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3 Good Reasons You Should Hire an Accountant

Many small business owners keep their own accounting books. Some are meticulous and well-suited to the task.

Others shove receipts in the drawer and scribble notes on scraps of paper about where the money is going. That can make things pretty tricky come tax time.

Some business owners put off hiring an accountant because of the expense, but since most are paid by the hour, hiring one doesn’t have to be prohibitively expensive.

There are many good reasons to hire an accountant. Here are three.

1. Payroll

There are so many payroll regulations that it can be tough to learn them all. Plus, they are always changing.

Deviating from federal regulations can result in hefty fines. By having an account handle payroll, you won’t have to worry about keeping current.

2. Tax Time

This is one of the best reasons to hire an accountant. Business tax regulations change each year and are difficult for many “lay people” to understand.

You need someone to guide you throughout the year about what will be best for your business come tax time. If you wait to hire someone just to do your taxes it will be too late to take advantage of some money saving tax strategies.

Instead, you need someone who knows your business and can guide you – starting on January 1 – about how to save money when tax time comes around.

3. Free Time

Hiring an accountant to handle your books will take one big burden off of your shoulders and will free up your time to run and grow your business.

Keep in mind that you should never hand your books over 100% to an accountant. You need to know every detail about what is going on at all times.

This will remove the possibility of someone skimming off the top or your small business being involved in any unsavory practices.

Hire a good accountant, but always know what is in those books. It is, after all, your business.

How to Start a Website

To some small business owners, the process of starting a website for their business seems like a mystery. The truth is that giving your company a web presence is easier and more affordable than ever before.

It’s important for every business to have a presence on the web. It makes it easier for customers and potential customers to find you, and it gives you a venue in which to show off your professionalism and highlight your business’ best features.

You don’t have to be computer savvy, and for just a few hundred dollars you can have a simple website up and running.

Domain Name

The first thing you’ll need to do is decide on a domain name. It should be reflective of your business and, as much as possible, be easy to remember. If your first choice of a name isn’t available you’ll have to select something else, so be flexible.

Once you find an available name, you’ll need to register that name. You can register the name for as little as one year.

It’s important to keep the registration current or someone else will be able to take the name.

Web Hosting

Next you’ll need to select a company that offers web hosting. Web hosting starts around $20.00 a month and goes up from there depending on the type of website and the number of visitors to the site.

The hosting also normally includes a set number of email boxes.

Web Design

Designing a website yourself is simpler than ever. There is software available that make it so simple that in a just a few hours you can design your own site.

If you don’t feel comfortable designing your own site, you can pay your web hosting company to do it for you.

You can also hire a web design firm, but that is typically going to be more expensive than going through your web hosting company. Whoever you use, be sure that YOU will own the site and that everything is registered in your name or your business name and NOT in the name of the designer or hosting company.

Take your small business to the next level by creating a web presence that will impress!

Sole Proprietorship vs. LLC

One important decision that you will have to make regarding your business is whether to function as a sole proprietorship or as a limited liability corporation (LLC).

While there is some cost involved in setting up an LLC, doing so removes personal financial risk should any type of legal action be brought against your small business.

Limit Your Liability

When you operate as a sole proprietorship, the liability for the business is entwined with your personal finances. This means that any assets you have, including your home and personal savings accounts, can be attached should your business get into legal trouble.

Such a situation could devastate you financially.

If, however, your business operates as an LLC, your personal assets cannot be considered in the event of a lawsuit. For example, if your business were to be sued, only assets listed under the business would be considered in any resulting judgment.

Your personal accounts and other assets would not be taken into consideration.

Cost Considerations

The cost to set up an LLC varies. There are companies that do nothing but help small business form an LLC. These companies charge anywhere from $75-$350 for their services.

Another route is to enlist the help of a lawyer. While this will cost a bit more, you will have the peace of mind that everything was done correctly.

It is a wise decision to spend the money to form an LLC before you begin full operation of your small business. The small investment you make now will provide you with important protections should anything go wrong in the future.

Home Office Tax Deductions

Keeping your office at home has many benefits. Aside from the ease of rolling from bedroom to office without ever having to step outside, there are lots of tax benefits that result from working at home.

Because different locations have their own rules about types of businesses that can be run from a residence, as well as directives about office size and other rules, it’s impossible to include a comprehensive list of tax benefits that applies to everyone.

That said there are some federal guidelines that generally apply to all home businesses.

The Space

You can claim a percentage of your mortgage and utilities equal to the percentage of your house that is being used by the business.

