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Small Business Tax Preparation Tips - Stay a Step Ahead of "Tax Season" Today
Caron Beesley
Post date: 03/23/2010 - 20:58

Tax season may not be upon us yet, but it's certainly around the corner. And, as every good accountant worth their salt will tell you, getting ahead of your obligations and doing some early tax planning and preparation will stand you in good stead once reporting time comes around.

Whatever your business structure and reporting requirements there are several steps you can take now to get your small business tax obligations "ducks in a row" to help you maximize your deductions and sail
through tax season.

1) Gather Your Records and Check Your Books

Whether you are an independent contractor or growing small business, spend some extra time as the calendar year draws to a close examining your books and records. Make sure everything is accurate and up-to-date, and that records and documentation that help support the numbers in your tax return are clearly organized - this includes old tax forms, expense receipts, bank statements, etc. Read "Bookkeeping Basics for Small Business" to get a better understanding
of smart bookkeeping practices.

2) Understand What Deductions Can do For Your Small Business

Now is the time to increase your expenses so that you can maximize your business tax deductions before the end of the year. From stocking up on office equipment; making charitable donations; to paying bills early (utilities, phone bills, etc.) - all these affect your deductible bottom line.

Taking all the deductions you deserve can be a tricky business and, as a small business owner, getting it wrong can be costly. Not least of all when it comes to understanding what business tax deductions you are eligible to claim. Read my earlier post "*Tax Deduction 101 for Small Business" to understand the fundamentals of tax deductions. The comprehensive Small Business Expenses and Deductions portal on Business.gov provides a brief overview of expenses that qualify as tax deductions, with links to resources that provide clear guidance on deducting  andcapitalizing your expenses.

3) If Cash Flow Permits - Defer Income Earned

Depending on your business structure, you may be able to make some inroads to reducing your overall taxable earnings for the current tax year by deferring any payments you receive for services or products rendered during until the first week of January . This will defer your tax owed on this income until April 2011. If you are a sole proprietor, LLC, S Corporation, or in a legal partnership, income deferral can make good sense - especially if you don't foresee any significant changes to your income tax rates in the new year. If unsure, make sure to check with a professional tax
advisor.

However, if you have any doubts about the solvency or future of your clients, don't defer - collect those payments soon as possible.

4) Understand Your Obligations as an Employer - January and February are Busy Reporting Months

If you have hired employees for the first time, or have used independent contractors in the past year, it's worth familiarizing yourself with tax reporting obligations and deadlines that will hit early in the new year.

 

  • Employees - As an employer you must provide your employees with W-2 forms by January 31 (usually the next business day if the 31st falls on a weekend as it does in 2010). W-2 forms must also be filed with the Social Security Administration (SSA), showing wages paid and taxes withheld for the year. This must be accompanied by your W-3 form (which shows the total of all W-2s) by the end of February.

  • Independent Contractors - If you have paid an independent contractor or other business who is not your employee at least $600 during the year, you should have been maintaining W-9 forms, contractor's business licenses and certification of insurance during the year. The end of January is the deadline for sending each independent contractor a completed copy of Form 1099-MISC to report payments made to that contractor.
    Read Hiring Independent Contractors for more information about your obligations.

You can download all these forms directly from this Essential Government Forms for small businesses on Business.gov. To help small business owners stay on top of key tax deadlines, each year the IRS provides a free tax calendar- download the 2010 calendar here.

5) Set-up or Contribute to a Retirement Plan

By setting up and/or making a contribution to a 401(k), Roth IRA, SEP, or KEOGH plan - you can reduce your annual taxable income. Check your plan's allowable contribution limit for the year and talk to your accountant about what makes sense for your business.

6) Take Advantage of the Tax Resources Offered by the Government

The good news is that, more than ever, the government is reaching out to small businesses to help address their tax questions and provide free tax advice. From online advice to in-person and Web-based training, there are some very specific resources available from Uncle Sam to help small business owners understand their tax obligations as well as tax changes that may impact them in the new year.

Read "Free Small Business Tax Advice from Uncle Sam" and explore the resources available to help reduce the burden of tax preparation on your small business.

Additional Resources

Here is a selection of recent blog posts on a variety of small business tax topics:

*Note: Hyperlink directs reader to non-government Web site.

