the reports, then you must inform that job seeker.
If you decide that credit or criminal history checks are relevant to the job and you choose to continue obtaining such reports, then first learn the state and local legal requirements related to background screening. Answering the following questions can help guide your policy:
November 9, 2017
- Do you provide job seekers a written description of their rights under the Fair Credit Reporting Act?
- Do you provide all applicants a copy of their credit report?
- Does your criminal background check criteria follow Equal Employment Opportunity Commission guidance that requests consideration of the nature of the offense and time passed?
- Do you secure the data you collect during the hiring process and protect it from unauthorized use?
- Do you properly dispose of information gathered about the job seekers you did not hire?
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What Retirement Plans Can a Small Business Offer?
Are you struggling with trying to keep top employees from fleeing for big corporate perks? Choosing the right retirement plan is one way you can match the giants with minimal extra costs. Here are your options.
Small Business 401(k)
A small business 401(k) is legally the same as a big corporate 401(k). The only distinction is that some 401(k) providers streamline the process to help make it easier for small businesses to set up a plan.
- Higher contribution limits.
- Flexibility to offer different compensation packages to different employees. (Some restrictions apply that keep owners or highly compensated employees from getting all the benefits.)
- Typically higher management fees and setup costs.
- Increased IRS reporting requirements.
- May be less flexible if employees need to withdraw funds early.
- Employees can contribute up to $18,000.
- Employers can contribute a fixed percentage and/or match employee contributions up to $54,000, in combined employer plus employee contributions.
- Employees age 50 and older can contribute an additional $6,000 in catch up contributions.
SIMPLE stands for Savings Incentive Match PLan for Employees. SIMPLE IRAs are available to businesses with 100 or fewer employees.
- Cookie-cutter setup that’s easier to manage.
- Often has lower setup and management fees.
- Works like a Traditional IRA for early withdrawals or rollovers.
- Lower contribution limits.
- Rigid contribution rules.
- Employees can contribute up to $12,500 ($15,500 if 50 or older).
- Employer Option 1: Match up to three percent of employee contributions with a $12,500 cap. The percentage can be reduced as low as one percent in any two out of five years.
- Employer Option 2: Contribute two percent of each employee’s compensation regardless of their contributions with a $5,400 cap.
SEP stands for Simplified Employee Pension plan. SEP IRAs are available to employers of any size.
- Fewer IRS reporting requirements than a 401(k).
- Higher employer contribution limits.
- Often has lower setup and management fees.
- Works like a Traditional IRA for early withdrawals or rollovers.
- No additional employee contributions.
- Most SEP plans require the same contribution percentage for all employees.
- Employer contributions of up to 25% of compensation. Maximum contribution of $54,000.
- Some plan providers allow employees to put their personal IRA contributions into a combined account with their SEP IRA contributions for ease of management. If this is allowed, employee contributions are treated as regular Traditional IRA contributions with the usual $5,500 limit.
Ask your advisor for more information about these options today. It’s a great way to boost employee morale and retention with minimal impact on your cash flow.October 24, 2017
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Top DIY Web Builders for Your Small Business
A website is the modern-day equivalent of a calling card, and it is an effective way to attract customers and provide them with information about your products and services.
A web presence for your small business is also an important part of creating credibility for your business. Now more than ever, consumers utilize the internet to research products and services, and a professional online business demeanor inspires confidence in potential customers.
How to Pick the Best Website Builder
A Do-It-Yourself website builder is an excellent option for small business owners who want to build a website but have no experience in coding or web design. Up until now, you had to be well-versed in HTML and CSS code if you were to construct an effective and professional web presence.
Today, however, there are many DIY web design choices available to you. As a general rule of thumb, an optimal DIY website builder will cover the various technical aspects of design and development. This will enable you to focus on unique content so you can get your small business website up and running in a functional and timely manner.
Many of the builders on the market offer a free basic plan, giving you a chance to test them out so you can determine which one best meets your needs. Here are our picks for the most reliable top website builders for small business owners.
Like most DIY website builders, Weebly is user-friendly. It is a robust and reliable drag-and-drop builder, and its implementation requires no technical knowledge. Weebly features comprehensive web-building tools and an intuitive interface. Any small business owner can build a professional website on Weebly within a couple of hours.
Weebly offers a wide variety of publishing and content tools that help small business owners create a highly customized website, including G Suite for Business, which helps to distribute branded emails. As an upgrade, Weebly can also provide an e-commerce solution to help business owners sell online.
Wix is an industry-leading, cloud-based development platform. It lets small business owners build a professional website with ease. Like Weebly, Wix provides an intuitive, drag-and-drop interface. With the purchase of an upgrade, Wix will also include a domain name for your business website as it provides free and secure hosting.
This DIY web-building platform allows small business owners to easily create customized forms and provides a way for customers to book appointments online. Wix also enables small business owners to create mailing lists, receive customer subscriptions, send invoices and receive payments quickly.
BigCommerce is rich in features that appeal to small business owners. It is a scalable, all-in-one e-commerce solution that helps business owners get the best possible return on investment.
BigCommerce features leading built-in marketplaces such as eBay and Amazon. It also boasts secure hosting, unlimited bandwidth and no transaction fees. BigCommerce precipitates a small learning curve, but it does not require any technical knowledge to master. It is a unique e-commerce solution designed to grow with your business.
For small businesses, engaging a professional design firm is often a financial stretch. Today’s technology has made it easier for business owners to put together a respectable website without having any coding skills.October 19, 2017
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Small Business Financing: What Are My Options?
One of the biggest decisions that small business owners face is determining how they will finance their business. As only a very small percentage of business owners can afford to finance their business ventures outright, it is necessary to explore all of the options that are available. While a traditional loan may prove to be beneficial for some small business owners, other methods of financing may spare you the cost of high interest rates.
Traditional Bank Loan
Many find that they feel most comfortable with securing a loan through a traditional bank. If you are a member of a credit union or have a long-standing relationship with your local bank, this may be the case for you as well. Others, however, find that the interest rates are much higher through banks than through other avenues. This, of course, will largely be dependent upon your credit score.
The Small Business Administration (SBA) is an organization that is committed to providing assistance to small business owners. Aside from providing valuable resources and information, the SBA also provides low-interest loans to small business owners. Many find that these interest rates are lower than that of a local or national bank, while the terms are also generally more flexible.
The word “fundraising” likely conjures up notions of elementary school bake sales for most; however, this concept is not limited to school children. Hosting a fundraiser can be an excellent way to raise money for your business while also spreading the word about your mission. This is especially popular when events are held on a local level, as many communities relish the opportunity to support a local business.
Securing an investor or two is a great way to get your business going. In some cases, these investors will own a portion of the company in exchange for the financial backing. In other situations, investors act as “angel investors” and hold no stake in the company but generally require a 20 percent return on their investment. To secure either type of investor, it is crucial to map out your business plan and develop a strong pitch.
Similar to fundraising and investors, crowdfunding relies on financial assistance from others in order to get your business off of the ground. Today, there are numerous crowdfunding platforms online where people from around the world can easily locate your business. With this avenue, several people will usually donate small amounts, which add up over time. To be most effective, incentives are usually offered based on the quantity of the donation. For instance, a small donation may receive a bumper sticker, while a large one may receive a free product after the business has launched.
Bootstrapping can take on many different meanings when it comes to small business financing. It may mean that you finance your business ventures with your own personal finances. In this case, you do not have to worry about interest rates, keeping investors appeased or paying off other loans. This method, however, does come with more risk to your personal finances. Other means of bootstrapping may involve renting equipment instead of buying it and trading products or services with other businesses.
The type of financing that is best for your small business will likely depend on a variety of factors. These factors may include the amount of money that you require, along with your personal finances and credit score. In either case, there are a number of ways to raise money for your small business. Before committing to any of these options, be sure to read the fine print of the offer and consider what the final cost will be.October 5, 2017
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AI and the Retail Store of the Future
It’s no secret that brick-and-mortar retailers are struggling. More consumers are shopping online and the trend is expected to increase. In fact, a 2017 study by Square and Mercury Analytics showed that 80 percent of Americans have made an online purchase within the past month. While the days of the physical store may seem numbered, AI has the power to reverse this trend and help bring retailers into the 21st century.
One of the most immediate and far-reaching benefits of using AI involves extracting value from data. Retailers have access to an abundance of consumer and behavioral information. However, a study by McKinsey found that about two-thirds of this data isn’t utilized due to a lack of data-processing procedures, appropriate technology and analytic talent. Implementing AI would allow retailers to use the mountains of data available to them to predict what consumers might buy next and focus their resources accordingly.
AI can also give retailers better insight into the minds of their clients. Natural language processing (NLP) is already being used to make chatbots more personable and intelligent. With real-time access to customer inquiries and language, developers can train NLP algorithms to better understand human language and, in turn, meet the needs of their clients. Zendesk reports that 40 percent of customers switch to a competitor because of their reputation for great customer service.
NLP can also help make meaningful connections between data that might otherwise go undetected. Consumer buying trends would be easier to identify, recommendations would become more intuitive (backed by data) and overall customer satisfaction would also increase. It could even help retailers identify previously unknown customer segments.
Several big-box retailers are currently testing AI-powered technology in their stores. Target has armed its sales associates with hand-held POS systems that can track inventory in real-time across the company, arrange for shipping and take customer payments, making the shopping experience more streamlined and efficient. Lowe’s is currently using its brand name LoweBots (AI robots) in the Bay Area. These robots can answer customer questions, help clients locate items throughout the store and track shopping patterns, which can be re-applied to AI algorithms to improve company business decisions.
AI-based facial recognition software is already being used in some stores to track specific user activity. While some customers may not be thrilled about this level of surveillance, there are also less intrusive methods of observing customer behavior like floor-level cameras, which can track how long customers spend in a specific area of a store. They can also estimate gender and age based on video of shoes. This technology could have significant implications for inventory management and marketing strategies.
The ability to provide a truly customized shopping experience is arguably the most significant benefit of AI. With aggregated data from sources like social media and online profiles, retailers can create product recommendations that really reflect the personal interests and tastes of the customers. AI would also allow retailers to crowdsource customer orders to gauge the overall reaction of clients to specific items and the potential popularity of these items.
If brick-and-mortar stores are to compete with big-box stores, successfully combining the physical with the digital is essential. According to the Boston Consulting Group (BCG), retailers who implement AI see a 6 percent to 10 percent boost in sales, which is two to three times faster than average. In order to remain competitive in this new world of e-commerce, traditional stores must adapt and take advantage of the latest advances in AI to secure their place in the future of retail.October 4, 2017
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5 Best Practices for Terminating an Employee
No matter the circumstances, firing an employee is always difficult. However, by keeping a few important best practices in mind, you can ensure that the situation is handled as fairly, legally and compassionately as possible. Here are some helpful tips for terminations that are as stress-free and smooth as possible.
Give a Warning First
Don’t fire an employee out of the blue. First, give them a warning, or let them know that they are on notice. If an employee is warned that they may be terminated first, they will be less blindsided, angry or taken aback if the termination ultimately does happen.
Pick the Right Time and Place
When choosing to terminate an employee, pick a place that allows the utmost privacy. You don’t want the employee to be embarrassed or to have immediate contact with coworkers. Try to have the meeting at the end of the day, when he or she can naturally pack up belongings and depart.
Have Someone Accompany the Terminated Employee
Once the employee is terminated, make sure that someone from the company escorts him or her to pack their belongings and leave. You want to ensure that the employee doesn’t access the company’s computer to send or destroy files — or to take or destroy physical files. Company supervision can help make the situation less tense and ensure that all company material is protected.
Be Kind, But Honest
In your termination meeting, don’t be cruel to the employee, and have compassion while delivering the news. However, it’s important not to sugarcoat the information. Be straightforward about their firing, as well as the reason they are being let go. This will help ensure that the firing comes across fairly and clearly — and also that an employee doesn’t become too angry or upset at the office.
Don’t Forget to Prepare
Before you have a termination meeting, prepare well first. Gather data that supports the termination, have a witness or several to be at the meeting and prepare yourself to have a difficult conversation. If you prepare for a termination meeting properly, the meeting may be difficult or uncomfortable, but ultimately, it will go as smoothly as possible.September 28, 2017
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Why Recruiting Firms Make Sense for Small and Medium-Sized Business
Small and medium-sized businesses compete with each other and large businesses for market share and building a strong customer base. They also compete with businesses of all sizes when looking for the most talented people to become their employees.
Many small businesses don’t have an HR department, and recruiting is done by the owner or business manager. This means that time usually devoted to building the business and making sure it runs smoothly is spent instead on recruitment and hiring,
Most entrepreneurs don’t have the experience, training and knowledge needed to recruit the best candidates. Using a recruiting firm can make all the difference.
Benefits of Using Recruitment Firms for Small Businesses
There are several ways recruitment firms help in the recruitment process:
- Keeping the recruitment process legal is one of the most important benefits small and medium-sized businesses gain when they use recruitment firms. A recruitment firm has the needed experience to avoid asking prohibited questions, and it makes sure the prospect signs off for background and credit checks.
- Recruitment firms advertise on your behalf if they don’t have enough qualified candidates on their roster.
- Recruitment firms save employees money. They advertise, interview, run background and credit checks, and free up your time to run the business.
- The prospects sent to you by a recruitment company are candidates, not applicants. The difference is you only interview and hire the most qualified person for your open position.
- Employees hired through a recruitment process tend to remain on the job because they are a good fit. When a company hires on its own, turnover is higher — and high turnover translates to higher costs.
Tips to Get the Most From a Recruiting Firm
Following are a few tips for getting the most from a recruiting firm:
- Look for companies that specialize in your industry. A recruiting firm that specializes in finding engineering prospects is probably not the best choice if you are looking for an accountant.
