Download Volume 13, Issue 4 Document Here

BizBoost News
Volume 13, Issue 4
Distribution 8/12/2023; Publication 8/15/2023

Understanding Depreciation
Depreciation can be a tricky topic to understand for small business owners. It doesn’t affect cash, but it does affect your profits. It also affects how much tax you pay. Let’s dive in with a simple explanation of depreciation for accounting purposes. 

Large Purchases
When you purchase a car or piece of equipment for your business that will last for many years, it takes quite a bit of cash. The car or equipment is going to last many years and benefit your business over many years, not just the current one.

In accounting, we try to match the timing of when something is useful to when it affects your profits. This is called the matching principle. Rather than immediately expense this asset that’s going to help your business over many years, it makes sense to expense portions of it over the time you use it. Otherwise, your business would show a huge loss in one year and excessive gains in subsequent years. This is the concept behind depreciation.

Let’s say you bought a piece of equipment for $20,000 that will last five years. With depreciation, you can expense $4,000 per year for five years, spreading out the benefits of the machine against the revenues it is helping you earn.

Useful Life and Salvage Value
To standardize the way all businesses handle depreciation, each asset is assigned a useful life based on its asset class. We won’t go into these details here, but your accountant will have a table that they use to calculate the right amount of depreciation for the assets you purchase in your business. 

Some assets will also have a value at the end of their life. This is called salvage value. In the above example, we assumed it was zero.  

Depreciation Methods
There are many methods to come up with the amount to use for depreciation. The above example uses a method called straight line, and there is a formula attached to each method. This is the formula for calculating straight-line depreciation:

Annual Depreciation Expense = (Asset Cost – Salvage Value) / Asset’s Useful Life

Other depreciation methods that are accepted include double declining balance, units of production, and the sum of the years’ digits, plus more than half a dozen others. Each comes with its own formula.

How Cash Is Affected
While cash may be affected in the year of the asset’s purchase, depreciation is a non-cash expense. This confuses many small business owners and is one of many things that causes the amount of profit to differ from the amount of cash on hand.

Land and Other Exceptions
If your company owns land, it is recorded on your balance sheet as an asset.  While it certainly benefits your business over time, it is an exception to the depreciation rule. Land is not depreciated. Any buildings on the land are depreciated. The reasoning is that land doesn’t lose its value over time and does not need to be replaced like other assets.

Only physical assets expected to benefit the company for more than a year are depreciated. Most of these fall into a category called fixed assets. To avoid costly accounting expense, these assets also must be substantial in cost (or material, as we say in accounting). A pencil might last longer than a year, but office supplies are too inexpensive to depreciate. There is a limit on the value of what is cost-effective to depreciate. 

The Journal Entries
A sample simplified journal entry to record the initial purchase of an asset looks like this:

Debit Fixed Asset (either the asset is named and an account created for that asset or a separate detailed fixed assets schedule is maintained to keep the chart of accounts cleaner)

Credit Cash or Loan or both
To record depreciation in the first year, a contra-asset account is set up. A contra-asset account is an asset account with a negative, or credit, balance.

Debit Depreciation Expense
Credit Accumulated Depreciation (a contra-asset account)

The Fixed Assets portion of your balance sheet is where these accounts would go: 

• Asset
• Accumulated Depreciation (this is the contra account)

For small businesses, depreciation can be figured once a year as an adjusting entry to save bookkeeping time throughout the year. Or it can be figured more often so there are no surprises with the amount of profit the company is making.

Taxes versus Book Depreciation
For tax purposes, depreciation is a huge topic. Many times, it’s beneficial for a company to write off depreciation faster, so fewer taxes are due. Currently, there are tables provided by the IRS as well as maximum depreciation limits. Right now, there is bonus depreciation (until the 2026 tax year) as well. 

Large businesses may use one method for depreciation for their accounting records to investors, and another depreciation method for tax purposes to reduce taxes. 

Depreciation is a massive topic, yet a simple concept. Your accountant can help you with the nuts and bolts of depreciation so that you have a plan that’s best for your business. 

*** 

Tweets

Insert a link to your newsletter, website, or blog before you post these:

Our latest blog: “Understanding Depreciation” is available now! Subscribe here: [link]

Depreciation can be a tricky topic to understand for small business owners. It doesn’t affect cash, but it does affect your profits. Learn more in our latest blog article: [link]

In accounting, we try to match the timing of when something is useful to when it affects your profits. This is called the matching principle. Learn more in our latest blog article: [link]

To standardize the way all businesses handle depreciation, each asset is assigned a useful life based on its asset class. Learn more here: [link]

Some assets will have a value at the end of their life. This is called salvage value. Learn more in our latest blog article: [link]

While cash may be affected in the year of the asset’s purchase, depreciation is a non-cash expense. Learn more here: [link]

If your company owns land, it is recorded on your balance sheet as an asset. While it certainly benefits your business over time, it is an exception to the depreciation rule. Find out more in our latest blog article: [link]

For small businesses, depreciation can be figured once a year as an adjusting entry to save bookkeeping time throughout the year. Discover more in our latest blog article: [link]

Download Volume 13, Issue 3 Document Here

BizBoost News
Volume 13, Issue 3
8/1/2023

Building a Resilient Supply Chain in Your Business

Supply chain breakdowns continue to stymie small businesses, causing them to lose sales and profits. Whether your business has been affected or not by supply chain delays and shortages, it’s a good idea to take steps to make your supply chain as resilient as possible.