Message Edited by CaronBeesley on 12-22-2009 11:35 AM

Opening a Fitness Center; 7 Steps to Making Your Passion for Fitness an Entrepreneurial Reality
Caron Beesley
Post date: 03/23/2010 - 20:12

The fitness industry continues to be a lucrative market opportunity for small businesses and entrepreneurs. Despite a crippling recession, the *IHRSA (the fitness industry's global association) forecasts that U.S. health club memberships will reach 50 million by 2010 - a staggering 25% growth rate over today's numbers. Many factors play a part in fueling the success of this largely recession-proof industry - not the least of which is the growing trend among the 80 million plus baby boomers who are willing to part with their money to stay fit and healthy. In addition, existing gym members remain reluctant to give up their health club memberships choosing to save money instead on big ticket items such as vacations - reaffirming the fact that "buying" fitness is no longer perceived as a luxury item but a fundamental part
of our everyday lives. If you are interested in starting a fitness business and serving this growing market - Here are some pointers that can help you take the first steps towards owning your own fitness center.

1. Do your Market Research

Before you talk to your bank manager you will need the foundations of a business plan, and much of this will come from the information you derive and conclude from your market research. Factors to consider include:

  • Deciding on a Target Market - There are many options to consider when determining your target market. For example, you may decide to target a broad audience by offering a variety of disciplines from weight training, to cardiac work-outs and group classes. Or you may want to focus on a particular niche such as women-only gyms or discipline-specific fitness centers such as a pilates or yoga-based facility. To help you determine how you can capitalize on an underserved or potential market, step back and look at what the competition is doing and take the time to analyze local demographics. The government offers free access to a variety of consumer demographic data through the Business.gov Business Data and Statistics portal.

  • Location, Location, Location - Finding the right facility at the right price is critical to your success. If your customers can't find you, park easily, or assemble en masse at your chosen facility, then you simply will not be able to cater to your chosen market. Given that rent is likely to be your biggest business expense plan on spending most of your planning hours getting it right - first time.

 

Read "Tips for Choosing a Business Location" and make sure you are aware of the ins and outs of commercial leases, including how to negotiate the best deal for your business.

2. Staffing your Fitness Center

After rent, staff costs are the second largest expense involved in operating a fitness center. Many larger established fitness center chains hire their own fitness instructors and trainers, but for a start-up you can achieve greater flexibility and lower costs if you hire instructors on an independent contractor basis. This can reduce the regulatory and financial burdens that come with having employees on the books - including payroll taxes, employee benefits and insurance
costs.

Do note that there are very specific taxation and regulatory requirements involved with hiring independent contractors. Read more about these in this Hiring independent Contactors Guide from Business.gov. Also read - "*Working with Independent Contractors: Understanding Tax Requirements".

3. To Hire or Buy Fitness Equipment?

Fitness equipment is not only expensive it is a continually evolving technology. So how do you balance expenses while offering the latest and greatest equipment to your clients? Much of it will depend on your current and future budget. To understand more about the lease versus buy debate for commercial fitness equipment read "*Fitness Equipment Leasing: Sorting out the Details".

4. Write a Business Plan

Once you have a picture of how you intend to formulate your start-up business strategy - write it down. Writing a business plan will not only keep your business on the right path it will stand you in good stead should you need start-up financing. *Bplans.com offers some useful industry-specific business plan templates for starting a fitness center - you can view and download these *here.

5. Understand your Financing Options

If you don't qualify for traditional bank loans, you might want to look to a government-backed loan. The Small Business Administration (SBA) provides a guaranty to banks and lenders for money lent to small businesses, rather than lending the businesses money directly. There are many different types of loans, including the SBA Express Loan that offers small businesses the chance to get an SBA-backed loan of up to $350,000 to start-up or expand. The "express"
piece refers to the fact that your loan can be turned around in 36 hours.

Read more about SBA loans here and  even search for a business loan that fits your need using this Small Business Loans and Grants Tool.

 

6. Take Care of the Critical Start-Up Steps

Don't forget the legal and regulatory side of starting a business.

Read "10 Steps to Starting a Business" to ensure you have checked off everything from business incorporation to registering your business name.