- Be explicit when explaining your needs to the recruitment company.
- Though most hires sourced from recruiting firms do work out, occasionally they don’t. The best recruiting firms know this and have processes in place to make things right.
Businesses have many reasons for hiring a recruiting firm, including saving money, improving the hiring process and reducing turnover. When you are choosing a recruitment firm, use the same due diligence you would when seeking a small business loan.September 18, 2017
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Three Things to Know About Independent Contractors Vs. Employees
Growing companies are increasingly turning to independent contractors as a way to cut costs. These business owners may be seeking to save on benefits packages or trying to avoid a large permanent payroll. While independent contractors can provide flexibility, there are substantial penalties if you don’t use them properly.
Why Independent Contractors Are Different
When you hire an independent contractor, you’re considered to be hiring another business, not an individual employee. This means that you deal with an independent contractor in a similar manner as you would a corporation you signed a contract with or a service professional who you visited in their office.
Because you’re dealing with a business, not an employee, typical labor laws, such as overtime, tax withholding, workers compensation and termination procedures, do not apply. As a general rule, you can do anything not prohibited by your contract.
When You Can Use an Independent Contractor
Independent contractors have typically been considered skilled professionals who provide services that aren’t part of your normal operations. Think lawyers, accountants and, in modern times, programmers. There are many other possible services that independent contractors can provide, but the key consideration is that they complete a task with limited training or oversight by you.
If you find yourself providing extensive training or step-by-step directions to a person you’re calling an independent contractor, you may be misclassifying an employee.
What Happens If You Misclassify an Employee as an Independent Contractor
The IRS is one of the biggest enforcers of employee vs. independent contractor classifications, because misclassifying an employee as an independent contractor means you aren’t withholding payroll taxes and the IRS isn’t getting paid. If the IRS determines that an independent contractor should have been classified as an employee, the minimum penalties include paying the back taxes plus interest and penalties.
In addition, business owners and other responsible officials may be personally liable for unpaid payroll taxes even if the business is a corporation or an LLC. For egregious violations, criminal penalties may also be imposed.
Don’t think independent contractors are right for you but need to free up cash flow to hire employees? Discuss your options with Merchant Capital Source today.September 13, 2017
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Financial Tips for Small Business Owners
Coming up with a financial plan for a small business involves time, creativity and resourcefulness, especially when working with a small budget. Entrepreneurs often lack the financial business savvy that larger companies benefit from, so starting out with a stable budget and sticking to it is critical for long-term success. Here are a few tips to get you started on your journey.
The reasons for accessing emergency funds are numerous and can include personal disability, negative publicity, natural or man-made disasters, and loss of inventory. Short-term business loans a better option for handling these unexpected emergencies. They can be deposited far quicker than a large traditional loan and can offer multi-year repayment options.
Keep your emergency savings account separate from your regular expense account. This will help you resist the temptation to dip into it for regular operating expenses. A good rule of thumb to follow is to have six to nine months of savings to tide you over in the event of emergencies.
Cloud Computing Solutions
Migration to cloud computing is becoming a serious trend for small business owners. An Intuit study has predicted that 80 percent of small businesses will have migrated to the cloud by 2020.
Savings can be realized by a reduction in IT requirements for infrastructure, including servers, physical storage, maintenance and upgrades.
Workplace collaboration is much more efficient. The ability to access and modify documents from a master copy for all employees saves time. In addition, the web-based software allows you and your employees to access data from anywhere and at any time.
The ability to integrate with other specialized services such as cloud-based marketing and accounting packages is a great feature that will leave more time to focus your time where it matters, on running your business!
According to a recent BMO Wealth Management Survey of 400 small business owners, only a fraction are prepared for retirement. A financial advisor can help you determine what your retirement needs are and ensure you have investments in a diversified portfolio.
Many 401(k) providers are now targeting small businesses and provide low-cost plans for businesses with fewer than 100 employees. It’s a great way to attract employees and help them plan for a successful retirement.
Seek Out Discounts
When paying an invoice, always take advantage of discounts offered if it’s paid early and be aware of late payment fees so you can avoid those at all times.
Check with your vendors to see if discounts are offered. For example, they may be available if merchandise is bought in bulk or payment is made three to six months in advance.
Just as bundling home services such as internet and cable with one company can result in savings, the same can be realized for a small business. Review your insurance plans and your telecommunications and internet providers to see if you can leverage savings through this option.
Hire Professional Help
Sometimes it’s necessary to consult with professionals to avoid unnecessary financial mistakes. An adviser with tax planning experience can help you realize tax savings and has knowledge of possible tax rebates. When you’re filling out an application for a small business loan, a financial adviser or accountant can provide assistance to ensure the right information is being communicated. This information can be critical to obtain approval of funds.
Preparing a business plan can feel overwhelming, but enlisting a professional can provide accurate financial projections leading to a far greater chance of your business succeeding and thriving.
Following these tips will help you stay organized and focused on operating your business. They are important elements in navigating your entrepreneurial journey and avoiding common mistakes that many small business owners make.September 7, 2017
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HR Should Help Find Balance Between Entrepreneurial Spirit & Structure
Human resource administrators are tasked with a seemingly endless variety of responsibilities. From recruiting to training and everything in between, HR is the backbone to any successful organization, no matter its size, mission or industry. In a dynamic marketplace that is constantly pushing companies to streamline operations and make their businesses more efficient, HR is also responsible for creating a tone and structure within the workplace that fosters an entrepreneurial spirit while establishing a healthy, cooperative and team-oriented environment.
While those two ideals can be difficult to balance, they are in no way mutually exclusive if a few key points are recognized and infused into the office environment. Once that balance is found and maintained, the entire organization benefits with the innovation and forward-thinking mentality provided by an entrepreneurial perspective. When coupled with the proper office structure, companies can maintain healthy, robust work environments.
The Proper Mindset Starts at the Top
As companies grow, adopting a more structured workplace occurs naturally as part of the typical corporate evolution process. While there are obvious benefits to such a process, creating a uniformity that lends itself to greater efficiency, it can also be tremendously stifling to innovative thinking.
To combat a company-wide sense of malaise, executives should not only preach a dynamic mindset but put it to use with incentive programs and open lines of communication. Humans are naturally motivated by incentives such as recognition and monetary rewards and thrive within systems that promote desired outcomes. Executives need to establish programs that delineate clear lines of communication among departments and deter employees and supervisors from developing the foreboding sense of repudiation that is so common within growing companies.
An incentive program that rewards employees for maintaining a perspective that doesn’t necessarily stay in lockstep with an overbearing corporate mindset can be crucial in creating a workforce that isn’t afraid to voice new ideas and never stops trying.
An Open Office Atmosphere
Likewise, the office environment itself can be pivotal in developing an entrepreneurial spirit throughout the organization. Giving employees work stations that are more interesting than an infinite row of cubicles can be extremely beneficial in creating a balance between productivity and imagination. Flexible schedules, telecommuting and similar benefits can also enhance innovation by allowing employees to maximize their individual creativity and efficiency.
Of course, every company is different, and what might work well for one organization could be an unmitigated disaster for another. The most important notion to keep in mind is that the vitality and entrepreneurial spirit that exists in every workforce needs a certain degree of freedom to truly shine. When it does, the entire organization benefits.July 7, 2017
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5 Helpful Tips for Managing Remote Employees
There’s no doubt the workforce is changing today, with more companies allowing employees to work remotely or from out of the office. In fact, today, more than 23 percent of employees do at least some of their work remotely. Despite the benefits of allowing employees to work remotely (boosted productivity, greater employee happiness), managing them can be more challenging than managing employees in-office. However, there are some helpful tips you can keep in mind to ensure that your team is engaged, cohesive and productive.
Use Video Technology
Video conferencing technology like Skype and FaceTime has made it easier for remote teams to have meetings. Studies have shown that only 7 percent of human communication is verbal (the rest is nonverbal cues like gestures, glances and so on), so video meetings can help ensure everyone is on the same page. Try having weekly video meetings in order to make sure that everyone is communicating well and that the team stays connected.
Have In-Person Meetups
Even though remote workers aren’t required to be physically in the office, it helps bond teams together and make people feel like they’re a part of a company if they get to meet in person every so often. If your employees are scattered across the world, try having a meet up once or twice a year. If people all work in the same city or region, try having everyone meet once a month. In-person meetings strengthen the bond between team members, and they can help boost morale.
Send Company Swag
Remote employees can feel disconnected from the organization they work for. To build a sense of loyalty, send them company swag, like letterhead, pens, T-shirts and so on. Swag can help make them feel like they are part of the group, and it can also help them feel more professional.
Don’t Always Talk Work
Most likely, if you’re communicating with a remote employee, you’re talking about work-related topics. However, talking about things other than work can help build a good rapport between managers and employees. When communicating with your remote employees, ask them about how they’re doing and make a little small talk. Having a good relationship with your employee that extends beyond simply discussing work tasks will help build trust and loyalty and will make work a more pleasant experience for everyone involved.
Let Them Know They’re Valued
Every so often, make a gesture so that your remote employees know that they’ve done a good job. Send a small gift card or flowers if they’ve finished a big project, or send out a company-wide email acknowledging a job well done.
Managing remote employees can be challenging, and it requires different skills than managing employees in the office. However, with a little time and effort, the arrangement can work well for both employees and their employers.June 29, 2017
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Should You Stand Alone or Join the Masses? Where to Sell
E-commerce sellers face the choice between trying to take advantage of existing marketplaces like Amazon or building their own store. Which path is best for you depends on your business goals.
Amazon claims over 300 million active user accounts. As soon as your product launches, you’ll be shown in search results, category listings and recommended product pages.
To get people to your own online store, you’ll need to invest in pay-per-click advertising, social media marketing or some other marketing strategy. Even if you have the cash to fund a large campaign, building up your own following will take time.
Building Your Brand
Online retail platforms aren’t geared towards allowing brands to stand out. Instead, their goal is to make customers think to come to their site first, and then customers pick out individual products based on reviews and pricing. Customers may or may not remember your brand when it’s time for their next purchase.
When you have your own store, you have total freedom to build your own identity. Instead of saying “I got it on eBay,” customers say “I got it from [your company].” That sends referrals and repeat customers straight back to you.
Sellers on online platforms have been plagued by copycats. Successful products are often quickly duplicated with cheap imitations that are listed alongside the original. Even if you have full trademark or patent protection, the process of having the imitators taken down can be time-consuming and expensive.
Having your own store doesn’t stop imitators, but when customers are already going to your own store, it isn’t as easy for the imitators to get their knockoffs in front of them. In addition, your brand identity and reputation for customer service can help put you ahead even when customers are aware of the cheaper options.
Using online retail platforms can make sense when you’re focused on mass-produced items and price competitions, but when you need to create your own identity, building your own online store is a wise investment. While it can be costly to get started, a small business loan can help you cover those costs while you grow your store into a source of sales that will return many times your original investment.June 28, 2017
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Three Ways to Deal with Conflict in the Workplace
Workplaces are diverse environments. They often have lots of employees, who come with different personalities, work tendencies and backgrounds. Conflict is bound to arise! Here are a few tips on how to deal with conflict in a healthy way:
1. Peer Mediation
This type of conflict resolution was first developed for teenagers, but it is also valuable in a work environment. Instead of a top-down supervisor approach, install a peer mediation system in your workplace. A trained, impartial third party in the human resources department can do wonders to solve conflict. Both parties are able to meet and discuss an issue without the fear of a supervisor’s judgment. Human Resources representatives can offer a private, safe place for employees to resolve their conflicts.
2. Personal Responsibility
Instill a culture of responsibility in your work environment. Let your staff know the issues that require a supervisor or a third-party mediator and the ones that can be dealt with by themselves. Instead of a battle of wills, encourage your employees to take ownership of their conflict. Have them listen in order to understand all sides, and ask the difficult questions: What can we do to help this situation? How can we make it better? By putting the responsibility in the hands of your employees, you allow them to solve conflict on their own. When employees deal with conflict themselves instead of running to a supervisor, they’re communication and personal responsibility skills improve. Which means that they will be less likely to have conflicts in general and will pick their battles in the future.
3. Stop Conflict Before it Starts
As a supervisor, you should be doing everything you can to foresee tense situations before they arise. Do you have a big personality who runs over everyone? Be up front with him or her, and communicate your expectations. Offer specific guidelines on how to help with a work project. When expectations are clear, there is less chance of miscommunication, meaning less conflict.
Nip conflict in the bud! With these helpful tips, you can stop conflict before it starts and handle any that does crop up in a positive way. It’s up to you to create a happy and healthy environment in the workplace.June 9, 2017
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The Cost Of Convenience
We’re all willing to pay a little extra for the sake of convenience – whether that’s buying an Amazon Prime membership so that we can have our purchases delivered the day after we make them, or stocking up on ready meals to cut down on the time we spend in the kitchen. There are even a number of subscription services (Graze, Gousto and the like) for time-strapped individuals who don’t have a spare moment to sit down and plan out a healthy diet.
But how much does convenience cost us – and is there a point where it really isn’t worth its while? Let’s take the example of pre-made sandwiches. If you’re short on time when it comes to lunch, spending three dollars on a sandwich might not seem like such a bad deal – especially when there are more expensive options available. However, break down that sandwich and cost out the constituent parts and you’ll likely find that making the same meal yourself would have cost slightly less than a dollar.
In the example above, you pay approximately two dollars for the convenience of not having to make and transport your own lunch. Is it worth it? Maybe. It depends a lot on how much you value your time. Let’s say that making your own lunch each day adds an extra ten minutes to your morning routine. Those ten minutes save you two dollars, which makes the hourly rate of your savings twelve dollars. If you rate your time as worth twelve dollars or less, then you’re effectively making a saving by making your own sandwich. If you consider your time to be worth more than twelve dollars, by all means grab lunch on the road.