Your supply chain starts with the acquisition of materials that go into what you sell. It includes the production of your products and services. And it doesn’t end until the customer receives the product or service you offer, as well as any help they need to consume your product.

Here is a process to help you evaluate your supply chain and improve its resilience, to avoid future bumps in the road.     

Start with an Inventory of Your Suppliers
To evaluate your supply chain, a good place to start is to make a list of vendors. An easy way to get this vendor list is from your accounting system. Make lists from your list:

•          Primary vendors that are crucial to your business. This includes vendors from which you purchase goods for resale, and can also be vendors such as your online shopping cart because if it goes down, you lose sales. These are you, mission-critical vendors.
•          Secondary vendors that provide support indirectly, such as maintenance to machines you use or vendors that provide human resource benefits. Your business won’t be terribly disrupted if something happened to these vendors. 

Once you’ve made your lists, let’s focus on your primary vendors first. If this list is large, you may want to further prioritize it by sorting the vendors you are most dependent on to the top of the list. 

Contingency Planning
For each vendor on your primary list, do some research to find alternatives. You want to develop a deep bench of suppliers who can support your business. If one supplier has trouble meeting your orders, you will be more prepared and can consider switching. You’ll need to develop relationships with these alternate vendors, and perhaps even use them a time or two to test the relationship. 

Many factors can go into selecting alternate vendors: price, quality, service, delivery time, shipping costs and methods, country of origin, location of warehouses, troubleshooting effectiveness, and much more. You know your industry best and what you need, so you can develop a table of criteria to evaluate potential new vendors. The ultimate goal is to have backup plans all along your supply chain.

Once you’ve gone through your primary list, you can start on the secondary vendors. 

Purchasing Department
Large companies have entire purchasing departments to do this kind of work. If your business is small, you may be able to delegate portions of the list to trusted and well-trained employees. Know this type of work can take a long time. It will also be changing as new vendors spring up and older vendors retire or go out of business. 

Internal Operations Including Selling and Distribution
Now that you’ve taken care of your suppliers, the next big step in supply chain efficiency is to standardize your operations. Take a look at your internal operational processes to ensure they are as efficient as possible. Create policies and procedures to ensure quality and customer satisfaction.

This includes reviewing the production process as well as selling and distribution, all the way to customer service. You may have covered this while you assessed your vendor list, but if not, you can do it now.   

One example is how you get your product or service to your customers. Be sure there is an alternate method in case your primary distribution method breaks down.

Again, this is a marathon, not a sprint. Take your time to do this project right, and it will benefit you for years to come.

Risk versus Reward
In some cases, it may simply not be cost-effective to have a fully developed contingency solution. It may be more cost-effective to take the loss if it happens. You’ll want to evaluate the circumstances and come up with the right solution that works for your business. 

Take the time you need to improve your supply chain resilience, and your business will be more valuable and more profitable for it.

***

Tweets

Insert a link to your newsletter, website, or blog before you post these:

Our latest blog: “Building a Resilient Supply Chain in Your Business” is available now! Subscribe here: [link]

To evaluate your supply chain, a good place to start is to make a list of vendors. An easy way to get this vendor list is from your accounting system. : [link]

Supply chain breakdowns continue to stymie small businesses, causing them to lose sales and profits—but there are solutions! Learn more in our latest blog article: [link]

A big step in supply chain efficiency is to standardize your operations. Take a look at your internal operational processes to ensure they are as efficient as possible. Learn more here: [link]

How do you get your product or service to your customers? Be sure there is an alternate method in case your primary distribution method breaks down. Learn more in our latest blog article: [link]

#BusinessTip Whether your business has been affected or not by supply chain delays and shortages, it’s a good idea to take steps to make your supply chain as resilient as possible. Learn more here: [link]

DID YOU KNOW… When it comes to supply chains, it’s important to develop relationships with alternate vendors, and perhaps even use them a time or two. Find out more in our latest blog article: [link]

Take the time you need to improve your supply chain resilience, and your business will be more valuable and more profitable for it. Discover more in our latest blog article: [link]

Download Volume 13, Issue 1 Document Here

BizBoost News
Volume 13, Issue 1
7/1/2023

Understanding Goodwill in Accounting

You might know the word “goodwill” as the name of a local charity where you can drop off household items you no longer need. It might also be something that’s talked about at church. But in accounting circles, goodwill is something completely different. 

Goodwill is an account on the balance sheet of certain businesses. It falls into the category of assets, and specifically, it’s an intangible asset. An intangible asset is something that is not physical. Examples of other intangible assets are copyrights, patents, and trademarks. 

Goodwill arises when one company purchases another. When a company pays more for the company that it is acquiring, the difference is booked as goodwill. Goodwill represents the extra value that the acquisition provides for the purchasing company. 