For example, if the square footage of your home office is 10% of the total space of your home, then you can include 10% of your mortgage and utilities as a deduction.

Improvements

Improvements made to the home office are 100% deductible.

Improvements made to the rest of the house which have an impact on the office - such as central air - are deductible under the same percentage rules as the mortgage.

Furnishings

Items purchased to furnish your home office are deductible. Items purchased for the rest of the house are not.

Keep in mind that to qualify for these deductions, you must have a dedicated home office that is used ONLY for that purpose. Also, you must not have another office space that you work from.

The examples of tax deductions listed here are by no means exhaustive. There are many others that can help you save thousands of dollars on your taxes.

Of course, you will want to check with your tax professional to be sure you are taking advantage of all possible tax benefits.

3 Great Small Business Tips for Moms

Many moms dream of the day they can work from home or run their own small business. Running a small business from your home when you have children can be a difficult task.

However, it also gives you the freedom and flexibility to be home with your children and care for your family. To be successful at both simultaneously requires skill and planning.

Here are 3 great tips for raising your family and running a business all at the same time:

1. When you run your small business from your home office it is important to have a dedicated work space.
   
   Naturally, not everyone has a room they can designate as their office. However, it is important to have an area in which your desk, files and phone can be kept and used.
   
   That space should be quiet and organized.
2. Keeping a time schedule is an important part of running a small business from home successfully.
   
   When you have kids you need to make sure you have time blocks set aside to make business calls in quiet. If your children are younger, this may be nap time - if they are older, it may be during school hours.
   
   Some moms schedule play dates with other ‘mompreneurs’ to trade quiet time with them.
3. Make sure your kids don’t feel neglected.
   
   If your children are starving for attention they will act out in an effort to get your attention. Schedule time to just be a mom during the day.

Running your household smoothly and raising your kids is just as important as your business. In fact, that is the primary reason many women become ‘mompreneurs’!

Overcoming 2 Common Home Business Pitfalls

If you’re a small business owner, you’ve probably run into a few obstacles of the non-financial variety.

Knowing how to deal with these 2 small business pitfalls can make your life a whole lot easier.

The Neighbors

You may be very enthusiastic about your new business; however, your neighbors might not be, especially if you see clients in your home office.

When you have a home office, you run the risk of offending the neighbors if their constant presence results in increasing traffic on your street. That’s why you have to let your neighbors know that this may happen beforehand.

This will help keep everyone informed and on good terms. If your neighbors are reasonable, then they will let you know of any concerns they have before they call city hall or the police to complain.

In time, some of your neighbors may end up being your customers!

Being Constantly On Call

If you work from a home office, you’ve probably already set limits on your office hours and when you’re available to work. But that doesn’t mean that your customers will see it that way.

Unfortunately, many people think that if you work from home, you’re constantly available. It’s not fair, but that’s the way it is. So, you have to make a conscious effort to draw the line between your work time and off time.

Here are a few ways to do that:

• Make sure your office has an entrance. This is one way to convey to customers that you are a professional and keep professional hours. Don’t allow customers to come into contact with the rest of your home.

• Let customers know your office hours. You can post a sign on your office door or window with your working hours. Request that all customers make appointments.

• Do not deviate from your ‘appointment’ policy. If customers show up unexpectedly, let them know (once again) that they need to make an appointment in the future. If they do it again, politely inform them that you have another commitment.

Running a small business is tough enough. Stick to your guns concerning the above 2 obstacles, and you’ll experience a lot less stress.

How to Put the Best Face on Your Small Business

No matter what type of business you have, your image is very important. Having a good image can make the difference between clients wanting and not wanting to do business with you.

Proper Attire

Everyone has their own idea of how to dress. If you’re working late at night at home, then no one will care if you’re wearing your Barney PJs. However, meeting with a client is an entirely different matter.

Generally, you should dress according to your industry and the client. If you’re a financial consultant, then clearly a suit and tie is appropriate. If you own a warehouse, then khakis and a polo shirt is probably fine.

Whatever your business, make sure you think of the client when deciding what to wear.

Good Telephone Manners

This may seem like a no-brainer; but you’d be surprised at how many small business owners don’t pay attention to the way they – and their employees – answer the phone.

Instruct your employees to have a cheerful voice and use their first names when they answer the phone. For most small business owners, a phone call is often the only chance they have to make a good impression on potential customers.

Make sure you make the most of it.