Coffee is another fine example. Most people won’t hesitate to pay two dollars or more for a fresh cup of coffee in the morning, but by some estimates they could be paying anywhere from ninety cents, to one dollar ninety cents just for the convenience of getting their morning brew made for them at their local Starbucks. That may not seem like much in isolation, but assuming they drink just one cup every working day, the total savings they might make by brewing their coffee at home could be as much as five hundred dollars per year.
Of course, this numeric approach isn’t perfect – convenience isn’t just about saving time, after all – but it’s a useful thought experiment to determine whether the little conveniences that you pay for on a daily basis are worth it after all. It’s surprising how much small expenses like this can mount up, and when you look at the figures you’ll likely be surprised by just how much you’re paying for convenience.
The solution to a hefty convenience bill is not, however, to cut back on all of these luxuries. Few people have the time or patience to make their own orange juice, do their own dry cleaning, or patiently put together nutritionally-balanced meals each day. Instead, consider examining each convenience and consciously deciding whether it’s worth the money it costs. The internet abounds with convenience items that are obviously not worth the added expense – cut these from your daily life, while preserving those that genuinely save you time and energy and you could be on the road to significant savings.May 31, 2017
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The Six Most Common ‘Bad Boss’ Habits
Most employees have at least one horror story about an awful boss they had to deal with at some point in their career. Indeed, a recent survey by Monster saw more than a third of respondents rate their boss as “horrible” or worse. With that stark statistic in mind, how can you tell if there’s a bad boss wreaking havoc in your company? Here are six warning signs that you shouldn’t ignore.
1. They’re Never Wrong
However good a manager is at their job, they cannot possibly be perfect. If they never seem to put a foot wrong forward, consider whether it’s due to their unrivalled talent, or simply because they’re offloading their failures and missteps onto the employees beneath them.
2. They Manage Everything
Even some of the better bosses fall into the trap of micromanagement. Apart from being an inefficient use of resources, micromanaging can make employees feel as though they have no control or responsibility, and it can negatively impact their performance.
3. They Take All The Credit
The polar opposite of the boss who blames their mistakes on their employees, the credit hog instead soaks up all the acclaim for any projects that go well. If the recognition for the achievements of a team is being lapped up solely by their manager, it might be time to intervene and make sure that everyone who contributed gets their fair share.
4. They Have Favorites
It’s important for a manager to be at least somewhat impartial. Although they’ll naturally have varying relationships with the people on their team, it’s crucial that they don’t discriminate or pick favorites. A good boss should be able to treat everyone who works for them equally, regardless of their personal feelings.
5. They Don’t Help Their Employees Grow
One of the things that great bosses do well is to cultivate their employees. Ineffective managers, on the other hand, will often be too lazy or disinterested to even think about helping their workers grow in their careers — and might even be afraid of allowing anyone to advance in case by doing so they make themselves obsolete!
6. They’re Tetchy
All of the above traits are bad, but by far the most destructive habit a boss can develop is a bad temper. Negativity, anger and unpredictable behavior not only make for an unpleasant atmosphere, but also a workplace that any sensible employee will want to flee as soon as they can.May 24, 2017
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8 Questions You Cannot Ask In A Job Interview
The political climate in the U.S has become much more pervasive, and people are not afraid to sue when they are offended. This attitude has permeated much of society and has inspired a series of laws that make certain types of interview questions illegal. A well-prepared candidate knows what an interviewer can and cannot ask and utilizes that information to keep the interview focused on getting the job.
Any Question Regarding Marital Status
Companies have a lot of reasons for wanting to know a candidate’s marital status, but asking about it in an interview is illegal.
Any Question Regarding Age
Many tech companies are fixated on creating a young and dynamic staff, but they will have to do that without asking about age. There are several federal laws in place that make it illegal for companies to ask about or discriminate against workers based on age, religion and sexual orientation.
Any Question About Finances
Most companies get around asking about finances by pulling a credit report on candidates prior to the interview. In some instances, questions about finances are legitimate because the job may require the candidate to handle money. But in general, companies are not allowed to ask a candidate about their finances.
Have You Ever Been Arrested?
Candidates need to understand that employers can ask about past convictions, but they cannot request a full arrest record.
Any Question Pertaining To Health
The rising cost of health insurance makes companies conscious about bringing on new employees with health problems, but the truth is that a company cannot ask about your health in an interview.
Your Social Habits
Employers may look up a candidate’s social media handles, which is a widely accepted practice in the corporate world. But a company cannot ask you about your social habits such as where you vacation, your drinking habits and the friends you keep.
Any Question About Political Preferences
Politics has become a hot topic that polarizes people in many ways. As interesting as politics may be, an employer cannot ask about your political preferences in an interview.
Any Question About Location
If an interviewer asks a candidate where they live, the candidate does not have to answer that question. Some companies try to avoid hiring candidates from certain neighborhoods or districts, and that is why asking about location is illegal.
A candidate wants to keep a job interview focused on the job and whether or not the interviewer feels the candidate is qualified. When the interviewer tries to get off-track with illegal questions, the candidate should stand up for their rights and keep the discussion focused on the available position.May 17, 2017
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5 Businesses That Can Benefit From Leaderboards
A growing trend among small businesses and franchises is the sales leaderboard. This employee incentive mechanism brings a little gamification theory into the workplace. There are many examples of businesses that could benefit from employee leaderboards.
Below are five such examples — some which might surprise you!
1. Clothing Stores
A clothing store can be a big success or fail, and it all comes down to who is on your team. Some employees will do the bare minimum, while others will work with potential customers to fulfill their needs. That extra initiative often goes unnoticed.
If you own a clothing store, a sales leaderboard will help you become more aware of your top staff. There’s a big difference when sales suddenly go up 15 percent in the first week. Remember, clothing stores typically don’t pay commission — but employees can drastically influence sales.
2. Grocery Stores
A busy grocery store suffers when a cashier decides to work at a slower pace. After a handful of slow cashiers are on board, the company suddenly needs to hire more staff to keep up with the customer demand. It is unfortunate and unnecessary.
An employee leaderboard can work well for a team of cashiers. You can shift the focus to be on the person’s average cashout time. Use whatever metrics you need, but focus on rewarding the specific good working behavior you want to see more.
3. Call Centers
Call centers already give out prizes to top-performing staff on a regular basis. Imagine having a scoreboard that tracks the sales performance of each employee in real time.
You could have daily, weekly or monthly leaderboards. There could also be different teams, so you compete as a group and have coworkers there to egg you on.
4. Oil Change Place
Oil change companies see a mixture of motivated and unmotivated workers. Often, the turnover in this line of business is higher than you’d expect. The upsells are a big part of the shop’s bottom line, though.
Why not utilize an employee sales leaderboard? These workers are typically on commission for any upsold products anyway. The graphical presentation will keep the team pushing through the week — instead of getting bent out of shape anytime a sale attempt fails.
5. Hair Salon
A salon’s profit margins are dependent on the average time per cut of each employee on the team. You can control workflows, such as by making rules on who takes the next walk-in client. But the only way to see improvement is to create incentive that’s based on better performance. You could award for average cut time, referrals, product upsells and more.May 4, 2017
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Why You Shouldn’t Pay for ‘Debt Relief’
By Steve O’Connor
As a business owner, you’re well aware that even a solid business plan and a great product won’t protect you completely from unexpected downturns. Markets change, your costs can rise — and suddenly, you’re struggling to meet your obligations. This is when you may start noticing sales pitches from companies that offer a quick and easy solution to your stress. Here’s a closer look at how those dangerous scams work, and why they represent a threat to your financial health.
How ‘Debt Relief’ Companies Work
Hoping to lure business owners with phrases like “debt relief,” or “corporate credit counseling,” these companies advise you to break your agreement with your funding provider (like Merchant Capital Source), and stop all further payment. They promise that if you let them negotiate on your behalf (for a fee, of course), they’ll reduce your payments by 50 percent or more. These con artists even suggest that their special magic can reduce the overall amount you owe. Meanwhile, they have no stake in your financial success because they earn their income from the fees you pay them for their “services.”
Why These Offers are Dangerous
Once you get past the rosy sales language in the pitches, you’ll discover some alarming fine print. Debt relief companies are usually careful not to guarantee any actual results in exchange for the fees you pay them. We’ve even seen some of these so-called advocates convince business owners like you that they’re working on your behalf — and then never even contact us. That’s not a service at all — it’s just dishonest. Meanwhile, you’re left with the same obligations you had previously, and while you thought you were acting responsibly, your funders have heard nothing but crickets.
Scam Debt Restructuring in the News
We were saddened, but not surprised, to learn of a New York case in which several people were arrested for defrauding small business owners with promises of debt relief. In one instance, they told a business owner they could reduce the amount she owed by 75 percent in just two days. Using dozens of different company names, these scammers convinced over 100 entrepreneurs to provide access to their business bank accounts. Drawing out weekly payments (amounting to over $1 million total) from these accounts, the “debt relief” agents never contacted any creditors or acted on behalf of the business owners in any way. They merely pocketed the cash until their scheme was detected by the Department of Justice.
Another recent example involves a fake legal services company that charged a merchant $100,000 to supposedly eliminate $400,000 worth of debt. However, when the retailer was sued by their funder for nonpayment and subsequently hired a real lawyer, they found that the so-called “legal services” weren’t even licensed in the region. Furthermore, the supposed “debt” was actually a negotiable merchant cash advance and the scammers had never even contacted the funder.
We’re Always Here to Talk With You
At Merchant Capital Source, we’re committed to supporting you. After all, we’ve already advanced funds because we believe in your business. We wouldn’t risk our money if we didn’t. If you encounter financial distress, just let us know. Our agreement with you allows you to ask us to adjust your daily remittance to us. But we simply will NOT negotiate YOUR agreement with a company who has not invested their money right along with yours, like we have — and who may be engaging in fraudulent activity.
Here’s our promise to you — and it’s a promise you can bank on: If your business is experiencing hard times, we’ll work with you to find a solution. There’s no need to involve a fraudulent outsider who merely pockets huge fees and encourages you to break your word. If you’d like to talk with us about this, just give us a call anytime at (866) 969-7878.May 2, 2017
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5 Reasons Your Best Employees Will Quit
Company turnover can be the kiss of death for an HR department. Make sure you keep your rising stars from orbiting to another company. Avoid these top five typical pitfalls to ensure your key players stay right where they are.
Reason #1: The Manager
Believe it or not, one of the most common reasons that employees leave companies has nothing to do with the company itself and everything to do with the manager of the company. A manager’s most important job is to keep their A-players happy, and if they fail to do that, they will lose said A-players.
Reason #2: Undervalued, Overworked, Underpaid
We understand that small businesses may not have the budget to pay their employees top dollar, but that doesn’t mean that you have to pay them less than they deserve. Likewise, if your top employees have talents that aren’t being utilized or they’re being made to do grunt work that’s beneath their station, you stand a good chance of losing them.
Reason #3: Your Company Culture Isn’t Conducive
Even if you’re a small business, there’s absolutely no reason to create a culture of disrespect. While weeding out your company’s worst employees sounds like you’re downsizing, it’s worth it if you’re keeping your A-level employees happy. A culture of disrespect will lead to many of your “good” employees quitting.
Reason #4: They Got an Offer They Couldn’t Refuse
Yes, there are plenty of employees who leave because of financial reasons. But there are just as many who leave because, in addition to the financial reasons, they got extrinsic offers as well — a better company culture, additional perks, a healthier office environment. All of these are just as important to many employees as a good salary, so be sure you’re keeping them happy in as many ways as is financially possible for your company.
Reason #5: There’s No Proper Communication
Career coach Tanya Ezekiel warns about the dangers of lack of proper communication and gives tips on how to solve the problem. “The key is to be self-aware. Delegate to empower, speak with (not to) your employees, listen to connect, acknowledge their concerns and ask questions to find out how to keep them happy,” she said.April 25, 2017
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Recruiting in the 21st Century: Trends for 2017 And Beyond
The recruiting process of the 21st century is worlds away from the recruiting process of the previous century. Let’s take a look at some of the biggest trends in recruiting and what professionals can expect of recruiting trends in 2017 and beyond.
Prior to the 21st century, when people weren’t as dependent on technology, recruiters didn’t have to worry about whether their potential candidates were proficient in the latest technology. Today, however, not only do recruiters have to make sure their candidates have a good grasp on technology, they have to train potential candidates in any area of technology where they may be lacking. In fact, many 21st-century recruiters hire experts in cloud computing to integrate cloud applications, mobile devices and social media.
Further along the lines of increased technology, today’s recruiters have to be more globally minded than in years past. If a company, for example, has offices in other countries, it’s up to the recruiter to hire and train the staff abroad. What’s more, a stateside recruiter has to make sure that potential hires understand that if they go to work for an international company they may be recruited to work for another part of the company outside the United States.
Over the past 20 years, the definition of diversity has changed tremendously. The so-called “changing face of America” has made it so that the default standard is no longer white, middle class and male. With that diversity, however, comes a change in recruiting approach. Race — and culture — play an important role in everyday life, and if recruiters wish to get the so-called “diversity” hires, they are going to have to change their approach tremendously.
These are just a few of the many trends that have emerged amongst recruiters in the 21st century, and there’s no question that these trends will play an ever-increasing role in hiring new candidates beyond the 21st century. What have you, as a recruiter, noticed as an emerging trend? Leave your thoughts in the comments below.April 19, 2017
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What Makes a Repeat Customer in the Service Industry?
People go out to dine because they want all the elements of a memorable experience. And those working in the restaurant service industry know that repeat customers are those who feel happy and comfortable when they enter the restaurant.