When one company buys another, the assets and liabilities of the acquired company are taken over by the purchasing company. They are recorded on the purchasing company’s books at their fair value. The balancing entry between the fair value of the assets and liabilities purchased and the purchase price is booked to the goodwill account.     

What could lead a company to pay more for another company? Things that are not on the balance sheet but are valued could include a solid customer base, great employees, brand reputation, the company name and what it means, technology owned by the company, and a great reputation for customer service.

Normally, an intangible asset like goodwill would be amortized, but it is not. Amortization is when a portion of the asset is expensed each year. A patent, for example, is amortized over its useful life, not to exceed 20 years. Amortization is comparable to depreciation. Some physical assets are depreciated, while some intangible assets are amortized.

Before 2001, goodwill was amortized for up to 40 years, but the accounting rules have changed to something less arbitrary. Goodwill must be checked each year for “impairment.”  

Goodwill impairment happens when the value of the acquisition declines after it has been purchased. One of the most famous impairments write-downs occurred right after this new accounting rule was implemented. In 2002, $54.2 billion in impairment costs was reported for the AOL Time Warner, Inc. merger.

More recently, in 2020, a few of the largest impairment write-downs included companies, such as Baker Hughes, Berkshire Hathaway, and ATT, due to the latter’s acquisition of DirecTV in earlier years. In 2022, impairment write-downs included Teladoc Health and Comcast. Covid-19 was in part responsible for a large number of impairment write-downs in recent years. 

If impairment is required to be booked, the journal entry will look like this:

Debit Impairment Expense (increases expenses and therefore reduces profits)

Credit Goodwill (reduces the asset amount)

If your company has acquired other companies and you have a goodwill account on your balance sheet, you can work with your accountant to determine how to check for impairment and if you are required to correct your books. 

***

Tweets

Insert a link to your newsletter, website, or blog before you post these:

Our latest blog: “Understanding Goodwill in Accounting” is available now! Subscribe here: [link]

In accounting circles, goodwill refers to an account on the balance sheet of certain businesses. Learn more in our latest blog article: [link]

When a company pays more for the company that it is acquiring, the difference is booked as goodwill. Learn more in our latest blog article: [link]

If your company has acquired other companies and you have a goodwill account on your balance sheet, ask your accountant how to check for impairment. Learn more here: [link]

What could lead a company to pay more for another company? To start, a solid customer base. Learn more in our latest blog article: [link]

#BusinessTip Goodwill impairment happens when the value of the acquisition declines after it has been purchased. Learn more here: [link]

DID YOU KNOW  . . . One factor that could lead a company to pay more for another company is great employees. Find out more in our latest blog article: [link]

Goodwill represents the extra value that the acquisition provides for the purchasing company.    Discover more in our latest blog article: [link]

Download Volume 12, Issue 25 Document Here

BizBoost News
Volume 12, Issue 2
For distribution 6/12/23; publication 6/15/23

Five Summertime Strategies for 2023

We’re six days away from the first day of summer, and a few weeks away from the midpoint of the year. It’s the perfect time for taking a strategy check in your business to see how you’re doing for the first half of 2023 as well as to plan something fun and productive for summertime.  

Here are five business strategies to help you regroup, reassess, and rejuvenate your business halfway through 2023.  

1.             Celebrate Your Accomplishments
Take time to pat yourself on the back and congratulate the people around you for the goals you’ve reached and the efforts your team has made on your behalf. You might be shocked when you think about how far you’ve come. Maybe you’ve hired another team member and your team is the largest it’s ever been; perhaps you’ve reached record revenue goals; possibly you’ve solved a complex supply chain problem. 

We all could use more praise and more celebrations in our lives.  Perhaps you can organize a party, or if you are not the partying type, a quiet word individually with your team can go a long way, maybe more than you know.

2.                  Take a Vacation
If you’re feeling quite burned out, the best thing you can do is stop and take a breather. There’s nothing better to rekindle your creative juices than to get away from the business for a while.  Summertime is when most people take a vacation, so if your business is not having its busy season, this might be a good time to go away, even if for a little while.  

If you’re anxious about being away from your business, you’re not alone.  In your annual planning process, plan for and block out your vacation way ahead of time.  Book the reservations with no refunds several months in advance so that you won’t chicken out at the last minute.  There is life beyond your business, and you will be a better business owner when you take regular breaks away.  

3.                  Schedule a Mid-Year Review
How has your business fared for the first half of 2023 compared to the goals you set at the beginning of the year? Are you on track to reach your goals? Should you design a course correction or are you on track? Maybe you’re even ahead of plan!

You can make this process as informal or formal as you want. Some businesses hold retreats; you may simply need some quiet time on a weekend when all your family is busy doing something else.   

4.                  Be Selective About the Projects You Start    
Is your plate too full?  Entrepreneurs that wear many hats would probably say “yes” to that question, so the next question is do you have to do it all at once? Ask yourself what you can afford to stop doing that doesn’t make sense. Is there a project or two that can wait? If so, decide to stop stressing about not getting it done and give yourself permission to put it on the back burner for now.  

