Common Challenges For Small Businesses

Common Challenges For Small Businesses

It’s no secret that half of all small businesses will fail within their first five years. Rather than let those odds take anyone off course from their dreams, it’s possible to prepare for potential challenges by looking at areas that tend to be weak spots for other companies. They say that the devil hides in the details, so if your startup is on a bumpy road to success, solutions could be around the corner with a fresh outlook and just a few tweaks.

If you end up coming upon problems that keep repeating, it might be time to ask yourself if you’ve been listening to the feedback of others. Some improvements could come from their perspectives, and they could hold information that would better inform future strategies. Ask your employees regularly what can make their workflow more fluid and what consumes the most wasted energy. If there are systems that can be automated, weigh in with your team about the possible benefits.

Hiring stellar talent is significant. To have the most advanced products, innovative concepts, and shining public relations, you need to put effort into bringing the best possible candidates on board. The hiring process is extremely cumbersome and costly, be discerning in your choices and then cultivate a supportive working environment to ensure you retain those valuable team players for years to come.

As much as you appreciate a good worker, you also appreciate a good customer. Even if you don’t have a budget for huge discounts and major benefits, reward your customers however you can. More importantly, have the best customer service in town. Your buyers will understand you are trying to make it as a business, and if they believe in your product they’ll be proud to support you. As long as they see their support is genuinely appreciated, and they don’t just feel like “a number.”

Engage customers with thoughtful and substantive content on industry related topics they care about; keep them informed. Engaging on social media will also help better identify and understand your target demographic. The better you know who your buyers are and what they want, the better you’ll be able to exceed their expectations. Producing regular blogs and sharing them across media platforms will draw constant interest. Developing a readership will cultivate a profound connection for existing and potential clients, while elevating your brand to expert level. Informative videos are another outlet for building that subscriber list and achieving brand awareness.

Attracting new business from a cold start is expensive, but bringing people in through immersive content will not only build your company as an authority, you’ll be more likely to retain loyalty. Giving the option to subscribe to an email list is a simple was to generate leads and then further nurture those relationships as your business grows. Email marketing proves to be the most efficient promotional tool and it gives the most in return. Each promo you run should have its own landing page on your website with a sign-up box for your mailing list.

Make sure also that you’re financial plan is sound. Your records, too, are organized clearly so regular reports can be made to have a constant monitor on the fiscal health of your company. Be realistic about scaling and what you’re able to actually accomplish with current resources. Don’t put the cart before the horse, or shoot yourself in the foot, by making promises you’re not sure you can keep. When starting out as a young name in the market, your word is often all you have to offer until you can prove yourself on the record.

Starting out in the business world is thrilling and scary at the same time. Have patience and an optimistic approach when encountering setbacks. Look at the basics, as the answers you’re missing might be hidden in plain sight.

Filing Taxes As A Small Business

Filing Taxes As A Small Business

With almost enough time into the new year for recovering from the holiday season, Tax Day fast approaches. No matter if you’re a new startup or a neighborhood fixture, there’s never a wrong time to establish good practices for record-keeping that will have you prepared to get the most from your fiscal year. When it’s time to file you’ll be ready for the task ahead, which is confusing enough. In addition to your listed expenses and organized receipts these guidelines will make filing as painless as possible.

Make sure to keep track of important dates and be certain of deadlines; these vary for different kinds of business structures. Additional types of tax payments, like payroll, have more frequent due dates.

If filing yourself, know the correct forms you need for your business, on top of your personal 1040. Sole proprietors report profit and loss on a Schedule C. Partnerships report income, losses, and expenses on a Schedule K-1, which is usually filed with a Form 1065. Corporations show gains, losses, income, deductions, and credits on Form 1120 or 1120S. You may also need special forms for specific situations, like a home-based business or self-employment tax.

As you become a record-keeping ninja, it’ll be much easier to gather the information you’ll need to file accurately and make the most of your deductions. Knowing what documents you’ll need is also helpful. Prepare in advance all income statements, payroll sheets, bank and credit statements, depreciation schedules, receipts for expenses and large purchases.

If you’ve been freelancing, even part-time, your income is taxable. The IRS expects you to pay roughly 30% of your wages (after deductible expenses) to be estimated and paid quarterly.

Operating or taking your business across state lines will affect your filing, and you’ll need to file for the states you’ve lived and have worked in. Different states have different rules but you should almost always be ready to pay sales, payroll, and property taxes. Additionally, whether or not certain types of debt forgiveness are taxable, as income, will also change by state.