But just how does one keep those customers happy? Well, it’s one of the oldest secrets in the book: The customer is always king. And the ones serving them don’t ever forget that.
Here are three ways to keep your customers coming back for more:
Timely Table Service
It’s all in the finest details. How do you treat your customers? The most renowned restaurant managers know that giving their clients the service they expect is a No. 1 priority. First impressions are also lasting ones. If the guests are seeking an intimate experience, the service doesn’t have to be fussy. But it does have to be on time, and immaculate. Menus should be offered immediately; drinks should be delivered at the soonest possible time.
Restaurant Standards and Cleanliness
If it’s all about the experience, then the level of your restaurant’s standard will be a huge factor in getting repeat customers. Make sure your level of cleanliness is on par with your clients’ expectations. Otherwise, chances are they won’t be setting foot in your establishment again.
How to Handle Customer Complaints
Addressing complaints is no fun, but it must be done promptly, and with finesse. As politely as you can, try to address the guest’s complaints and concerns. Whether or not the complaint is valid is not the point. How you handle it is.
When customers go out of their way to complain, it’s not always a bad thing or a sign of failure. If handled correctly, not only will you get repeat customers, but they will likely tell their friends about their experience. And you could gain a few more patrons.
The service industry is not an easy or straightforward one. You’ll be dealing with all kinds of customers and their wishes. But if you keep these three things in mind, you’re on the right road in this industry.April 10, 2017
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Alternative Financing: What It Is and Why Banks Fear ItAs alternative financing continues to migrate from the fringes of the finance world to mainstream awareness, new opportunities emerge for those typically shunned by conventional institutions, as well as those seeking local and more progressive funding sources. Ever-growing in number, alternative financing models extend capital and cash to millions while inspiring fear among some in the traditional world of finance.
Alternative vs. Traditional FinanceThe financial channels and instruments labeled “alternative finance” include investment, donation and reward crowdfunding, microlending, and marketplace peer-to-peer lending. These have emerged as alternatives to the traditional banking system, which includes regulated mainstream banks and capital markets. Examples of traditional financing include bank loans, payday loans, Small Business Administration loans, home equity loans, venture capital, credit cards, charitable grants and equipment leasing.Mainstream banks use depositors’ money to fund investments at their discretion, with individuals having no control over, or even knowledge of, the investments. In contrast, alternative finance investors usually invest in a specific, chosen project. Alternative finance allows greater transparency into where people’s money is and what it is being used for.
Common Alternative Financing Examples
- Crowdfunding: Crowdfunding, in which large numbers of people contribute small amounts of money toward a specific project, can be based on donations, equity or rewards. Reward-based crowdfunding, the second largest category of alternative financing, provides backers a nonfinancial reward in exchange for funds.
- Peer-to-Peer Lending: Groups of individuals support a business venture by providing unsecured personal loans in exchange for a return on that investment over time. It’s the largest category of alternative financing.
- Microfunding: Small amounts of money are loaned to small businesses or entrepreneurs, often in economically disadvantaged areas. These sums are significantly smaller than the minimum banks will fund.
Scope of Alternative FinancingAs traditional banks increasingly favor established companies, customers with bigger bank accounts and loans of higher dollar amounts, alternative finance companies are filling the gaps. Though alternative finance isn’t exactly new – the first online peer-to-peer lender, Zopa, was founded in 2004 – its market volume has increased exponentially in the past few years, and this growth is expected to continue. According to research:
- In 2015, the market volume in the Americas jumped from $11.4 billion to $36.49 billion, with $36.17 billion of that volume in the United States alone.
- Use of alternative finance methods in North and South America increased from 2014 to 2015 by 212 percent.
- In a two-year period, online alternative finance platforms provided more than $10.8 billion worth of capital to over 268,000 small businesses and startups in the United States.
Factors Influencing the Rise of Alternative Finance
Factors contributing to the rising use of alternative finance options include the economic crisis that occurred around 2008 and an ever-advancing level of technology. Specifically:
- After the recession that followed the housing market meltdown, small business owners find obtaining credit or capital even more challenging, as banks apply more stringent criteria and favor large companies and large loans. Banks deny more than 80 percent of small business loan applications.
- Technological advances extend to the finance world, too. Emerging technological innovations in the financial sector, dubbed “FinTech,” allow for online collection of information, near-instant analysis of lending criteria and extremely fast authorizations, credit checks and financing approval. FinTech also connects crowdfunding platforms to people across the world and expands the network of peer-to-peer financing sources, rapidly and easily connecting those in need of money with those wishing to invest.
Alternative finance companies threaten the traditional banks’ business models, as well as their market volume. As world technologies and consumer expectations continue to evolve, so must the banking industry.April 6, 2017
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5 Reasons to Outsource Your Accounting and Bookkeeping
Small-business owners are faced with lots of challenges when trying to accomplish big goals with minimal resources. One of those challenges is whether to outsource various services, including accounting and bookkeeping. Many small-business owners opt to hire an outside firm to manage their accounting and bookkeeping services. Here are five reasons why you should consider outsourcing them too.
1. You’ll Save Money
Saving money is the number one reason many small businesses outsource accounting and bookkeeping services. Until a business reaches a certain size, it makes sense to outsource these services. Why? An employee managing accounting might make $50,000 in salary, but when you tack on benefits and overhead, that number increases to upwards of $78,000. Outsourced accounting can cost a company less than half of that.
Since every dollar you save helps prevent taking out another small-business loan — or allows you to apply funds from a current business loan to something that will generate a return on investment — outsourcing accounting can greatly impact the bottom line.
2. You’ll Have Experts at the Wheel
As a business owner, it can be hard enough for you to keep up on the trends in your own industry, let alone best practices in a whole other industry. Since the accounting and bookkeeping world changes rapidly, it takes a dedicated person to understand and navigate those changes — especially because mistakes in the accounting world can be detrimental to a small business. It’s best to have someone seasoned and in-touch with industry changes leading the charge.
3. You’ll Have More Time to Spend on Things That Matter
While some business owners see this task as simply tracking expenses or accounts receivable, quality bookkeeping underlines a company’s financial infrastructure, and it takes a lot of time. Leveraging experts and outsourcing these services to an outside team can free up your time to stay focused on things that matter, like growing your own business.
4. Your Team Can Stay Focused
In a small business, where every team member is taking on responsibilities outside of his or her job description, it can be easy to pass off or share the accounting and bookkeeping responsibilities. These tasks, however, serve as a distraction from the responsibilities that will help grow your business. It’s best to leverage your team members’ strengths and keep them focused on their roles, and let an outside firm handle accounting and bookkeeping.
5. You’ll Have Access to the Latest Technology
With how quickly technology changes, it can be both difficult to know what your accounting and bookkeeping tool options are and time-consuming to determine which is right for your business. An outside firm, however, has the infrastructure in place to manage your accounting and recommend the right tools for your team.
Leverage the industry knowledge of a specialized accounting and bookkeeping firm to be sure you’re using the best tools for the job; that alone can save you time and money in addition to what you’re saving by outsourcing these services.
If you think outsourcing your company’s accounting and bookkeeping needs might be right for you, contact three to four providers in your area who can give you quotes. Also consider selecting an accounting and bookkeeping firm that aligns with your company’s values and culture, as the outside firm will become part of your team.April 5, 2017
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5 Questions Every Retail Manager Needs Answers to During an Interview
Working in retail is unlike working in any other industry. It requires organization, a friendly manner, an ability to work under pressure and multi-tasking skills. As most retail managers have only a few minutes to interview job candidates, they must gather as much pertinent information as possible very quickly — by asking these five questions.
1. What Does Our Brand Mean to You?
It is usually very easy to find candidates for retail jobs, but finding candidates with a passion for retail is a different matter. If a candidate can demonstrate a passion for your retail business, the chances are this passion will rub off on other members of your team and, more importantly, on your customers.
2. What Would You Do Differently in Our Store?
Almost anyone can operate a till and take payments from customers, but not every candidate possesses sales acumen. Ask your candidates to walk around your store for a few minutes prior to the interview, and encourage them to make notes on areas that could be improved. A critical mind in retail is always very useful; and after all, a good idea is a good idea — wherever it comes from.
3. Have You Ever Had to Resolve a Customer Service Issue Yourself?
Customer service in retail is often about problem-solving, conflict resolution and proactive thinking. Every retail employee has to deal with irate customers from time to time, and they often need to resolve issues there and then. Ask the candidate to talk at length about a real issue he or she has dealt with in the past. What did they do to appease the customer? What was the outcome?
4. Have You Ever Received Fantastic Customer Service?
It is vital that retail employees know exactly what constitutes great customer service. Get the candidate to talk about a specific instance of fantastic customer service they’ve personally experienced. This should tell you everything you need to know about that person’s understanding of this essential area of retail.
5. Are You Flexible With Regard to Your Working Hours?
Things may go wrong and staff may go sick, but the retail show must always go on. In order to deal with contingencies, or to react to changing circumstances, you need flexibility in your workforce. A retail candidate who goes on the record to say they’d be willing to be flexible with regard to their working hours will make scheduling a lot easier for you.
If your candidate scores well in all five questions, you’ve probably found the ideal recruit for your retail business.March 27, 2017
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How Does the IRS Choose Who to Audit?
Each year, millions of people worry about getting audited by the IRS. While all of these people have a chance of being audited, some are more likely to be audited than others. The IRS uses four methods to determine which returns will be selected for additional examination.
Every tax return is run through a computer system that matches the return against other information such as W-2s and 1099s. If the information doesn’t match up, either because the filer left a form out of their tax return or entered different numbers, a human IRS employee will review the return.
In most cases, the IRS will simply send a bill for any additional tax owed. In others, it may send a letter asking for more explanation about why the return doesn’t match the other information. If the error is large or unusual, the IRS may choose to audit the entire return.
The IRS computers also compare each tax return against the returns of others in the same profession or income bracket. Taxpayers who report income well below the typical average or deductions that are well above the typical average may be flagged for further review.
There is nothing wrong with having a correctly completed return that doesn’t match the averages. The IRS is simply playing the odds on which returns are most likely to have underreported taxes.
If a review of one taxpayer finds underreported taxes, the IRS will often audit related taxpayers. Related taxpayers include the following.
- A business return and the owner’s personal return.
- Partners in a business even if the audit relates only to personal returns.
- Spouses filing separately.
- Parents and dependent children.
These types of audits typically focus on transactions between the related taxpayers but may expand to the entire returns if the examiner believes it is warranted.
The IRS also selects tax returns for audit at random. Every tax return has at least some chance of being selected, but the odds increase with the complexity of the return and the amount of reported income. The exact selection process is secret because the IRS doesn’t want tax evaders to be able to game the system.
Because you can never avoid an audit, you should always strive to pay as little in taxes as legally possible rather than taking steps like skipping deductions to try to avoid an audit. If you complete your taxes accurately and keep good records, you won’t have to worry about an audit even if you are selected.March 23, 2017
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What Does the Ryan Healthcare Plan Mean for Small Business Owners?
The Obamacare repeal and replacement bill proposed by Paul Ryan last year has been named the American Health Care Act and is working its way through Congress. Regardless of how you feel about the bill, it’s increasingly certain that it will pass so it’s time for small business owners to start planning for it. Here are the provisions that will have the biggest impact.
Elimination of the Employer Mandate
The bill entirely eliminates the employer mandate. Employers will no longer be penalized for failing to provide health insurance to employees regardless of the size of the business.
Employers will be free to choose whether to offer health insurance as a benefit.
Change From Income-Based Subsidies to Tax Credits
Obamacare’s income-based subsidies will turn into fixed-dollar tax credits based on age. The credits will range from $2,000 for those under 30 to $4,000 to those over 50.
This will impact the ability of sole proprietors to lower their health insurance costs. Under Obamacare, sole proprietors could offset their income using business losses or deductible retirement plan contributions to receive a higher subsidy. This option is no longer available with the flat-rate credits.
Repeal of Cadillac Tax and Medicare Tax Increase
The Cadillac tax on high-cost health insurance plans will be delayed until 2025, and Republicans intend to eliminate it entirely before that date.
The 0.9 percent Medicare tax on high-income taxpayers is also set for elimination. This tax currently applies to both employment income and business profits from pass-through entities such as sole proprietorships and partnerships. The 2.9 percent base Medicare tax will remain in place.
Repeal of Small Business Health Insurance Tax Credit
The small business health insurance tax credit will be repealed. This credit is currently available to businesses with less than 25 full-time-equivalent employees making an average of less than $50,000 per year. The credit covers up to half of the employer’s health insurance premium contributions for its employees during its first two years of offering health coverage.
Employer health insurance contributions will remain a deductible business expense.
What to Do
Business owners should immediately prepare a budget under the revised system to determine the financial impact of the changes. Business owners who plan to reduce or eliminate health insurance benefits once the mandate is repealed should begin working with their employees to ensure a smooth transition and negotiate appropriate adjustments to the total compensation package.
While the law will likely change before the final vote, the general framework is in place and forecasting for the worst-case financial scenario will leave you in a secure position regardless of the final outcome.March 21, 2017
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The Sunk Cost Fallacy and How to Avoid It
Imagine that you are a health-food fanatic and you own two juicers. The first is a top-of-the-line, brand-new model that many celebrities own. It cost you $1,000, and it looks fantastic in your kitchen. Your second juicer is a rickety, ugly, second-hand model that you picked up at a garage sale for $10.
You use both juicers equally, and over time you notice that the cheap machine turns out better juice and is easy to clean up. The more expensive juicer gives everything a metallic taste, and takes ages to clean.
Now imagine that, for some reason, you can only keep one of these machines. Which one do you choose?
If you said the $1,000 model, then you’re not alone. Most people would end up deciding to stick with the option for which they paid the most money, and which brings them the most prestige, even if the results it produces are significantly worse. This is an example of the sunk-cost fallacy, and while it’s amusing when it’s applied to kitchen appliances, it can be devastating in the world of business.