 

7. Business Insurance

Before you open your doors for business, look into purchasing some form of business insurance to protect yourself against workplace injuries and accidents. Read "Small Business Insurance - Part 1: What Type of Insurance Do I Need?" and "Part 2: Finding and Buying the Right Policy" for tips on making the right decision.

Additional Resources

The International Health, Racquet & Sportsclub Association (IHRSA) offers a wealth of information for fitness center owners including resources on *Health and Fitness Management, *Sales and Marketing, *Human Resources, and more.

 

*Note: Hyperlink directs reader to non-government site.

 

Message Edited by CaronBeesley on 12-03-2009 07:59 AM

Selling Imported Goods within the U.S.: Get Started with this Small Business Checklist
Caron Beesley
Post date: 03/23/2010 - 20:07

Selling imported goods within the U.S. can be a lucrative business opportunity. High demand imported products such as artisan crafts, furniture and even food and beverage products such as olive oils, wine, etc. represent a significant market opportunity for savvy business owners. Margins of up to 700% can be lucrative indeed.

If you are interested in importing and selling overseas goods into the U.S. market - whether you are actually based in the U.S. or not - you will need to do your research regarding both the country of export and the country of import (the United States).

Here are some business and regulatory tips to guide you through the process of selling imported goods in the U.S.

Before you Do Anything - Check Import Rejection Laws and Trade Barriers

In addition to determining the market opportunity for a particular product or range of imported products, be sure to check U.S. trade barriers and local in-country laws to be certain that you can actually export your chosen goods out of the country of origin into the U.S.

While the U.S. is very import friendly, it does have stringent safety and quality controls that don't exist outside its borders. Likewise, foreign nations sometimes restrict the export of religious ornaments, rare or protected goods. For example, certain animal by-products such as furs and ivory as well as fake designer goods are banned or are governed by export restrictions.

Read about import goods rejections and trade barriers on Export.gov here. If you wish to import or sell agricultural products into the U.S., the Food Safety and Inspection Service provides a checklist and other information to help you comply with the laws that govern the import of meat, poultry and egg products.

For more information about trade agreements, refer to this guide on Business.gov.

Formally Set up Your Own Business

Consider formalizing your business entity before you start pursuing importing opportunities and engage in any regulatory practices. Read these 10 Steps to Starting a Business for a step-by-step guide to the planning, financial and legal steps involved in starting a business.

If you are a foreign national and plan to import and do business in the U.S., read Starting a Business in the U.S. as a Foreign National for guidance on tax and legal obligations.

Build Relationships and Network on the Ground in the Export Country

As with all wholesale procurement, you will want to meet and greet with the producer or distributor of the product(s) you will be selling. Try to establish whether the company you are dealing with has export experience, and request references. Refer to these resources for Doing Business Abroad to ensure your business travel is well planned.

Consider Hiring a Customs Broker

Many people who are in the business of importing goods into the U.S. choose to utilize a customs broker to help facilitate the laws and regulations that apply to your business, including licenses, taxes, duty fees, etc. A customs broker prepares all the documentation needed for importing goods, just as a freight forwarder does for exporters. You can read more about customs brokers here. You can also search for a certified customs broker at the *National Customs Brokers and Forwarders Association of America.

Check Whether you Require a License or Permit to Import Certain Goods

Many imported and exported products are regulated by federal agencies. If you import or export any of the types of products listed by the government here, you may be required to obtain specific licenses and permits or complete additional paperwork (the link also provides information on how to get the appropriate licenses and permits). A customs broker can also help with this aspect of importing goods.

Selling Imported Goods - Retail and Distribution Options

How will you sell your imported wares? There are a number of options from re-selling your products to niche independent stores to selling direct at fairs, festivals and markets (get tips on starting and operating a concession stand in these two posts - part 1 and part 2). You can also set up your own retail store. Read How to Start a Retail Business - A Step-by-Step Guide for more information.

Online retailing or "e-tailing" is a useful option if you happen to be based outside the U.S. and wish to sell to the U.S. market. But be sure to set up your site using a U.S. domain and host it on a U.S server. Read Starting and Growing an Online Business: An Entrepreneur's Checklist for tips about starting an online business operation.

Additional Resources

*Note: Link directs reader to non-government Web site.