5.                  Play Big
Maybe you’re not playing big enough. You might be busy, but are you busy with the things that will take your business to the next level? Do the thing you’re afraid to say “yes” to; the thing that you know will transform your business and get you closer to your dreams.  

If you’re putting off a project that you know will pay back handsomely, then shelve everything you’re working on and start on the one that will reap the most rewards. It could be a new product or service line, a new ad campaign, a new hire, a new joint venture, new financing, or even a new partner, which is very big indeed. You likely know what it is you need to do; your gut has been telling you for a while now. Just get it started, and it will then become easier.  

Summertime is a great time to regroup, re-energize, and refresh your business. Try one of these five tips to spice up your summer as well as your business success.    

*** 

Tweets

Insert a link to your newsletter, website or blog before you post these:

Our latest blog: “Five Summertime Strategies for 2023” is available now! Subscribe here: [link]

It’s the perfect time for taking a strategy check in your business to see how you’re doing for the first half of 2023 as well as to plan something fun and productive for summertime.  

 Learn more in our latest blog article: [link]   

How has your business fared for the first half of 2023 compared to the goals you set at the beginning of the year? How can you improve? Learn more in our latest blog article: [link]

#BusinessTip: Summertime is a great time to regroup, re-energize, and refresh your business. Try one of these five tips to spice up your summer as well as your business success.    

 Learn more here: [link] 

DID YOU KNOW…Summertime is a great time to regroup, re-energize, and refresh your business.  Find more here: [link] 

DID YOU KNOW…We’re six days away from the first day of summer, and a few weeks away from the midpoint of the year. It’s the perfect time for taking a strategy check in your business to see how you’re doing for the first half of 2023! Learn more here: [link] 

There is life beyond your business, and you will be a better business owner when you take regular breaks away. Summertime is a great time to regroup!

Learn more in our latest blog article: [link] 

You might be busy, but are you busy with the things that will take your business to the next level? Sign up for our newsletter to find out: [link]

Download Volume 12, Issue 24 Document Here

BizBoost News
Volume 12, Issue 24
For publication 6/1/23; distribution 5/28/23

Cool Tech Tools: ChatGPT

The topic of artificial intelligence (AI) has been in the news quite a bit recently, and one of the reasons is the launch of an AI chatbot called ChatGPT. The GPT in ChatGPT stands for generative pre-trained transformer, which is a program that can realistically write like a human and interact in a conversational way. Basically, you can type in a complicated question, and ChatGPT will give you an amazingly lifelike, most-of-the-time accurate answer. 

ChatGPT was launched in November 2022 and developed by OpenAI, an AI research lab tasked with developing a friendly AI. OpenAI has both a non-profit and for-profit component in its organizational structure. 

As of this writing, ChatGPT is offered at no cost, but you must open an account and verify both your email address and phone number to access it. Once you do, the prompt is simple; just ask it a question. You can get access here: https://chat.openai.com/chat

Here is a sample answer to the question, “What are debits and credits?”

ChatGPT: “Debits and credits are terms used in accounting to describe the money movement into or out of an account. In accounting, every transaction involves at least two accounts, and each account is either debited or credited.”

“A debit is an entry that increases assets or expenses or decreases liabilities or equity in an account. For example, if you buy office supplies for your business, you would debit the office supplies expense account and credit the cash account.”

“A credit is an entry that increases liabilities or equity or decreases assets or expenses in an account. For example, if you sell goods on credit to a customer, you would debit the accounts receivable account and credit the sales revenue account.” 

“Debits and credits are used to keep track of the financial transactions of a business or organization. They are important tools for recording and analyzing financial information, and are essential for preparing financial statements and tax returns.”

Yes, ChatGPT is a touch verbose at times.  

Here is a tax example:

Question: Qualified Business Income - earnings limitations if NOT a specified service business

ChatGPT: “Under the current tax law in the United States, if you are a qualified business owner who operates a non-specified service business, you may be eligible for a tax deduction of up to 20% on your qualified business income (QBI).”

“However, there are certain limitations on the deduction, including a cap on the amount you can deduct based on your total taxable income. For the tax year 2022, the threshold for the taxable income limit is $329,800 for married filing jointly and $164,925 for other taxpayers.”

“Additionally, there may be further limitations on the deduction if your business has a significant amount of W-2 wages and/or depreciable property.”

“It's important to consult with a qualified tax professional or accountant to determine how the QBI deduction rules apply to your specific business and tax situation.”

It can also answer these questions/requests, along with literally millions of others:

•  The best recipe for lemon bars
•  Write an engagement letter for tax preparation
•  Comment on the elevation of the El Camino de Santiago de Compostela from Sarria to the end.
•  Write an ad for marketing services.

There is a disclaimer in place, as ChatGPT will occasionally generate wrong answers. It did generate a misleading answer when it was asked a very complex tax question about the Employee Retention Credit and greater than 50 percent owner wage eligibility.  