Real Example of the Sunk Cost Fallacy
Concorde, the world’s first supersonic passenger jet, was no simple project. It lasted over 20 years and two governments invested multiple billions into its development. For a large portion of that time, all parties involved knew that there was little to no chance of recouping the massive investment, and that the finished plane would not only have a lower capacity, but would also be more expensive on a per-mile basis than other contemporary liners. The project, by all accounts, made no economic sense and yet the project leaders went ahead regardless. Why? The governmental prestige that had been heaped onto the project was clearly an element in that decision, but it also came down to fear: Having spent so much time and money on Concorde, nobody felt as though they could give up before reaping some reward, however meager that might be.
That’s the heart of the sunk cost fallacy. Nobody wants to believe that they made a bad decision. And nobody wants to wave goodbye to money they’ve already invested.
How to Avoid the Sunk Cost Fallacy
So how do you prepare yourself to avoid this trap? As with many fallacies, nobody is completely immune, but in any project, there are a few simple steps you can take to dodge a sunk-cost nightmare. Here are three of them:
1. Discuss Failure
Even in the very early stages of a project, make sure to have failure on the table. Discuss it openly. Certainly avoid it if you can, but make sure that you and your team have considered what you might do if the project doesn’t come together. By considering this early on, you create for yourself a mental “emergency exit” that you can later use if things don’t work out.
2. Weigh Up the Cost of Carrying On
There is, of course, a cost to failure. Perhaps giving up on a project will make you and your team look bad. Perhaps it will cost the company money. Many people shy away from giving in because of these costs, but it’s important to weigh them up against the costs involved in carrying on as well. When you do so, you may find that giving up is a better and cheaper option than staying the course.
3. Make Mistakes Acceptable
Developing a culture in which it’s okay to make mistakes isn’t something that you can do overnight, but it’s a valuable step to take. When people in your organization don’t feel as though they’ll be punished for making mistakes, they are far less likely to try and cover up their errors with further ones.March 14, 2017
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Managing Your Millennial Workforce: How to Avoid Common Mistakes
We toss the term “millennials” around regularly, but who exactly are these people? They are likely a large percentage of your current workforce.
Millennials were born between 1980 and 2000. Millennials grew up surrounded by a diverse group and consider working in teams to be the most efficient. Their co-workers are also their friends.
What Millennials Want
Millennials like flexibility and want frequent feedback on their job performance. They expect challenges, and are confident in their abilities. They will seek leadership roles and may rebel if they become bored.
Working with millennials can be interesting, but may require a few specific adaptations to accommodate their unique character traits. Effectively manage your millennials and you’ll have a competent, trained employee pool for your business.
Keep It Structured
Millennials are most satisfied in an organized environment. They want routine monthly reports on specific due dates and stable work hours. When planning a meeting, keep it structured with a printed agenda, and be certain to take minutes. Business goals, large and small, should be clearly defined. There needs to be a tool for assessing progress. Define assignments and delineate the benchmarks that indicate success.
Put Their Attitude to Work for You
“I can do this” is the mantra all millennials recite. They apply this attitude to everything they attempt. They feel ready to conquer the world and believe they have the skills to do it. Channel that enthusiasm into a positive outcome for your business.
Let Them Multitask
Millennials like to multitask; in fact, they thrive on it. If they engage in a phone conversation while writing email and responding to instant messages, don’t interrupt them. And don’t panic; this is a normal fact of life for them. Without a variety of different tasks and goals to pursue each week, your millennials may lapse into boredom.
Go Heavy on the Technology
Millennials grew up with smartphones and social media. Use that skill to the advantage of your business. Your millennials have an affinity for networking and group activities, and this can be a plus for your business. They routinely network electronically around the world, and are popular employees because of it.
Give Them a Voice at the Table
Millennials have formulated their own opinions and ideas, and they don’t like feeling ignored. They want you to hear them and to take them seriously. Don’t leave them out of important decisions and projects.March 8, 2017
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Employee Engagement in the 21st Century
One of the most important things that an employer needs to understand is that his/her workforce, in the 21st century, is one of the most diverse that it’s ever been in history. And, because of the range of ages that are prevalent in the workplace, it’s important to engage these employees effectively, and not with a “one size fits all” method of engagement. But how and why should you do this?
The Importance of Employee Engagement
According to a report by the Human Capital Institute, employee engagement is one of the most important factors in determining how prosperous (read: successful) a business will be. Without employees that feel as though they are a part of the greater good of the company, the company will not survive.
“The workforce is no longer a ‘do-as-I-tell-you’ machine. Rather, it is a symbiotic collective that expects collaboration, candor, and courage. In return, organizations can reap the benefits of employee engagement and strengthen the relationships that impact their bottom line,” writes HCI.
How to Engage Employees
Regardless of the age of your employees, there are a number of ways to successfully engage them. For example:
Connect With Them
As a leader, it is your job to try to find not only the common ground that you share with your employees, but things that makes your employees “tick.” What motivates them to do well at their job? That is the question that you must get the answer to from every single person who works for you. Once you find out what motivates them, you can appeal to that motivation so that your employees can do a better job.
Be Clear About Your Vision for Your Company
“Success” is not defined in the same way by different leaders. If there’s something that you want for the company, make sure your employees know what it is. As they reach — and exceed — your goals, make sure you congratulate and thank them for a job well done.
Provide a Safe Space for Collaboration
Studies have proven that employees who are given a safe space to collaborate with others tend to work better than those who are not. In a team environment, employees can see who on their team has certain strengths to play upon, and maximize results.
Why Should You Engage?
Simply put, engagement is not only essential for your company’s success, but for your employee’s personal and professional success within the company as well.March 7, 2017
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Social Media for Recruiting : Do’s and Don’ts
When used correctly in a business setting, social platforms like Instagram, Facebook and Twitter can be powerful tools in the recruiting process —and not just in terms of weeding out candidates whose social media presences paint a less than desirable picture of a candidate (more on that later).Despite the benefits that using social media for both recruiting and attracting top talent can have, just 17 percent of HR managers currently use social platforms (apart from LinkedIn) in any part of the hiring process. Set yourself apart by being one of the small amount of companies that are using these tools to their full potential, beyond just creating a well-crafted social presence.
Do: Leverage Your Social Channels to Find Eager ApplicantsUnlike prospective employees who find your job posting on sites like Indeed.com, those who follow your social media channels are already aware of your brand, and likely already fans. Reaching out to your social media followers about a job opening first helps you pinpoint a group of people who are already aware of what your company is all about, and may already be eager to join your team. To find motivated people who are committed to your brand, look no further than your own follower list.Do: Reach Out To Potential Hires Via Social Media
Encourage your followers who are interested in applying to reach out to you via Instagram or Twitter’s direct messaging systems (or include an HR email address on your post.) The benefit of the DM is that you can quickly look at the interested party’s own social media page, and get an instant snapshot of who they are, what other companies they follow and how they brand themselves.
Don’t: Make Hiring Decisions Based Directly Off Candidates’ Social Media Accounts
While this practice is rising in popularity, the legal and ethical boundaries of making hiring decisions off of someone’s personal social media accounts are murky. Seventy-four percent of companies that choose not to use this method cite the reason of dubious legality. The danger here is that it may subject you to unintentional discrimination by exposing you to a candidate’s “protected characteristics” — such as race, gender or age — which legally cannot influence your decision.
Don’t: Forget to Maximize Your Social Presence First
Lastly, it’s important to note that the method of using your social channels to attract promising talent is dependent on how well-crafted those channels are. Before you put out the call for talent on Instagram, for example, make sure you’re putting your best foot forward on your own account. A robust and curated presence will attract followers, and, with the right strategy, future employees.February 21, 2017
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Do You Need an Accountant to Do Your Small Business Taxes? Maybe Not
Tax season is here. Do you need help getting the paperwork filled out and filed to fulfill your obligations? While many Americans have simple finances, it’s a good idea to seek professional guidance if you’ve had any major changes to your financial life this year. For example, if you bought a home, took out a small business loan for a new venture or added to your family, your tax situation may be different.
Many people assume a Certified Public Accountant (CPA) is the only choice for getting their taxes done right, but that’s not the case. There are several tax preparation professionals to choose from, each with different qualifications and areas of expertise. Knowing the differences will help you make an informed choice to get your taxes filed correctly.
Annual Filing Season Program Participants
Tax preparers who complete coursework and take an annual test of their tax preparation knowledge are registered with the IRS and can help you complete your tax returns. They are also allowed to represent you to certain IRS agents in the event of an audit, but only if they prepared your return in the first place.
There are no minimum education requirements other than the IRS coursework, and for this reason a tax preparer of this caliber may be less expensive than fully credentialed ones. You may find them working for national chains or elsewhere in your community.
Enrolled Agents (EAs)
An Enrolled Agent is a tax preparer who has passed the IRS’s Special Enrollment Examination, which tests them on all aspects of tax planning, filing for individuals and business and representation (helping you through an audit). To maintain their license from the IRS, they also need to have completed continuing education courses every three years. A college degree is not required for EAs, though individuals may have a diploma.
In many ways, an EA is the ideal choice when you need help preparing your taxes because it’s their main focus. If you need more comprehensive help with your business finances or your personal investment planning, an EA won’t necessarily be able to help you with those extra services.
Certified Public Accountants (CPAs)
Most people immediately think of accountants when tax season arrives. CPAs are licensed by the states they work in, and each state has a different exam and licensing requirements. To prepare for the CPA exam, accountants complete an accredited university program; they also complete continuing education credits to maintain their license.
While some accountants specialize in tax preparation, others focus on a range of services, including payroll, bookkeeping, preparing financial statements for businesses and analyzing business finances. CPAs are a great choice if you own a business and are looking for a one-stop shop for financial services. If you only need tax preparation help, though, you may be overpaying if you hire an accountant.
Lawyers may choose to specialize in many areas, and tax law is one of them. Attorneys are licensed by the bar association in the states where they practice; to be admitted to the bar, they need to have passed the bar exam. Lawyers are highly educated, having graduated from an undergraduate university program as well as an additional three years of law school.
Tax attorneys well versed in legal matters can be particularly helpful in the event of an audit or more serious tax problem. Some may also deal in tax preparation and filing, but their fees are likely to be higher since you’re paying for a great deal of education.
Finding a Tax Preparation Professional
Once you’ve decided which tax professional is right for you, you can search for one in your neighborhood through the IRS database. It’s always a good idea to check references as well. When you choose the right professional, you can build a strong relationship for years to come.February 14, 2017
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Top 5 Ways to Slash Your Small Business Tax Bill
Few times of the year are as dreaded by small businesses as tax season. For many people, tax season is a process of going through a big shoe box of receipts to determine the possible damage. However, it also presents an opportunity to make important deductions and receive credits for your hard work. Here are the top five ways to slash your tax bill this tax season.
1. Get Paid to Travel
The majority of business-related travel is tax-deductible. Such expenses as airfare, hotel stays and car rentals can be deducted as business expenses if the reason for travel is for business operations, expansion or training. Conference fees are often deductible. Meals are deductible up to 50 percent. For mileage related to your business, you have the option of using the standard mileage rate or the actual expenses related to the use of your vehicle, including the actual gas expense, repairs and insurance. Keep up with receipts related to travel, and account for the purpose of the trip, the reason for the purchase and the amount of the purchase.
2. Account for Interest
As a business owner, you have likely accumulated some business debt through a small business loan or business line of credit. Business financing can help get your startup off the ground, and the interest you pay is generally tax-deductible. Keep up with the business loan documents that show the legitimate business purpose of the loan and the terms of the agreement.
3. Deduct Expenses Related to Your Home
Many small businesses are operated out of the owner’s home, entirely or in part. Take all deductions that apply to your specific business situation, such as:
- Home office deduction
- Mortgage interest
- Home phone
Ask your accountant or use tax preparation software to see if you qualify for other expenses related to the use of your home.
4. Make Charitable Donations
Many business owners are aware of their ability to get a deduction for charitable donations; however, there may be more practical ways to donate than simply writing a check to a charity. For example, if a stock is donated, the value of the stock at the time of the donation is factored in, not its original purchase cost. If you have stockpiles of unused inventory, consider donating it and claiming the charitable deduction. If you have a business asset you would otherwise dispose of, consider donating it instead.
5. Prepare for Next Year
It is never too early to start preparing for the next tax season. Remember, you do not need to be a tax expert to start masterfully preparing for the next season. A large part of tax filing involves organizing your documentation for the accountant or tax expert to review; implementing strategies into your daily, weekly and monthly routine can help you be prepared for the next filing season. Some quick tips for an efficient accounting system include:
- Sort papers – Don’t leave papers around to pile up on your desk. On a daily basis, sort papers into different categories and place them in labeled folders, including receipts, invoices, product purchases, bills, receivables and other categories specific to your business.
- Reconcile receipts with account statements – Pair up your statements and receipts for clarity.
- Install accounting software and use it throughout the year.
- Sort electronic bills into folders that are updated automatically, such as emailed receipts that are directed into a certain email folder.
- Schedule time every month to run financial reports and review information for taxes.
- Make automated tax payments for payroll, self-employment or anticipated taxes.
These tips and tricks can help you minimize your tax bill and be better prepared for next year.February 8, 2017
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Best Questions Recruiters Should Ask Candidates in 2017
As a recruiter, you’ve probably made a New Year’s resolution to start asking better interview questions. But they can be hard to get right.
How is the future of work and business affecting the way we have our first conversation with a potential staff member?
It’s not easy. Here are a few questions you should be asking in 2017 that will help you choose only the best candidates, and further your company growth.
1. “What motivated you to apply for this post?”