In many cases tax filing can be straightforward enough to handle on your own, especially with good organization and preparation. But it may be worth hiring a reputable tax pro simply for the peace of mind in knowing that not only are your bases covered, but also you’ve exhausted every deduction and retained all that you’re entitled to.

Are You Claiming These 20 Tax Deductions?

Are You Claiming These 20 Tax Deductions?

Tax season is difficult enough without adding the complication of trying to track every expense. But when you see the amount of deductions your small business may have accumulated, you’ll soon start accounting for almost everything you spend. Here are twenty ways to save that you may not have considered, for C-corps, S-corps, LLCs, partnerships, and sole proprietorships, (though some rules may vary).

  1. Rent.

If your business pays rent or a lease, that’s deductible. If you work from home you can check IRS Publication 587 for what you are entitled to. This can include mortgage interest, utilities, repairs, and insurance.

2.          Utilities.

         Electricity, water, trash, phone, etc.; all of your utilities are deductible.

3.          Office Supplies.

Everything from pens, to tissues, to light bulbs are all office supplies and they are deductible. 

4.          Furniture. 

Office furniture is considered an office supply.

5.          Software.

         Software can be claimed on the Schedule C tax form.

6.          Auto.

If you plan to deduct business related transportation expenses then it’s important to keep track of them, although the IRS does have a standard mileage rate that can be applied. Rules are different if your vehicle is solely for business purposes or split for personal use as well.  See Publication 463 for details.

7.          Travel.

If you sometimes leave your company’s home city or your tax home to conduct business, for longer than a day, than those expenses is likely deductible.

8.          Entertainment.

Schmoozing a client or throwing an office party can all be deductible, but again, different rules apply so it’s important to save receipts along with the purpose of the event.

9.          Marketing.

Anything marketing related is deductible. Everything from online ads, to business cards, to the contracted graphic designer can all be credited.

10.       Contract Workers.

Hiring freelancers and independent contractors is deductible.

11.       Wages.

Salaries you pay regular employee, including commissions and bonuses, are deductible, unless your company structure does not include regular employees, as in sole proprietorship and partnerships.

12.       Benefits.

Certain employee benefits can qualify such as insurance, education assistance, dependent care, or retirement. On Form 1040, self-employed individuals may claim personal deductions for payments made into their own retirement fund.

13.       Gifts.

Gifts for your employees are deductible, to an extent.

14.       Insurance.

Many types of insurance are deductible like business insurance and the owner’s health insurance are fully deductible. Other write-offs can come from auto, liability, property insurance, as well as costs of worker’s comp. While small businesses may receive additional credits for employee health coverage.

15.       Taxes.

Ironically enough, the taxes you pay for the cost of doing business can be written off, in addition to employer taxes. This includes unemployment, FUTA, and, FICA, and can also include from federal to local income, or sales tax and property.

16.       Money Owed.

If your business loaned money that wasn’t returned, this can be claimed as “bad debt.”

17.       Interest.

If your business is paying down a loan taken from a traditional institution, the interest payments can be deducted.

18.       Professional Fees.

Legal and accounting fees for your business are deductible.

19.       Startup Costs.

Business expenses are discussed in Publication 535, but typically startup costs are viewed as capital expenses and considered investments. These deductions can happen over multiple years.

20.       Inventory.

If your business handles a physical product or keeps any kind of inventory, then the cost of the goods you sell is deductible. This can account for cost of raw materials, storage, factory overhead, and labor.

         Knowing these entitlements are available, next tax season may start with a plan to track and organize much more of where your business is spending. Which, in the end, will keep you and your accountant smiling.

Project Management Software For Your Startup

Project Management Software For Your Startup

Project management software is designed to assist in the logistics of collaborative efforts, allowing for task assignment and oversight, communication between workers, and real-time status review and suggestions. It makes the order of operations clear and keeps contact with key players fluid. So what are the practical benefits of adapting this software into your workflow and what are the best apps available?

Generally, most management apps will handle almost any project imaginable and allow for multiple projects to be handled at one time. They will display completed tasks, every task needed to be done, and the estimated amount of hours needed to complete. 

Trello offers a board that features “To Do,” “Doing,” and “Done” sections, and they feature cards for timelines, calendars, task assignments, and productivity metrics. They boast a “no-code automation” intended to reduce tedious clicks on the back end. Trello works well on projects that have a clear process and may also need to maintain working lists of ideas.

Basecamp is great for those who want to centralize their projects in a simple streamline format. Their interface can be used by unlimited users, without any training. Their straightforward board displays a message board, group chat, schedules, to-do’s, automatic check-ins, and a tab for docs and files.