How can you use ChatGPT in business?  It might save you time with writing initial drafts of letters, ads, speeches, webpages, or other correspondence. It can also save time on research and data analysis, but be sure to verify its answers. It can help with coding if you’re into computer programming. You can also use it for fun or for a second opinion. 

Try ChatGPT to start seeing how it can benefit you and your business. 

*** 

Tweets

Insert a link to your newsletter, website or blog before you post these:

Our latest blog: “Cool Tech Tools: ChatGPT” is available now! Subscribe here: [link]

ChatGPT was launched in November 2022 and developed by OpenAI, an AI research lab tasked with developing a friendly AI. Learn more in our latest blog article: [link]   

How can you use ChatGPT in business?  It might be able to save you time with writing initial drafts of letters, ads, speeches, webpages, or other correspondence. Learn more in our latest blog article: [link]

#BusinessTip:Try ChatGPT to start seeing how it can benefit you and your business.   [link] 

The topic of AI has been in the news quite a bit recently, and one of the reasons is the launch of an AI chatbot called ChatGPT.  Find out more here: [link] 

DID YOU KNOW…The GPT in ChatGPT stands for generative pre-trained transformer. Learn more here: [link] 

As of this writing, ChatGPT is offered at no cost, but you must open an account and verify both your email address and phone number to access it. Learn more in our latest blog article: [link] 

ChatGPT did generate a misleading answer when it was asked a very complex tax question about the Employee Retention Credit and greater than 50 percent owner wage eligibility. But how can it be useful to you or your business?

Sign up for our newsletter to learn more: [link]

Download Volume 12, Issue 23 Document Here

BizBoost News
Volume 12, Issue 23
For distribution 5/12/23; publication 5/15/23

5 Ways to an Accountant’s Heart 

In the last few years, the shortage of accounting professionals has grown tremendously, and many business owners are struggling to find reputable, quality accounting services. Prices for accounting services may have gone up due to this supply/demand imbalance, and they will keep going up for years to come– due to the shortage of accounting graduates and the overall pipeline. It makes sense to explore how to work better with your accountant as they become more and more scarce and in demand.  

A Successful Partnership
Intuit conducted a survey in October 2022 which found tremendous benefits to the accountant-business owner relationship:

• Nine out of ten small businesses with an accountant or bookkeeper say they contribute to the business’s success. 
• More than eight out of ten business owners say accounting professionals helped them reduce the impact of inflation on their business. 
• More than 80 percent of business owners say their accountant helps them make better use of technology.
• More than 98 percent of business owners say they are more confident in their business because of their accountants.  
• Small business owners overwhelmingly say their accountants save them time and money. 

There’s no doubt that the relationship between a business owner and their accountant is of utmost importance to your business. Here are five ways to work even better with your accountant so that you can both benefit from this important business relationship. 

1.            Reduce your accountant’s administrative time.
There is a lot of paperwork when it comes to accounting and tax work, and administrative work goes hand in hand with that paperwork. When you can reduce the administrative work, your accountant can focus more on planning and advisory work, which is more valuable to your business. Here are a couple of tips. 

• When sending paper information to your accountant, scan it in and convert it to PDF instead. Then upload it to your secure portal.
• When sending digital information, convert images to PDF files when possible. Images can’t easily be converted to text as PDFs can.
• Instead of sending multiple files, combine PDFs into one image so they are in the same document.
• Use a client portal instead of email if a client portal is provided. 

2.                  Spend time understanding your accounting and tax reports.
A little education can go a long way. Learning a bit about finances and accounting can help you become a much better business owner. Your accountant may have suggestions on the best source for this or they may have videos they have produced themselves.  

3.                  Honesty is paramount.
It’s critical that there is trust and complete honesty on both sides of the relationship. Your accountant may have earned a CPA or Enrolled Agent or other certifications that took years to acquire. Their license is in peril if anything is not above board. You might be surprised to learn that there are potentially many penalties and jail time for the accountant as well as the client if fraud or other criminal acts are discovered. 

One example of something you can do to ensure your accountant’s trust is in tax preparation: clients should complete the tax organizer in full when the tax preparer sends it, even though it is a pain to do so. If a piece of information is missing, or you decide it’s not important but the government feels it is, that omission can spell the beginning of trouble for both you and your tax preparer. 

4.                  Be mindful in communications. 
Good communication is an essential part of the accountant-client relationship. A great client will take the time to read any emails or correspondence and answer all the questions in the email (not just the first one!). 

Both you and your accountant may have preferred ways of communicating, among the choices of text, voice, and email. Keep in mind your accountant has a higher duty to protect your private information. Text and unencrypted email can be problematic for them, depending on the type of information to be conveyed. 

To save time and reduce interruptions, keep a notes file on your desktop, and add any non-urgent questions to your list. That way, you can cover a lot of ground when you meet periodically.  It’s a better use of both of your time. Of course, if you have urgent questions, feel free to contact your accountant at any time.  

5.                  Vet any advice you hear.
Be wary of unsolicited advice as well as tips you might see on social media. They can be uneducated and worst case, downright fraudulent. One of the biggest problems today is ERC mills: companies that have sprung up to help small businesses claim the Employee Retention Credit from 2020 and 2021. Most of these companies are not following IRS guidelines and do not have the proper credentials to evaluate the tax law properly. 