This is the age of being up front and honest with people. As social media both reveals and hides our real character, it’s vital for employers to know how to assess someone’s motivation for a particular job. When you get the candidate answering this question, you get a clearer picture of what value they bring to your team.
2. “How do you think you can contribute to our organization’s mission?”
Dave Kerpen, CEO of Likeable Local and author of “Likeable Social Media,” told Business Insider that this particular question shows the moral of a person, and how it can sync with a company’s vision. “This question can lead to a great discussion and a quick determination about whether there’s a mutual fit,” he says.
3. “Tell me how you deal with change.”
Now, more than ever, those on your team will need to learn how to adapt. From this question, and even from reading body language when you ask this question, you can get a better idea of how open or closed off your candidate will be to embracing change. It’s the only way to survive the future of the workplace.
4. “What was your path to get here?”
Although a journey to a particular career has as many different paths as the personalities who could land the job, knowing a person’s creative journey will give you insights on how they make decisions in crucial moments. It’s a question Hari Ravichandran, founder and CEO of Endurance International Group, says can go a long way in learning about someone.
5. “Are there any personal opinions you used to have, but which you’ve changed your mind about completely?”
Humility is key on any team. If someone can admit to thinking wrongly, and show that they are willing to change their stance, this reveals that they are open to learning, and can be trained easier than others.
Remember: knowing how to profile a good candidate means you may have to do a bit of mind-reading, and decipher body language. But these questions can help provide deeper insights — which will lead to wiser decisions and better employees.January 23, 2017
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Rethinking and Reimagining the Workweek
The notion of the five-day, 40-hour work week appears ingrained as the American standard, from pop culture (such as the classic Dolly Parton song, “9 to 5”) to federal labor law and, of course, in companies across the country. This standard, however, has been followed for less than a century. Its application is far from universal, and its effectiveness is increasingly challenged as the workplace, workers and work itself changes.
History of the 40-Hour Work Week
In 1926 Ford Motor Company became one of the first American companies to adopt a five-day, 40-hour week for its employees. Official explanation at the time was to grant lower-wage workers the luxury of more leisure time, though Henry Ford later admitted the shift intended to boost productivity, since workers were expected to increase their efforts during the shorter time on the job. Also, with more leisure time the employees were more likely to consume the products of their creation.
The federal Fair Labor Standards Act in 1938 set the 44-hour work week as standard across most industries, and amendments reduced this to 40 a few years later.
Arguments Against the Conventional Work Schedule
Requiring all employees to adhere to the same 9-to-5 schedule can negatively impact individual and company-wide productivity.
- Individual efficiency: People naturally follow different biological rhythms, with some people at their most productive in the morning while others’ energy levels peak at night.
- Distractions: The office environment where all employees are present on the same schedule provides many more distractions and interruptions.
- Emphasis on hours worked instead of work accomplished: The 40-hour week puts the focus on the clock rather than the results.
- Burnout: Following the same routine, day in and day out, leads to mental exhaustion and contributes to burnout. Burnout also results from working much more than 40 hours, which frequently happens in industries where 40 hours are viewed as a minimum.
Alternative Work Schedules
There is no one-size-fits-all schedule and companies seeking an alternative to the traditional work week must evaluate business needs and balance with staff preferences. Options to consider include:
- Four-day workweek: Instead of five eight-hour days, employees work ten hours for four days.
- Telecommuting: Technology allows for collaboration, communication and production from remote locations. Working from home has fewer distractions and reduces commuting costs, time and carbon emissions.
- Flex scheduling: Employees can be permitted to schedule their own hours, working when it’s better for them, as long as the work is accomplished as required.
Instead of holding onto the relic of the 40-hour week out of habit, companies should consider schedules that might make more sense for their employees and for their business.January 20, 2017
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5 Reasons Millennials Really Quit Their Jobs (& How to Prevent Them)
As a small business, you know how imperative it is to attract the best talent. And if you’re savvy, you know that millennials — often reviled as entitled and lazy — are in fact creative, highly ambitious and committed to making the world a better place.
The problem? They’re notorious job-hoppers: 42 percent change jobs every one to three years. Read on to find out why millennials are so hard to hang on to and what you can do to keep them on board.
1. They’re Still Figuring Out What They Want to Do
Partly due to a higher education system that’s not career focused, many millennials leave college unsure of what career to pursue. As a result, they job hop in search of a fulfilling career that makes use of their talents.
To combat this, help them figure out what they want to do WITHIN your company, not elsewhere, by encouraging lateral movement. Maybe you have a millennial employee who’s an account manager, but you notice she’s an excellent writer. Let her shadow a copywriter and make the switch.
2. They’re Unstimulated
While millennials are often unfairly labeled as lazy, in reality, many are workaholics. A major reason millennials leave their jobs is because they don’t feel challenged by the work they’re given. One solution? Give them more work, not less. Millennials are driven by a desire to succeed, and you’ll get the best work out of them if you give them a chance to wow you with how much they can accomplish.
3. They Don’t Feel Recognized
Many complain that millennials need constant praise, when what they really want from employers is regular feedback. Assign them a mentor who can give them advice, criticism and positive reinforcement (when appropriate). Don’t forget: The chronically overworked and underpaid generation wants their work to be recognized with adequate pay.
4. They Want to Make a Difference
A whopping 85 percent of millennials value work that gives back to the community. If your company isn’t a nonprofit that helps the world in an overt way, find ways to help your activist generation employees feel that their work matters. Even better? Let them organize a company-wide volunteer effort.
5. Your Ping-Pong Table Isn’t Cutting It
When people think of what makes millennials happy in the workplace, they tend to think of kegs in the office, table tennis tournaments and unlimited free snacks. While these are fun, try implementing perks that truly add value to millennial’s lives: programs such as student loan forgiveness, company-financed higher education opportunities and quality health insurance.
When you make millennials happy, you’ll find they’ll become loyal employees who work tirelessly to make your company the best it can be.January 18, 2017
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Lead Generation Tips for Small Businesses
Small businesses need to invest in lead generation in order to grow and maintain their customer bases. However, it can be difficult to know where to start. These lead generation tips can help you reach out to your target audience and turn them into paying customers.
Connect on Social Media
Social media is an incredibly valuable lead generation tool for small businesses. Even if you don’t have a big marketing budget, you can reach out to people who are likely to be interested in your brand. Twitter is particularly powerful, as it allows small-business owners to look out for and engage in relevant conversations that are already happening on the platform. Interested Twitter users become leads when they follow your brand or get in touch for more information.
Optimize Your Site
Is your small business website optimized to turn casual visitors into leads? Your site should include numerous calls to action, which invite readers to get in touch, ask questions, or join your mailing list. Use analytics to learn how visitors move through your site and consider adding calls to action to the pages where visitors typically bounce away. You should also have a contact form, which people can use to get in touch with questions or feedback. The form should be easily accessible from every page of your website. Optimizing your site in this way will help you to avoid losing vital opportunities to connect with your audience.
Build Your Mailing List
You need a way to stay in touch with your leads. A mailing list is ideal because it allows you to keep leads up to date with your latest offers, promotions and products. The challenge is finding ways to encourage users to sign up to receive your emails. One good option is to offer a free download, such as an e-book or free trial of your software, to users who enter their email. Once you have a mailing list of interested consumers, send carefully constructed emails to spark their interest and persuade them to return to your site. In this way, you can nurture your relationships with your leads and ultimately turn them into loyal customers of your brand.January 10, 2017
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Top 5 Ways to Slash Your Tax Bill This Season
As the year comes to a close, business owners still have a few opportunities to slash their tax bill. Shrinking their profit margin will help businesses legally position themselves to have a lower tax burden. Some ways to accomplish this objective include when they:
1. Decrease Revenue
Small businesses are taxed on the profits they have actually earned, which represents the remaining funds after all expenses are paid. One simple way to lower the tax bill is to decrease revenue. Consider deferring payments received in December until the first part of January, and give vendors and customers a break by sending out invoices later in December, which also gives them less time to pay by the end of December. These methods work for businesses that use the cash-method accounting option. For accrual method-businesses, business owners may want to hold off on providing their goods or services until the New Year.
2. Pay More Bills
At the same time businesses decrease revenue, they should also look for ways to increase their expenses. Business owners should pay as many business-related bills as possible during December, including cell phone bills, rent, utilities, insurance costs, professional fees or others. These bills can often be prepaid, or more than one month of service can be supplied ahead of time. Businesses may also want to pay other expenses, such as advertising expenses or other expenses that will likely need to be paid in the first quarter, and the costs to train employees or purchase handbooks. The payment amounts can be used to deduct profits from this year rather than having them affect next year’s profits.
Many business owners do not pay themselves a salary when they are starting out. However, IRS regulations allow business owners to pay themselves a reasonable salary that is taxed as ordinary earned income. Additionally, business owners can usually receive dividends, at a lower rate, from the profits of their business.
3. Increase Capital Expenditures
Businesses may also wish to purchase items that the business will need in the following year. Such purchases may include leasing a vehicle, buying an expensive piece of property, acquiring office equipment or making another capital expenditure. These items should be placed in service immediately to avoid any tax issues. Business owners may also want to stock up on office supplies that they will need, including ink cartridges, stationery, copy paper and pens.
Businesses may also need to repair equipment and can generally include these expenses in the year the repair is made. Businesses may elect to make a partial disposition if part of an asset was replaced during the year, which allows the business to recognize a loss on that portion of the asset. Small businesses can take advantage of repairs, maintenance or improvements to buildings under safe harbor rules, if the cost is less than $10,000 or two percent of the building’s adjusted basis.
4. Maximize Retirement
Small business owners have a variety of retirement tools that they can use for themselves, including Simplified Employee Pension, SIMPLE IRAs and 401(k) accounts. Business owners can shelter more of their income through these mechanisms while allowing for a tax deduction for these contributions. Employers may also want to look into providing employees with a retirement savings opportunity.
5. Contribute to Employee Benefit Plans
Rather than offering employees raises or bonuses, employers may want to consider contributing to employee benefit plans, such as contributing more to employee health insurance costs. When an employer gives a raise, the employee only sees a portion of that raise due to the FICA tax, Medicare tax and income tax on those wages. At the same time, the employer pays its share of FICA, Medicare and other taxes. Contributing in this manner saves both parties from having to pay additional taxes, and it lowers the tax bill.December 13, 2016
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Why LinkedIn Is the Best Online Recruiting Platform
LinkedIn is one of the most unique professional services in the vast digital landscape. Where else can people create a profile detailing their career-related experiences, write thought leadership articles, connect with their network, and search for the latest job opportunities using just one website?
LinkedIn’s seamless integration of a social network, job board and career profile makes it the most powerful job recruiting tool on the web. This comprehensive combination allows recruiters to get a holistic view into the professional story of potential candidates.
According to Social Times, 92 percent of recruiters use some form of social media to recruit candidates. Eighty-seven percent are using LinkedIn — that’s over 30 percent more than the number using the next highest utilized social network.
The fact that LinkedIn is a social network dedicated to professional purposes makes it exponentially easier for candidates to tell their career story. And, for recruiters using LinkedIn’s sophisticated recruiting software, it is much easier to target, search for and sift through qualified candidates.
For both job seekers and those who need to fill positions, the ability to explore the commonalities of others within their network allows for a deeper connection in the initial stages of outreach.
Career Profile Beyond the Resume
Resumes, within the confines of a strict format, only let candidates relay limited information. Building out a LinkedIn profile allows candidates to tell the entirety of their experience, including work history, education, side hustles, volunteering, passions and skills. It’s also the only platform where any published thought leadership content is synced up with professional history.
Recruiters get a better sense of who a person is when exploring a candidate’s profile. Instead of simply looking for key phrases and titles that align with the job opening, recruiters can dig into tangential information that would typically be left off of a traditional resume. This can put a candidate who seemed unqualified at first glance back in the running for the job.
Job Board Connected to a Social Network
LinkedIn’s job board feature is different from the rest of the online job boards available. Aside from being integrated into a professional social network, users can receive notifications about a curated selection of jobs based on their past experience, skills and career interests. Recruiters get only submissions from candidates with aligned skills and experience — those that have no correlation to the job description are weeded out.
LinkedIn also offers sponsored postings that can be targeted towards candidates with the experience and skills that a recruiter may be looking for. While other services have this option, LinkedIn is the only platform that can tap into the treasure trove of data from the aforementioned career profile.December 8, 2016
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Holiday Celebrations in the Workplace
The winter season is full of holidays that ignite a sense of unity, yet many in the HR field find that holiday celebrations in the workplace leave a large number of employees feeling alienated. While office events and celebrations are conducive to bonding and team-building, planning a holiday celebration must be handled with care to ensure that all employees feel included. This is not always an easy task; however, it is a necessary step that must be taken to ensure corporate wellness.
Consider Religious Connotations
While events such as the Fourth of July and Thanksgiving are American holidays, it’s important to remember that many winter holidays are religious holidays. Before planning a holiday celebration in the workplace, consider the meaning behind the holiday. Christmas, for instance, commemorates the birth of Christ, while Hanukkah honors the rededication of the Holy Temple in Jerusalem. Certainly, throwing an office bash that solely recognizes the birth of Christ or the lighting of a menorah could be seen as religious discrimination to those with different beliefs.
Throw a Seasonal Bash
Despite the fact that an office may have people who observe various religions, it is still possible to organize a holiday celebration that includes everyone. The simplest way to celebrate the holiday season is to organize an event that is not tied to any one particular religion. For instance, a celebration declared a “winter bash” is acceptable. Opt for decorations that symbolize nonreligious symbols of the season, such as snowflakes or snowmen. The food, beverage and activities should follow the same guideline; seasonal items that are nondenominational.