Small Business Marketing: Making Social Media Pay Off for your Brand and Your Bottom Line
Caron Beesley
Post date: 03/23/2010 - 19:36

Back in October 2009, *Duct Tape Marketing, a small business marketing site, published a survey that suggests that more and more small businesses are starting to adopt social media as a means to promote their business. Despite apparent initial skepticism, 45% of the 2,000 surveyed small businesses reported that they are now using some form of social media. The statistic may seem surprising.

While many business owners already live in an online world, and find adoption of social media an inviting and essential challenge, for others simply knowing where to start with social media marketing can be an intimidating task. And as Duct Tape's founder, John Jantsch, reflects," While it's easy to get on Facebook and Twitter, there's still a gap in understanding how to make them pay". Skepticism aside, social media (and I mean everything from social networks, to blogs, to You Tube channels) is now a fundamental part of any marketing strategy. Now, more than ever, it's essential to be where your customers are; engaging with them in more active ways and nurturing a dialog that builds trust, reputation and (hopefully) a genuine interest and regard for your product or service. Here are three ways that you can make social media pay for your business:

1. Social Media for Small Business Brand Building

Social media is branding, because it provides a way for businesses to get out there and get noticed - essentially to be where your customers are and to create a presence there. But as with all marketing tactics, employing social media to enhance your brand is more effective when used as part of a wider campaign or program. For example, a boutique fashion store looking to market its new Spring collection, while continuing to build its brand and reputation, could use social media in a number of integrated ways to achieve its overarching goals. The store owner might choose to combine traditional "push" marketing tactics, such as email marketing and direct mail, with a social media element that uses the company's Facebook fan page to showcase different pieces of the collection over a period of two weeks as the items hit the store. The Facebook messaging might invite interaction by asking for feedback from "fans". The store could also use its online blog to share the inspiration for the collection, offer tips for putting individual garments together, and so on. Then Twitter and Facebook could both be pulled in to let "fans" and "followers" know that a new blog post is live.

The goal here is to establish social media communities around the brand--online hubs where a business, in this case our hypothetical fashion boutique, is actively interacting and engaging with a base of passionate fans and brand advocates. It's not rocket science, and not difficult to execute! But success really hinges on three things:

  1. Continually monitoring what is being said about your brand online.

  2. Reacting to what is said about your social media presence and fine-tuning your message accordingly (this is two-way, pull marketing at its best).

  3. Not letting your social media presence to go stale - keep it fresh and engaging without going overboard (there is nothing more annoying than a Facebook or Twitter account on steroids).

 

And it doesn't stop there, social media is also increasingly being used to "reward" fans and followers of brands with exclusive promotional offers - which leads to my next point - social media as a lead generation tool.

2. Social Media as a Lead Generation Tool

Many businesses remain skeptical about the lead generation power of social media marketing, but according to this *article in *Marketing Profs (citing a recent report from Perfomics and ROI Research), the level of openness for, and interest in, promotional and branding content from members of social networking sites is surprisingly large. Here are just some of the results from the survey:

Among Facebook users who have connected with a brand on the site:

 

  • 46% say they are likely to talk about or recommend a product.

  • 44% say they are likely to purchase a product.

  • 37% say they are likely to link to an ad for a product.

  • 27% say they are likely to post an ad for a product.

 

Among Twitter users, for example:

 

  • 44% say they are receptive to promotions and offers.

  • 44% say they have recommended a product on Twitter.

  • 39% have discussed a product on Twitter.

 

If you are interested in how your small business can use social media as a lead-generating tool, take a look at this invaluable *Practical Guide to Social Media published by American Express OPENForum.

The guide features contributions from a host of small business experts and provides practical advice to help small business owners understand what social media can offer them. In particular, *Duct Tape Marketing's John Jantsch outlines a basic framework for optimizing your social media content and online assets to help you achieve your marketing objectives. As Jantsch explains, "Lead generation today is more about being found than hunting". *Download the guide to read Jantsch's tips in full.

3. Monitor your Social Media Impact and ROI

Keeping an eye on social media ROI is not the science that traditional CRM systems support, but that doesn't mean it isn't possible. As with all things social media, social media monitoring is infinite with a host of freely-available tools to help you measure and monitor your social media impact. Read *How to Measure Social Media ROI from *Mashable
to get a better understanding of how tools like Google Analytics, Hootsuite, and more can help you monitor the influence your social media strategy has on engaging and influencing prospects.