Social media sources can be quite unreliable as well. TikTok has some outrageous financial claims regarding the choice of business entity, so please do not act on this advice until you speak with a qualified accounting or tax professional.  

Try these tips to build better rapport with your accountant, and your business will blossom as well.

***

Tweets

Insert a link to your newsletter, website or blog before you post these:

Our latest blog: “5 Ways to an Accountant’s Heart” is available now! Subscribe here: [link]

Many business owners are struggling to find reputable, quality accounting services, but don’t despair! We’ve got tips on how to build a successful partnership with your accountant! Learn more in our latest blog article: [link]   

Prices for accounting services may have gone up due to a supply/demand imbalance. Learn more in our latest blog article: [link]

#BusinessTip: The relationship between a business owner and their accountant is of utmost important to your business.  [link] 

More than 98 percent of business owners say they are more confident in their business because of their accountant.  Find out more here: [link] 

DID YOU KNOW… Nine out of ten small businesses with an accountant or bookkeeper say they contribute to the business’s success.  Learn more here: [link] 

Try these tips to build better rapport with your accountant, and your business will blossom as well. [link] 

How can you maintain a successful partnership with your business accountant? Sign up for our newsletter to find out: [link]

Download Volume 12, Issue 22 Document Here

BizBoost News
Volume 12, Issue 22
For distribution 4/28/23; Publication 5/1/23

Don’t Shortchange Yourself: What an Entrepreneur’s Pay Should Cover
Being in business means taking a lot of risks, especially financially, and as an entrepreneur, you deserve to be rewarded for those risks. Your pay is just one of the many benefits of your self-employment. But it’s not like the pay you get as an employee; it needs to be more comprehensive than that.  

Getting Paid
The two major ways entrepreneurs can take money from their businesses are through draws or by receiving a paycheck.  If your business is incorporated, you’ll take a paycheck; if your business is a sole proprietorship or a partnership, you’ll take a draw.  

Here’s a list of five items to make sure you have covered in your pay:

1.     Reasonable Compensation
If you were doing the same work for a company that hired you, what would your pay be?  Are you making at least market equivalent or better?  A lot of times, as entrepreneurs, we tend to focus only on this piece of our compensation when we set our pricing, and that’s a big mistake.    

There are also tax implications of paying yourself too little (to avoid payroll taxes if you take a paycheck) or too much. 

2.     Retirement plan
When you work for yourself, no one is going to fund your retirement for you.  Although the Social Security program helps, it’s up to you to set additional money aside for a comfortable future when you can’t or don’t want to work anymore.  

3.      Benefits
Employees get vacations, health insurance, and bonuses; and you should too.  This should be part of your compensation package as an entrepreneur, and there are many tax advantages as well.

4.      Taxes
You need to cover taxes that will be incurred on your pay as well as your business profits. This includes:

• Normal withholding for federal income taxes, state and local income taxes, Medicare, and social security. If you receive a paycheck, these will be taken out of your paycheck, but they may not be enough because they don’t consider taxes on your profits. If you take a draw, you may not have withholding, but you will need to factor in self-employment taxes.
• Taxes on your profits. For sole proprietors, partnerships, LLCs, and S Corps, your taxes will be figured on the profits of your business when you complete your federal income taxes. They will “pass-through” from your business to your personal return. Don’t let this part surprise you!
• State business taxes. If your business does business in multiple states, you must file a tax return for each state. Many of them collect taxes based on flat corporate fees, the revenue you earned in that state, state payrolls, and/or the value of property owned in that state.

Check with your tax advisor so that there are no surprises in your tax bill for your business or your personal returns.   

5.      Profit
As an entrepreneur, you take extra risks when you own your own company, and you should be compensated accordingly.  Your capital is tied up in your business and should be earning a good return in addition to your regular salary or draw.  

Complete Compensation
Your compensation should include all of the above components.  If it doesn’t and you feel like you can’t afford to pay yourself that much, then your pricing might not be reflecting all of these items correctly, you might have a volume problem, or your business model may need some adjusting.  

It’s normal to take a smaller paycheck the first few years as the business is growing, but if you’re still doing it after several years or constantly have cash flow issues, then something may be wrong.  

If you’d like our help in this area of your business, please reach out and let us know.  

Make sure your future is bright and financially secure by considering all five items in your entrepreneur compensation.   

***

Tweets

Insert a link to your newsletter, website or blog before you post these:

Our latest blog: “Don’t Shortchange Yourself: What an Entrepreneur’s Pay Should Cover” is available now! Subscribe here: [link]

Your pay is just one of the many benefits of your self-employment. Learn more in our latest blog article: [link]   

Being in business means taking a lot of risks, especially financially, and as an entrepreneur, you deserve to be rewarded for those risks. Learn more in our latest blog article: [link]

#BusinessTip: Make sure your future is bright and financially secure by considering all five items in your entrepreneur compensation. [link] 

The two major ways entrepreneurs can take money from their business is through draws or by receiving a paycheck.  Find out more here: [link] 

DID YOU KNOW… Your pay is just one of the many benefits of your self-employment. But it’s not like the pay you get as an employee; it needs to be more comprehensive than that.  