Make Attendance Optional
Workplace celebrations that do include religious symbolism associated with one religious holiday should also include symbolic mementos of others. This will ensure that individuals with varying beliefs will feel welcome and included in the celebration. Keep in mind that not all employees will observe religions that have holidays in the winter. These individuals may feel uncomfortable participating in celebrations associated with other beliefs. In this case, be sure that attendance is optional so that employees can determine for themselves if they feel comfortable attending. By following these tips, companies will eliminate the risk of religious discrimination while boosting morale.December 7, 2016
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Having Trouble Finding Great Employees? Here’s Why
Recruiting is often one of the most challenging aspects of running a business. It’s not just about finding an employee with the right skill set; you want one that fits your work culture as well. If you’re having trouble finding qualified candidates, you may be committing one of these four recruiting mistakes.
1.You’re Not Mobile First
Millennials are mobile first. They spend almost a full day (22.4 hours) each week on their phones. If you’re looking for young employees and your recruiting efforts aren’t geared to reach them on their phones, then you’re missing out on a large talent pool. You need to tailor your recruiting efforts to reach millennials where they are, and right now, they are on their mobile devices.
2. Your Methods are Outdated
Classified ads, job boards and job fairs are great and should be a part of a comprehensive recruiting plan, but if that is all you’re doing, then you are leaving a lot of stones unturned. Get with the new century and add social media to your recruiting process. Facebook, Twitter, LinkedIn, as well as other social media websites, can be an excellent way to prospect and meet potential employees. Social media also provides an opportunity to see the personality and values of a potential employee. It’s a good way to see if they are a good fit for your business before you attempt to recruit them.
3. Your Net is Too Small
It is easy to continue to visit the same well you’ve always visited when you look for new employees. Unfortunately, the well may have run dry, and it’s time to expand your search. Limiting yourself to certain schools, websites or job fairs means you’re eliminating a significant group of potential employees. Instead of focusing solely on the where, make your recruitment about the what, meaning the skills, experience and values you’re looking for in a new employee and then find places that fit your ideal employee profile even if they are outside your normal recruiting areas.
4. You Want Too Much for Too Little
Are you in a competitive industry that has a shortage of employees? If so does your compensation package align with the current recruiting environment? If you’re having difficulty finding qualified candidates, it may be because what you’re offering isn’t enough for your particular industry. Take a look at what your competition is offering for similar positions. If you find your compensation is severely out of line with your competitors, it’s time to rethink you’re offering or what you expect from the positions you’re looking to fill.November 17, 2016
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How to Foster Trust in a Competitive Work Environment
With employees clamoring over one another for promotions, credit and praise, the work environment can be a stressful place. But HR professionals can honor everyone’s goals while fostering trust and creating a healthy, productive work environment.
Highlight Individual Strengths
You hire employees because of the skills they bring to the business. If your business is suffering from lack of recognition, you hire a marketing expert. Weak sales figures demand expert salesmen and saleswomen. Get your employees together to discuss what they bring to the table.
It’s better to focus efforts on improving an individual’s strengths rather than trying to improve on weaknesses, says Thomas Rath in his revolutionary book, Strengths Finder 2.0. By highlighting what each team member does well, you foster a sense of appreciation and cooperation within your team.
Ask for Goal Lists
Employers often make the mistake of being too self-centered. Employees who feel like their every effort only benefits the company are more likely to crave some sort of recognition in return, which leads to competition. Instead, turn the focus back on your employees.
Ask your employees to make a list of the goals they want to achieve while working for you. What do they want to get better at doing or what numbers do they want to reach? While your employees’ goals and your business goals may overlap (such as “become more comfortable giving presentations”), showing your employees that you care about their life satisfaction will reduce interpersonal conflict and boost individual morale.
When employees are anxious, their productivity suffers. How can you focus on crafting a winning presentation when you’re stressed out about your coworker one-upping you on another project? Take steps to reduce anxiety and allow your employees the head space to flourish.
Make sure employees know that they won’t be punished for making mistakes. Encourage your team members to voice their opinions and brainstorm different ideas. Set clear priorities for your team and stick to them. Put any rules, policies or job expectations in writing so there are no surprises. Give everyone plenty of notice when an audit or performance review is coming up. By making the workplace as stress-free as possible, you can foster trust with your employees and create a safe, productive work environment.
A trusting workforce is a productive workforce. Building trust comes down to acknowledging each employee’s value to make them feel important and secure in their position, showing interest in your employees’ personal goals and creating a stress-free workplace. If you take care of your employees, they’ll power your business to success.November 15, 2016
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Does Your Small Business Need ERP?
Managing IT is a challenge for small business owners whose primary focus should be building a profitable company. But over time, inefficient operational systems can impede growth, and the possibility of upgrading to an all-in-one software solution must be addressed.
For most businesses, this means considering ERP, which can eliminate the inefficiencies of delayed reporting and duplication of work that results when business functions are tracked using separate systems.
ERP solutions are no longer cost-prohibitive for small businesses, but upgrading is not without its drawbacks that entrepreneurs should carefully consider. If you do choose to transition to ERP, you should choose a solution that will meet your needs for the long term as you continue to grow and expand into new markets.
What Is ERP?
ERP, or enterprise resource planning, is a comprehensive software solution that combines all “back office” business functions. Those typically include human resources, accounting, manufacturing and inventory, which all draw reports and tracking tools from the same set of data. Some distinguish ERP from CRM, or customer resource management, which integrates all front office tasks, like client relations and social media.
ERP saves staff time in data entry and report creation and provides in-depth insight into areas of growth or decline. For product-based businesses, it can be particularly valuable, because it shows all aspects of the product life cycle at a glance, acting as an effective tool for planning and new launch implementation.
The full-service technology solution came of age in the mid-1990s, when it was primarily used by large businesses, typically manufacturers. At that time, ERP was expensive and was run on large mainframe computers. As technology has evolved, so have the options for businesses of all sizes to integrate their operations software, since ERP may be subscription-based and need not be installed on-site.
Options for Small Business: ERP or Standalone Products
It is typical for home-based businesses or one-person operations to start with basic accounting software, like QuickBooks, and other commercial products to meet their operational needs. Using separate programs to handle finance, inventory and IT can work effectively for small enterprises, who have a modest number of transactions. Shipping and manufacturing are manageable by one or a few people, who can easily collaborate to share information.
As growth occurs, however, CEOs may find it harder to remain efficient using distinct reporting systems. According to an Inc. magazine report, expert Robert Israch says the transitional point is $5 million in annual revenue, after which it may be time to consider an upgrade to ERP.
What Kind of ERP?
ERP solutions of the past required a complicated installation and migration from legacy systems into the new program. IT staff, either in-house or contracted for the project, took a great number of hours to get the new ERP up and running. The process was expensive, and the new software often presented a significant learning curve for staff.
Recently, however, more providers have offered subscription-based ERP solutions that bypass the costly and inefficient ERP installation. Systems offer security and accessibility through a cloud-based platform for a monthly fee. Instead of installing ERP on a company’s own hardware, it lives on the provider’s server. The integration of cloud and mobile functions in the past few years has made ERP a real possibility for small businesses who need an infrastructure to support their current and future needs.
Should You Upgrade?
Before deciding to transition to an ERP, or when choosing a service provider, it is important to consider not just whether you’ve hit $5 million in revenue but the trajectory of your growth over the next five to 10 years. ERP should adjust to your evolving needs with little difficulty. Analyze whether the product you choose may be customized and robust enough to support periods of high activity, so your systems won’t fail you when you need them most.November 8, 2016
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Four Must-Have Accounting Tools for Your Small Business
For the owner of a small business, every dollar matters. However, tracking your income, spending, payroll and invoicing can take up resources that are better spent growing your business. The following programs can help you sift through the numbers and paperwork and free you up to concentrate on building your company.
Wave’s accounting software is one of the most popular business tools for small to medium-sized companies around the world. The program was essentially designed for freelancers, entrepreneurs, consultants and businesses with fewer than nine employees, and the suite of software technology is free of charge for that reason.
The Wave software has been vetted by accountants; it has real accounting features, with “lite” cloud accounting capabilities for the integrity of your information. Additionally, you don’t have to bother with manually entering your data. Wave connects securely with accounts such as PayPal and traditional banking accounts, and the data is organized instantly. The professional results include tax reports and balance sheets.
NolaPro is one of the best accounting and organization tools a company can have at its disposal — in lieu of an actual accountant. The program performs several accounting functions. One of these is the collection of contacts, including suppliers, employees and vendors.
NolaPro also has a ledger feature that showcases double-entry accounting and produces documentation generated to the industry standard. The program manages your company’s customer orders as well as your vendor purchases, leaving you time to work on the other areas of your corporate agenda. NolaPro also handles billing details, such as quotes, receivables and recurring invoices, and it deals with payable activities like writing checks, organizing bills and issuing purchase orders.
The Xero software helps small businesses get things done while on the move and eliminates the need to invest in an accountant. The program lets you log into your accounting software remotely from your PC, Mac, tablet or smartphone. From there, you can see all of your current financials. This program is popular because it fits into the modern remote culture of most small firms and lets you stay continuously connected and ready to handle any issue.
Xero includes Quick Banking, which lets you manage your business credit card, bank and PayPal accounts. You can also monitor your inventory to streamline purchasing records, invoicing and sales tracking. Additionally, it makes handling payroll a straightforward process, bypassing manual data entry and making sure all the information fits within the parameters of your payroll format.
The structure of the GnuCash software will be familiar to those who have experience with open-source technology — it is customization friendly and versatile. The GnuCash program is a small business financial accounting software solution that can be adapted to a variety of operating systems, including GNU/Linux, BSD, Solaris, Mac OS X and Microsoft Windows.
Even though this sophisticated program is ideal for coders, it is perhaps even more useful to novices and administratively minded business owners. It streamlines the handling of stocks, income, bank accounts and expenses in an efficient and robust way. The program is intuitive and fast, and using it is similar to using a checkbook register. What makes GnuCash so compelling is that it was designed with industry standard accounting principles in mind to ensure that its reports are not only accurate but also present a professional appearance.November 3, 2016
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How to Use Facebook’s New Lead Generation Ads
Generating and buying leads can be expensive and take time. With Facebook’s new lead generation ad option, you can set your budget, highly target key audiences (within and beyond Facebook), and collect leads as they roll in. This article assumes you already know a little about the Facebook paid ad interface.
- Go into your Facebook Ads Manager. Click “Create Ads” in the management section. Choose the ad objective “Collect leads for your business.”
- Create a new target audience, or select an existing one. This is where Facebook really shines. Take advantage of the targeting options. When creating an audience, if you click “Narrow Audience,” you get a cross-reference option for targeting as well.
- Choose your ad placement (where it will show up). You can select auto, or you can edit to choose where the ads will appear. The lead ad placement is a bit limited currently.
- Set your budget by the day or by the campaign. The estimated reach on the right-hand side is helpful.
- Create ad copy and imagery. You have many options — photos, videos, slideshows, etc.
- Create your lead form. Customize it for your audience. Consider adding a question about how the potential client would like to be contacted, and then follow up with them that way (instead of forcing a call).
- Add a custom disclaimer, specific to your business.
- Review the order, and place it.
- Await approval. The most common reason for ads getting denied is too much text (more than 20 percent) within the image.
- Check your leads! Go to the reporting area of the ads manager, and click on your ad set. You will see the leads generated listed in the “Results” category. Click the “Lead (Form)” link to download the leads in a spreadsheet.
October 20, 2016
- Run two versions of the same ad using different images. With Facebook’s analytics tools, you can use what you learn from test ads elsewhere.
- Try the ads with both the context card and without to see what might garner more clicks and viable leads. The context card shows the potential client information about your company — but also adds another layer to submitting the form.
- When creating your lead form, name the columns the same as the columns in your CRM or email marketing system so you can import them easily.
- Getting leads is only half the battle! If you don’t have a CRM in place or a similar system to track your customer interactions, then set up a process to ensure leads are followed up on according to an outreach schedule that makes sense for your business.
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Are These Everyday Tasks Killing Your Productivity?
You take on a lot when you start your own small business. Every task can contribute to the success of your company, so it’s easy to fall into the trap of doing everything yourself. However, you hamstring your growth rate when you take on too many productivity-killing everyday duties. Consider bringing on an administrative assistant or a virtual assistant to take some of these loads off your shoulders.
Answering the Phone
Every time you drop what you’re doing to answer the phone, you break your concentration and may set yourself back constantly throughout the day. Put together a few phone scripts and a frequently asked questions document so your assistant can screen calls and help customers out effectively. You still have the opportunity to reach out to people who want to hear from you, while committing your time to high-skill tasks.
You get notifications on your computer, phone and tablet every time a new email comes in. The typical person looks at their email 36 times an hour. Even if you don’t go quite that far, you may wonder why the day goes so fast but you only got half of your to-do list done. Delegating email management keeps you focused. You can create filters that send high priority messages to your inbox while filtering everything else to an assistant.
Posting on Social Media
Social media profiles give you a valuable way to hear directly from your customers and audience without an intermediary, but it comes at a productivity cost. You can get caught up in conversations with people or end up checking your personal accounts. An assistant can write and schedule your posts, monitor follower comments, and give you information about the effectiveness of your marketing efforts.
As a small business owner, delegating effectively is an essential leadership skill. While you can handle these three tasks yourself, think about all the other productive things you could do with this time. An assistant can take over these job duties, while you put all of your effort to managing your company and helping it thrive.October 19, 2016
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Why Consumers Are Drawn to Monthly Billing
When you buy a car, the dealer usually prefers to negotiate on monthly payments, and many software companies are switching to subscription models instead of one-time purchases. Even though the monthly approach often means consumers end up paying more, they usually prefer it. Here’s why.