Additional Resources

 

 

Note: Hyperlink directs reader to non-government Web site.

 

Message Edited by CaronBeesley on 12-17-2009 09:20 AM

Selling Up and Moving On; Preparation Tips for Making Your Business Sale a Success
Caron Beesley
Post date: 03/23/2010 - 18:53

Whether

you've reached the end of the road as a business owner and are looking to move

on, or have reached the point where you can 'cash-out' and reap significant

rewards from a business sale, the process of selling a business can be almost

as tricky to navigate as starting your dream business was in the first place.

In

addition to knowing when to sell, there are many decisions to be made and

obligations to be met - from structuring your sale, to finding a buyer,

managing regulatory ties and commitments, inventorying assets, transferring

ownership, and so on.

Below

are some tips and resources to help you understand some of the key aspects of

getting your business ready for sale.

Preparing for a Business Sale - Make

Sure your Business is in Good Shape

Market

factors play a huge role in the process of selling a business and much like

selling a home, getting your business ready for sale requires planning and

preparation. Just as you might keep your home freshly painted and your lawn

neatly trimmed in the run up to a sale, you will also want to make your

business looks equally attractive to a potential buyer.

Remember

the old adage 'what you put in is what you get out'.

Even

in a down economy, keeping your business in ship shape condition with sustained

sales and marketing efforts can help you position it for a quick and strong

sale when things start to pick up.

The

dichotomy is that when things do start to pick up, many entrepreneurs are

hesitant to back away from their business as they enjoy a boom time, the

consequence being that they often reject potential buyers, only to regret their

decision when their business takes a downward turn.

In

this 'Planning your Exit'

guide the Small

Business Administration (SBA) offers small

business owners tips and advice to maximize the value of their business while

developing a 'getting out' plan. It also includes a checklist of items

(including obligations to your employees, partners, property managers, and so

on) that should be considered as early in the process as possible.

Before the For Sale Sign Goes Up - Understand your Tax

Situation

Aside

from market conditions and the health of your business, another area to

consider before selling up is the tax ramifications of doing so.

As

sure as eggs are eggs, the IRS will take a large share of the money you receive

from a business sale. A CPA or tax expert can help you understand what to

expect in this regard but, as a rule, the structure of your business will

influence this number. For example most corporations, LLCs, partnerships, and

sole proprietors are asset sales - and the IRS typically treats each of these

assets separately for determining gain or loss.

Read

more at IRS.gov Sale of a Business Guide. You can also learn more about how your chosen

business structure affects your tax obligations from Business.gov here.

Setting a Realistic Asking Price for

Your Business

This

might be the first aspect of a potential business sale that keeps your mind

occupied, but deciding upon a realistic asking price requires research, market

insight, and oftentimes expert intervention. Trying to determine the worth of

your business is not easy and, while sale prices typically depend on profit

values, it is often best left to the experts to determine a fair market price.

An appraiser or a business broker can help. The latter can even help guide you

through a confidential sale and screen prospective buyers.

The

SBA offers a variety of guides to help you make sure the price is right, help

you find a buyer, help get seller financing, and much more. Read them here.

Understand how to Close Your Business

Legally - State and Local Regulatory Obligations

In

addition to taking care of your federal tax commitments (refer to this Closing a Business Checklist from the IRS) you will also need to check off several

state and local government regulatory requirements associated with selling a

business. These include but are not limited to:

  • Releasing fictitious

    'doing business as'

    names

  • Filing forms with

    your state for the dissolution or cancellation of a partnership, LLC, or

    corporation

  • The cancellation of

    any permits or licenses you hold with your county or state

  • Processing your

    final employee tax forms such as payroll taxes, withholding reports, etc.

  • Notifying your

    local Commissioner of Revenue about your changed business status

Read

*'What Steps Must I Follow to Close My Business

Legally?' (*www.legalmatch.com) to learn about the five steps you need to take to

legally close your business and check your individual state requirements here.

Get Help from these Resources

Every

business is different so it's best to get independent advice about the

particulars that apply to your business sale. The government offers many free

in-person resources across the country who can help with all stages of running,

and selling, a small business. These include SCORE, your local SBA office, Small Business

Development Centers

and more. Business.gov lists all the available free and confidential local

small business assistance resources here.

* Note: Directs reader to a non-government Web site.