[link] 

When you work for yourself, no one is going to fund your retirement for you. Learn more in our latest blog article: [link] 

As an entrepreneur, you take extra risk when you own your own company, and you should be compensated accordingly. Sign up for our newsletter to learn more: [link]

Download Volume 12, Issue 22 Document Here

BizBoost News
Volume 12, Issue 22
For distribution 4/28/23; Publication 5/1/23

Don’t Shortchange Yourself: What an Entrepreneur’s Pay Should Cover

Being in business means taking a lot of risks, especially financially, and as an entrepreneur, you deserve to be rewarded for those risks. Your pay is just one of the many benefits of your self-employment. But it’s not like the pay you get as an employee; it needs to be more comprehensive than that.  

Getting Paid
The two major ways entrepreneurs can take money from their businesses are through draws or by receiving a paycheck.  If your business is incorporated, you’ll take a paycheck; if your business is a sole proprietorship or a partnership, you’ll take a draw.  

Here’s a list of five items to make sure you have covered in your pay:

1.      Reasonable Compensation.  
If you were doing the same work for a company that hired you, what would your pay be?  Are you making at least market equivalent or better?  A lot of times, as entrepreneurs, we tend to focus only on this piece of our compensation when we set our pricing, and that’s a big mistake.    

There are also tax implications of paying yourself too little (to avoid payroll taxes if you take a paycheck) or too much. 

2.      Retirement plan
When you work for yourself, no one is going to fund your retirement for you.  Although the Social Security program helps, it’s up to you to set additional money aside for a comfortable future when you can’t or don’t want to work anymore.  

3.      Benefits

Employees get vacations, health insurance, and bonuses; and you should too.  This should be part of your compensation package as an entrepreneur, and there are many tax advantages as well.

4.      Taxes. 
You need to cover taxes that will be incurred on your pay as well as your business profits. This includes:

• Normal withholding for federal income taxes, state and local income taxes, Medicare, and social security. If you receive a paycheck, these will be taken out of your paycheck, but they may not be enough because they don’t consider taxes on your profits. If you take a draw, you may not have withholding, but you will need to factor in self-employment taxes.
• Taxes on your profits. For sole proprietors, partnerships, LLCs, and S Corps, your taxes will be figured on the profits of your business when you complete your federal income taxes. They will “pass-through” from your business to your personal return. Don’t let this part surprise you!
• State business taxes. If your business does business in multiple states, you must file a tax return for each state. Many of them collect taxes based on flat corporate fees, the revenue you earned in that state, state payrolls, and/or the value of property owned in that state.

Check with your tax advisor so that there are no surprises in your tax bill for your business or your personal returns.   

5.      Profit.
As an entrepreneur, you take extra risks when you own your own company, and you should be compensated accordingly.  Your capital is tied up in your business and should be earning a good return in addition to your regular salary or draw.  

Complete Compensation
Your compensation should include all of the above components.  If it doesn’t and you feel like you can’t afford to pay yourself that much, then your pricing might not be reflecting all of these items correctly, you might have a volume problem, or your business model may need some adjusting.  

It’s normal to take a smaller paycheck the first few years as the business is growing, but if you’re still doing it after several years or constantly have cash flow issues, then something may be wrong.  

If you’d like our help in this area of your business, please reach out and let us know.  

Make sure your future is bright and financially secure by considering all five items in your entrepreneur compensation.   

***

Tweets

Insert a link to your newsletter, website or blog before you post these:

Our latest blog: “Don’t Shortchange Yourself: What an Entrepreneur’s Pay Should Cover” is available now! Subscribe here: [link]

Your pay is just one of the many benefits of your self-employment. Learn more in our latest blog article: [link]   

Being in business means taking a lot of risks, especially financially, and as an entrepreneur, you deserve to be rewarded for those risks. Learn more in our latest blog article: [link]

#BusinessTip: Make sure your future is bright and financially secure by considering all five items in your entrepreneur compensation. [link] 

The two major ways entrepreneurs can take money from their business is through draws or by receiving a paycheck.  Find out more here: [link] 

DID YOU KNOW… Your pay is just one of the many benefits of your self-employment. But it’s not like the pay you get as an employee; it needs to be more comprehensive than that.  

[link] 

When you work for yourself, no one is going to fund your retirement for you. Learn more in our latest blog article: [link] 

As an entrepreneur, you take extra risk when you own your own company, and you should be compensated accordingly. Sign up for our newsletter to learn more: [link]

Download Volume 12, Issue 21 Document Here

BizBoost News
Volume 12, Issue 21
For distribution 4/17/23; publication 4/20/23

Cool Tech Tools: Drones

Drones were considered fun when they first came out, but they are far from toys. Drones have surprising benefits with extremely high return on investment to certain business owners.