It’s Easier to Swallow
When you quote a lump sum price, such as $1,000, consumers need to mentally justify making such a large purchase. When the price is only $100 per month and you can demonstrate value, consumers can quickly decide that the payment fits within their budget.
Repeat Use Means Repeat Purchases
Studies have found that the more often consumers use a product or service, the more likely they are to buy it again. Monthly billing periods often help drive use.
On an annual cycle, the consumer might use your service less and less throughout the year. Because they’ve already paid in full, they might see additional uses as free and not using the service as not costing anything. When it comes time to renew, they may have stopped using the service or feel that they’re using it too infrequently to justify the lump sum cost to renew.
With monthly billing, consumers are more likely to make sure they use your service each month to get their money’s worth for each individual charge. This in turn makes it more likely that they’ll experience value and keep their subscription going.
Perception Is Reality
When it comes to pricing, consumer perceptions are reality, and most don’t think logically. If you do the math, $50 per month for 12 months costs more than $500 per year. However, many consumers don’t do this mental math and view the $50 payments as less than $500 all at once.
If you can help consumers feel they’re paying less while adding to your revenue, it’s an obvious move to make.
One final reason monthly billing works is because even when consumers do the math, a large one-time payment might be out of reach. An individual on a tight budget or a growing small business may not have the ability to make a large purchase, but they might be able to make the monthly payment work.
Offering a monthly billing option can put you within reach of more customers. And if you feel it might upset some of your existing customers, it’s not an all-or-nothing proposition. You can add a monthly billing option to your existing options to get the benefits of both pricing methods.October 11, 2016
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How to Avoid the 5 Biggest Mistakes Small Business Owners Make
Your entrepreneurial spirit has done an excellent job at motivating you to open your own business. However, your company could run into major problems if you encounter any of the following five biggest mistakes small business owners often make.
Lack of Delegation
A jack-of-all-trades approach is useful for getting started, but it can hamstring your growth. If you spend your time answering customer service emails or troubleshooting your computers, rather than focusing on business strategy and the big picture view, you can’t scale up. Delegate tasks and dedicate your energy to the things that only you can do.
No Investment in Technology
You have limited resources in a small business, so getting the most out of them is critical. Technology helps you streamline many tasks and frees up your time, but 63 percent of small business owners have problems deciding on the right choices. If you aren’t sure what solutions fit your business goals, reach out to an IT consultant to guide your decisions.
Focusing on a Broad Audience
You might look at huge companies like Amazon or Walmart and decide you also need to appeal to a general audience. However, you should avoid spreading yourself too thin. Focus on a niche audience and channel your time, energy and money into being the best company in that particular market segment.
Choosing the Wrong Business Entity
You have several business entity options to choose from when establishing your company, such as LLC or Inc. You may be tempted to set yourself up as a corporation right away, but you have to deal with more complex filing and tax requirements, on top of greater costs. Spend time looking at the pros and cons of each entity before making your decision.
No Work-Life Balance
Your business is an important part of your life, but your entire existence shouldn’t revolve around it. Over 20 percent of small business owners make themselves sick due to overworking, and skip out on vacations, social plans and family time for their company. Track your work hours and ensure that you have a good life balance overall.
Being a small business owner can be very rewarding just as long as you can sidestep these common pitfalls.September 29, 2016
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Are You Part of the Sharing Economy? What You Need to Know About Taxes
Have you moved into the sharing economy either part-time or in place of a traditional nine-to-five job? Here’s what you need to know to be ready for tax season.
Reporting Your Income
You must report all your income regardless of whether you receive a W-2, 1099 or other tax form. When you offer products or services in the sharing economy, it is generally considered self-employment income.
The minimum filing threshold for self-employment income is net self-employment earnings (after expenses) of $400 or more. This is true even if you didn’t meet the $600 threshold to receive a 1099-MISC or the $20,000 plus 200 transactions threshold to receive a 1099-K.
Filing Your Return
When you file your tax return, you will need to complete Schedule C (Form 1040), Profit or Loss From Business. There are separate lines for your 1099 income and non-reported income. This is also where you enter your business expenses.
If your adjusted gross income is $62,000 or less, you may be eligible for the IRS Free File program. Note that this is your income after your self-employment expenses and other adjustments are deducted, so it is possible to qualify for Free File even if you received more than $62,000 in payments.
Some providers charge additional fees to complete Schedule Cs, state income tax returns or other forms, while others do not. Be sure to compare multiple providers to avoid unnecessary fees.
Because there is no tax withholding on self-employment income, you must make quarterly estimated tax payments. To avoid a fine for failure to pay estimated taxes and interest charges, your estimated taxes should total at least:
Review Form 1040-ES for special rules that apply to farmers, fisherman and high-income individuals.
- 90 percent of your current year tax liability, or
- 100 percent of your previous year tax liability (your total tax amount, not the amount of the check you wrote when you filed your return).
Four equal payments are due as follows:
If you or your spouse have wage earnings, you can also elect to increase your withholding to cover your required estimated tax payments.
- April 15 of the year you earned the money (i.e., the year before you file your return).
- June 15.
- September 15.
- January 15 of the year your tax return is due — you can skip this payment if you file your return and pay your full balance by January 31.
In addition to income taxes, you also must pay the Social Security and Medicare taxes that are typically withheld from W-2 wages. This leads to an additional 15.3 percent tax on your net self-employment income.
You compute this tax when you fill out your Schedule C. The employer’s portion, roughly half the tax, is deducted from your adjusted gross income and is not included when calculating your income tax.
You can generally deduct all your business expenses in full. Unlike with employment-related expenses, you don’t need to itemize to deduct business expenses. Instead, business expense deductions are entered on Schedule C.
Business expenses directly reduce your self-employment income, so you do not pay self-employment or income taxes on revenue that you used to pay expenses. If your business expenses exceeded your self-employment income, you may be eligible to claim a loss on your tax return.
Common business expenses include the following:
Carefully research any expense you intend to claim. The IRS more frequently audits returns with self-employment income due to high rates of claims for improper expenses. The most common mistakes are deducting personal expenses or claiming a full deduction for an expense that is part personal and part business (e.g., a phone bill).
- Home office
- Raw materials
- Travel expenses
- Phone or internet service
You can learn more by visiting the IRS’s new Sharing Economy Tax Center.September 27, 2016
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4 Hidden Business Credit Card Benefits You Should Be Taking Advantage Of
Credit card offers often consist of a rewards program, the APR and a bunch of fine print. But did you know that some of that fine print actually helps you? Check out these four hidden benefits that you should be taking advantage of.
1. Rental Car Protection
When you rent a car, you’ll usually be met with a heavy sales push to buy the rental car company’s damage waiver. Most major credit cards cover theft and accident damage when you pay for the rental with that card, so you don’t need to pay extra for protection.
Most cards offer secondary coverage which means you make a claim with your regular auto insurance company first, and the credit card company covers your deductible. Higher-end cards, often with an annual fee, offer primary coverage, so you don’t even need to make an insurance claim.
2. Return Protection
Is a store refusing to honor their return policy, or did you miss the return deadline? You may be able to get a refund by calling the number on the back of your credit card. This coverage is separate from the dispute process, so you may be able to receive a refund even if the store technically had the right to deny your return.
3. Price Protection
If you bought an item, only to watch the price go down or find a better price somewhere else, you aren’t out of luck. Price protection lets you get the better price without going through the hassle of returning the product and buying a new one.
To get the lower price, simply send in your receipt and the ad with the lower price. Once the credit card issuer verifies it, you’ll receive a statement credit for the difference.
On many cards, this even works with deals like Black Friday sales. Shop ahead of time to avoid the crowds, then send in your price protection claims once the specials are announced.
4. Travel Delay Assistance
When massive computer outages hit Delta and Southwest this summer, many travelers were stranded for days. Some travel cards will cover your hotel, meal and alternate transportation expenses if this happens to you.
This is typically a premium benefit only available with annual-fee cards, but if you’re a frequent traveler, you may want to add one of these cards to your wallet.
How to Find More Benefits
If you haven’t reviewed your full list of benefits, you could be missing out on hundreds of dollars per year. To find more benefits, first talk to the issuing bank. Mastercard and Visa also provide additional benefits to all cards with their logo, regardless of the bank.September 15, 2016
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4 Ways You Are Letting Repeat Business Get Away
A company that can’t retain customers is a company that won’t be in business for very long. Too many companies finalize a sale and then think the process is over. Successful companies know that a sale is just the beginning of a customer relationship, and these companies work hard to avoid the four common ways that other businesses let repeat customers get away.
Not Providing Timely Service
Customers are reasonable when it comes to getting service, but making a customer wait too long will cause that customer to take his or her business elsewhere. Whether you assign a sales team to existing customers or develop a robust customer service department, you need to constantly service your existing clients to keep them. You should set deadlines of no more than one working day to return client messages, and there should be a way of escalating client issues that don’t get solved immediately.
Not Updating Customers on New Products and Services
Selling products to existing customers is much more cost-effective than having to replace customers when they leave. As you get new product releases and updates that you feel your customers would find useful, you should be offering some kind of information your customers will appreciate. Be careful not to overwhelm your existing clients with information, but be sure to keep everyone updated on your latest developments.
Not Getting Feedback From Clients
Your existing customers will develop more of an emotional tie to your company if you ask for feedback. By making your most loyal customers part of a new product testing group, you get the practical feedback you need and your customers feel like they are a part of your product development process.
Not Appreciating Clients
A client who spends money with your company wants to feel like her business is appreciated. Reach out to clients and ask them what types of products and services they would like to see, and let your clients know that their needs help to drive your business. Keep detailed client contact notes for every client, and encourage your customer service and sales staff to stay in touch with clients and make your clients feel appreciated.
It’s difficult to find new clients, but it’s even more difficult to replace repeat business. Repeat business is the financial foundation on which your company is built, and you cannot have growth until you have that foundation in place. You need to make client retention a critical part of your sales and service process if you want to develop a successful business.September 14, 2016
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Simplify Your Menu to Increase Your Profits
A simplified menu that showcases your signature dishes can help you strengthen your brand and increase sales. Customers typically head right for the lowest-priced items, veering away from more expensive and difficult-to-understand dishes. You can target customers who want the most popular items by offering a single, higher-price dish with your current add-ons advertised as free options. For example, instead of offering a $6 burger with a $2 side salad or small order of fries, think of offering an $8 burger with a free side salad or small order of fries. The “free” makes the customers feel like they’re getting something extra. In addition, you’ve increased the cost of your most popular item. Another benefit is that you have allowed the customers to design their entree.
Keep Options Available
Simplifying your menu does not mean you have to cut other premium add-ons. You can continue to advertise more expensive add-ons for an additional price: “$1.50 extra for sweet potato fries or avocado.”
Before you think of cutting any options from your simplified menu, research which add-ons are the most profitable. Alcohol, coffee and tea, and soup are low-cost, high-yield items for cafes. Combo meals of several different items, such as chicken nuggets, fries, a junior bacon cheeseburger and a drink, or a sandwich, chips, piece of fruit, and bottle of water are generating big profits for fast food restaurants and Starbucks.
Boost Sales of Your Most Popular Dish
There are a number of tricks to designing your menu to boost sales of your most popular item. First, put that item at the top of the list on the menu or in its category. Next, limit the amount of items in each category to 10 dishes. This helps customers make a decision and reduce ordering time.
Make sure to put the price in the description of the food, near the end of the text. This will encourage customers to focus on the food rather than the price. In addition, offer foods in small and large sizes. This will help customers avoid food and spending waste, and save you money on labor and raw materials.
Tweak Your Menu as You Go
After trying these ideas, see which ones worked best for you. Think of modifying the strategy further to change how your customers see you and your menu. For example, if offering a single premium item at a higher price worked, think of pairing that item with your most popular alcoholic beverage or soft drink, and add-ons for it.September 9, 2016
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5 Great Ways to Build Your Customer Base
Getting your own business up and running is no small feat. Even after your doors are opened, your website is up or your product is launched, you will find there’s still work to be done. Gaining and maintaining a solid customer base is your key to ongoing success. Bearing such importance in mind, here are five great marketing tips that we hope will help you expand your business.
1. The Follow Through
When networking, don’t just meet and greet. Use those business cards you’ve collected, and email the people you’ve met. Let them know how much you enjoyed meeting them, ask if you can help them, and offer to share resources. Frequent, friendly contact will help bring you to mind when people need a product you can provide.
2. Social Media Overlap
You never know who’s going to find your business, but the more visible you are, the more attention you stand to attract. Don’t limit yourself to one platform; instead, consider Facebook, Tumblr, Twitter, Instagram, LinkedIn,YouTube and more. Utilize the strengths of each platform by considering how it can serve you best: as an ad, a resume, a sample? Be sure to link your accounts — not just to one another, but back to your website, email or blog, as well.
3. Consumer Reviews
Nothing beats a referral for convincing potential buyers. This comprehensive consumer survey by Ogilvy, Google and TNS found that 74 percent of consumers relied on word-of-mouth recommendations when considering a purchase. Have your customers tell their friends! The same survey also found that buying decisions are heavily influenced by YouTube videos, which give people a chance not only to examine the product but also to hear and read consumer responses before they buy.
One of the most recent trends in business and marketing, as noted in this Deloitte consumer review, is the rise of personalization. This trend can take many forms, from products geared toward a customer’s location or age range, to those which allow almost full customization of the finished product. Consider the ways in which your own product can offer a unique personal touch to your customers.
5. Creative Networking Sites
Think outside the conference room. You can meet interested clients anywhere, any time, so try out some unconventional locations that appeal to you: your favorite pub, a craft fair, your martial arts dojo or even your local poetry readings — anywhere you’d like to become a regular face. Sponsoring a local sports team is a great way to get to know — and become known in — the community.September 9, 2016