Asana comes with a heavier price tag, but also more ability. It’s perfect for work that’s done primarily remotely. It’s designed to not only streamline tasks, it also oversees marketing campaigns, product launches, sales, operations, and more. Their boards feature “To-do,” “In-progress,” and “Review-ready” sections, that “define each stage of work to see what’s important and where things are getting stuck.”

Free project management apps are available with a slimmer selection of features, but still prove useful if free is what’s affordable. Trello and Basecamp are budget-friendly and popular with smaller businesses. Asana offers a basic service for free to startups as they get off the ground.

There are countless management platforms on the market. When shopping for the ideal fit for your company, consider the size of your workload and number of people working, as well as the organization for your operations. Investing project management software can show you specifically where your efficiency can improve when assigning and executing tasks. Additionally, by allowing for instant tracking, improvement, and group communication the programs themselves are a serious quantum jump in efficiency for all of your projects. 

Logos And Branding For Startups

Logos And Branding For Startups

So you have the amazing ideas, the awesome product, and all your ducks in a row. You’re ready to launch, but how are your future buyers going to recognize you as something new and different, and how will they remember you later? Have you developed a clear brand identity that will make people gravitate towards you once they know how great your company really is? Before adventuring in advertising, you need a strong brand that naturally feels familiar to your target customer. 

Beyond graphics and icons, what is at the heart of your business? What is your mission that sets your venture apart from the competition? How does this impact the client, the community, the world? How do you view and nurture your relationship with your customers, and even your suppliers? All of these pillars make up the framework of the company your logo represents. 

Your brand tells the story of your business and why it exists. It should be consistent and authentic in all platforms. Once you have a dynamic logo, and spend some time creating an overall mood using colors, typography, and compelling visuals, it’s vital to amplify your message through engaging content. All of this should speak to your prime demographic and echo your company as an authentic voice and an authority in your field. By being clear in what your company does, and delivering on the promise of service it provides, you gain customer trust and loyalty.

As you uncover your brand identity, which will inevitably become the personality that ambassadors your company, make sure it is consistent and tangible. You want to present an idea, and a look, that can be transmitted fluidly between social media, print outlets, as well as when you hire freelancers for promotional work like photos, copy, and design. Though it’s important to not become repetitive, you also want to have basic materials ready for fast turnover, and not need to spend extra hours preparing content from scratch. 

With this, you have a strong foundation for marketing campaigns to form themselves upon. A sentiment has been created for people to connect with on an emotional level; they already like your brand. Even when first introduced to your product, its slick label and sustainable package attracted a new buyer. Or your site is super user-friendly and subscribers enjoy great bonuses and excellent customer service. Have a clear and concise mission, cohesive yet innovative messaging, and cover your cornerstones that act as guidelines for your company to abide by, then promotion becomes more about announcing news and information, as the brand itself attracts the business.

​​Where Do Startups Get Money

​​Where Do Startups Get Money

With the rise in popularity of venture capitalism and the emerging world of angel investors, it would seem that the bulk of new small businesses are getting their seed money from private sources, but a recent study shows that traditional methods of funding are still the dominant source. 

Research by the Kaufman Foundation found that around 65% of financing comes almost equally from bank loans and personal savings. About 6% relied on friends and family, and just over 10% of startup cash comes from private investment. Surprisingly, another 6% of entrepreneurs use credit cards despite the high interest rates, and only 2% take advantage of available government programs.

It is highly recommended for any small business owner to consult with the Small Business Administration (SBA). Even if you are only at the stage of just thinking about starting a business, or have been a fixture on the block for years, it makes sense to find out what your best options might be for optimized borrowing or possible grant money, in order to materialize your goals.

Resources for those with the next big idea that will have the investors bidding, can post their profiles or companies on pages like Gust and AngelList. These are sites where investors can shop for you. BusinessLoans.com is a service that, like the SBA, will review your information and help determine what’s most suitable for your needs. They can connect you with their network of partners who offer long or short-term loans, lines of credit, or merchant cash advances.

As much as we love those amazing stories of angel investors and the skyrocketed success for starry-eyed dreamers, and it does happen, that story is still not the norm. The most proven route to a strong foundation and promising future is still through modest means of small loans and personal investment. Gain grassroots word of mouth through good service and effective social media, and work smarter not harder with efficient spending and operations. While it is possible to become the next venture star, and there’s no reason to not shoot for the moon, but for the vast majority of thriving small businesses their story was of hard work, smart choices, and giant leaps of faith.