Being self-employed can be fulfilling and inspiring because you are working hard to build your dreams. As author Oliver Markus Malloy said humorously, “Being self-employed means you work 12 hours a day for yourself so you don’t have to work 8 hours a day for someone else.” However, the fruits of your labors don’t come tax-free. Self-employed taxes need to be considered and treated carefully so they don’t interfere with the pursuit of your dreams. What Does it Mean…
Let’s talk about financial ratios, (and no, this isn’t a dreaded math lesson where you crawl into a corner and hide). The key here is data—data that will help you run your business more effectively, guiding your planning and measuring what is working. The use of data takes effort, but it is worth it as Arthur C. Nielsen, market researcher and founder of the AC Nielsen company said, “The price of light is less than the cost of darkness.” And…
The term cash conversion cycle describes how long it takes a business (in number of days) to convert its inventory and other resources into cash flow resulting from sales. Although some organizations also refer to it as the cash cycle or net operating cycle, all mean the same thing. The purpose of a cash conversion cycle is to determine the length of time each dollar invested in production remains tied up to cover production costs before the inventory returns a…
With the multiple payroll tax obligations you have as an employer, it can be difficult to understand what the Internal Revenue Service (IRS) expects of you. This is especially true when it comes to withholding and paying FICA and FUTA taxes. Many employers find these tax obligations more challenging to understand than basic federal and state income tax withholding. We provide a description of each tax type below along with more of what you need to know to ensure that…
Everything we do is focused on the core belief that we succeed in life by helping others succeed. This letter is one complimentary piece of our intense planning and research effort throughout the year to help in your success. Feel free to share it with anyone you know who could benefit. Big Tax Changes for 2018: Changes in the tax law generally last only until the next time there is a change in the party in power. Whether you…
The short answer to this question is – no. However, it has really become increasingly difficult to obtain a small business loan, and to realize your dream of having a small business enterprise grow into a major one, which can be a source of pride and profit for years to come. The reason it has become so difficult to obtain a small business loan is that many of the criteria used by lenders have been tightened considerably in recent years,…
Every small business has to set up an accounting cycle in order to manage its financial transactions. The accounting cycle starts by establishing your accounting system for the period, and at the end of the accounting cycle, you’ll be ready to close the books on that period so you can prepare for the next one. Here’s what’s involved with setting up your small business accounting cycle. Develop a chart of accounts As part of your accounting and bookkeeping system requirements,…
Growing your small business is usually a great thing, and in fact it’s what virtually all small businesses are aiming for. However, unless that growth is accompanied by sound financial planning, it can actually cause more harm than good. The truth is that growth often puts a pretty severe strain on any small business’s cash flow, especially when that growth is being fueled by cash flow money which is normally earmarked for expenses. It can be just as bad if…
Without funding from someone else, it’s impossible for many new businesses to expand. This means reaching out to potential investors as a possible source of revenue. If you find yourself in that position, know that you need to come extremely prepared to each meeting with a potential investor. One of the most important things you can do is take the time to prepare a highly professional business plan. For Some Investors, the Executive Summary is the Only Thing That…
Starting a new business with a partner is much less overwhelming than trying to do everything on your own. You each bring a certain level of expertise in different areas that make you stronger together. As a business entity, a partnership is a step up from a sole proprietorship. The difference is that each of you owns half the business. This also means that you divide its assets and liabilities. While a business partnership has many advantages, both people should…
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