Inviting Office Environment

How your office looks also speaks volumes about you and your business. An office that is untidy and disorganized says to clients that you aren’t a serious business owner.

Make sure that your office is warm and inviting – and neat. The better your office looks, them more clients will be comfortable doing business with you.

First impressions count. Follow the above tips and you’ll also put your best business foot forward.

3 Small Business Financial Considerations

If you operate your business from home, it may seem as if you are doing so for free. However, this is not necessarily the case.

Below are 3 important aspects of owning your own business:

1. Make Sure Your Business Is Covered By Insurance
   
   In some cases, your homeowner’s insurance policy may cover any losses incurred if you run your business out of your home. In other cases, you may have to get a separate rider.
   
   Don’t take for granted that your homeowner’s policy is sufficient. Make sure you get advice from your insurance agent and purchase a new policy if necessary.
2. Make Sure You Follow Zoning Laws.
   
   Depending on where you live and the type of business that you have, you may not be able to run the business out of your home.
   
   You can check with your local zoning office or city hall to find out if your type of business can be run from your home.
   
   If you can run the business from your home office, then you may have to pay a fee to do so. If not, then you will have to find another location for your company, which means you will have to pay rent on a monthly or yearly basis.
3. You May Have To Use Your Savings To Start Your Small Business.
   
   There are certain expenses that you will have when your business is in the startup phase, such as equipment, computers, office supplies, etc. If these expenses are small, then you can probably use your own money.
   
   However, if you need to purchase inventory or have other large expenses, you may have consider taking out a loan.

Making sure your finances are in order is the first step in starting your own small business. By taking the above considerations into account, you can ensure that your company will be on firm financial footing.

You Can Start a Small Business as an Immigrant

Any individual may form a company. Generally, the minimum age is 18.

In most states, you are not required to be a resident of the state to form a company, and some states even allow one company to form another company.

Immigration Concerns

People who are not citizens or legal permanent residents of the United States are free to organize and run any type of business organization in their own name.

The LLC would be the most advantageous, because it allows foreign nationals as owners (unlike an S corporation) and it avoids corporate taxation (unlike a C corporation). Two legal issues should concern foreigners when starting a business—their immigration status and the proper reporting of the business’s foreign owners.

The ownership of a U.S. business does not automatically give you the right to enter or remain in the United States. Different types of visas are available to investors and business owners, and each of these has strict requirements.

A visa to enter the United States may be permanent or temporary. Permanent visas for small business owners usually require investments from $500,000 to $1,000,000 that result in the creation of new jobs.

However, if structured right, there are ways to obtain visas for smaller amounts of money.

Temporary visas may be used by small business owners to enter the U.S. These are hard to get because in most cases, the foreigner must prove that there are no U.S. residents qualified to take the job.

United States businesses that own real property and are controlled by foreigners are required to file certain federal reports under the International Investment Survey Act, the Agricultural Foreign Investment Disclosure Act, and the Foreign Investment in Real Property Tax Act (FIRPTA).

If these laws apply to your small business, consult an attorney who specializes in foreign ownership of U.S. businesses.

How to Develop Your Business Strategy

Business Vision

You can describe what the business is that you want to build, but you must also understand what makes it the right business for you. Determine the skills and experience it takes to make the business successful.

Which of those critical factors are among your greatest talents? Which of those factors are also the tasks you love to do, twenty-four hours a day, seven days a week? The business that is right for you fits your individual expertise and your personal motivators.

Personal Values

Examine your personal values in order to set meaningful goals and objectives for your business.

High-growth, high-reward, high-risk enterprises are not for people who value security, stability, and tranquility.

Acknowledge what is important to you so that you can build your values into your business.

Goals

When you understand what your business is and how you fit in, you can set goals. Given the market opportunities and your personal values, how large could your company become? How profitable?

What is the time frame for accomplishing this and how will you and the company’s other stakeholders benefit from these accomplishments?

Market Definition

Market issues make the difference between success and disaster. Identify a problem and identify the specific groups of people who have the problem.

How does the market currently solve this problem? Every possible solution—including ignoring the problem—represents your competition.

Business Model

Your business model does not refer to the wheelbarrow-sized pile of financial projection spreadsheets that your favorite number cruncher produces. Instead, it refers to how your company operates.

Not all business model decisions are made at start-up; however, the issues and possible alternative solutions should be identified.

Organizational Structure

As part of the planning process, you will need to determine which type of entity best supports the achievement of your goals. Input from your management team, as well as legal and other advisors, will help you in the decision-making process.