A drone is a robot that can fly and that is controlled by a remote device. The technology includes GPS (global positioning system) and built-in sensors. There are many benefits to using drones:

•          They can go places where it might be dangerous for employees to access, improving employee safety.
•          They increase efficiency and productivity while decreasing workload and costs.
•          They can improve accuracy.

A drone can be used in the following ways:

•          To gather information for pricing estimates, such as roof repair
•          To inspect items, such as a tree’s disease progression
•          To monitor systems or the status of certain items, such as landfill fire risks
•          To photograph items from an aerial view

There are many industries that have begun to routinely use drones, such as:

•          Forestry
•          Agriculture
•          Construction
•          Waste Management
•          Environmental
•          Disaster Relief Services
•          Photographers
•          Real Estate
•          Advertising
•          Event Planning
•          Highways, Traffic, and Road Safety

Rules for Drones
Before you fly your new drone, there are rules you’ll need to follow. The FAA (Federal Aviation Administration) has put into place the rules for flying drones safely. There may also be rules passed at the state and local levels that you’ll need to check on. 

When using drones for commercial purposes, you’ll need to register your drone, familiarize yourself with the operating rules for your type of drone, and pass a pilot’s test.  Find out more here: https://www.faa.gov/uas

Cost of Drones
Drones can cost anywhere from $50 to $25,000 and more. A beginner recreational drone can cost under $100, while a beginner commercial drone can range from $300 to $500. A commercial drone typical starts at a $1,000 price tag. Drone prices will vary depending on their size, features, and intended usage. 

If your industry is one that is adopting drones, it might be a good time to start researching them for your business. 

***

Tweets

Insert a link to your newsletter, website or blog before you post these:

Our latest blog: “Cool Tech Tools: Drones” is available now! Subscribe here: [link]

Drones have surprising benefits with extremely high return on investment to certain business owners. Learn more in our latest blog article: [link]  

Drone prices will vary depending on their size, features, and intended usage. Learn more in our latest blog article: [link]

#BusinessTip: When using drones for commercial purposes, you’ll need to register your drone, familiarize yourself with the operating rules for your type of drone, and pass a pilot’s test.  [link]

If your industry is one that is adopting drones, it might be a good time to start researching them for your business.  Find out more here: [link]

DID YOU KNOW… Many industries that have begun to routinely use drones. Learn more here: [link]

Drones can improve employee safety by accessing dangerous areas. They can also improve efficiency, productivity, and accuracy. Learn more in our latest blog article: [link]

Thinking about flying a drone for your business? Make sure you check the FAA’s rules and laws for flying drones safely. Sign up for our newsletter to learn more: [link]

Download Volume 12, Issue 20 Document Here

BizBoost News
Volume 12, Issue 20
For distribution 4/3/23; publication 4/6/23

6 Ideas to Put the Spring into Your Spring Revenue

While spring brings a change in the weather for most locations, it also brings a number of opportunities to refresh your products and services. Spring is a great time to boost your marketing campaigns so that you can boost your business revenues.

Adding the theme of spring to your marketing campaigns allows customers to see your products and services in a different light. Here are six ways to add a spring theme to your products and services. 

1.      Add a holiday twist.
With a plethora of spring holidays to choose from, you can build a sale around any of these.

•          Easter
•          May Day
•          Mother’s Day
•          Memorial Day
•          Flag Day
•          Father’s Day

Memorial Day is the big one; it ushers in warmer weather and signals the end of school for kids and teachers. Plus, customers are used to seeing sales during this long weekend. Mother’s Day can be a revenue booster for many businesses as well. 

Which one of these holidays can you best connect your products and services? That’s your answer for an effective spring sale. If you are an egg farmer, the answer is obviously Easter. If you offer women’s products, Mother’s Day is a sure bet. The same goes for men’s items and Father’s Day. If your product is patriotic, Flag Day or Memorial Day should be your choice. 

2.      Temporarily switch to spring packaging.
If you sell products with packaging, put some color into your offerings to make them stand out. Common spring colors include green, yellow, pink, orange, baby blue, and pastels. Consider adding flowers to your artwork or to your actual offering. 3.      Hold an open house. 
If you offer services and no products, an open house works especially well. Invite your prospect list and current clients – ask them to bring a friend – and offer refreshments with a spring theme.  Plan an agenda with a speaker on a topic adjacent to your offerings and allow time for guests to mingle and network.  4.      Free spring gift with purchase.
Providing a free gift is common in the cosmetics industry, but you may be able to apply the idea to your products and services. Make it spring-focused if possible.

An easy idea that works in any industry is a spring basket of goodies, which can be food, personal items, or just about anything that will fit in a basket. A spring basket in conjunction with any of the above holidays works great. For example, a basket with items women would love would work for Mother’s Day. With Memorial Day, you could create a picnic theme and add tiny flags to further tie it to the holiday. These baskets could be sold separately or included for free with a large purchase.

5.      Spring cleaning.
Spring cleaning is a common theme you may be able to use in your offerings. Whether it’s actually cleaning, removing clutter, becoming more organized, or even crossing an item off the to-do list, this theme will help to connect the feeling of accomplishment to your products and services. 

If you offer any kind of organizational services and products, such as closet design, junk removal, or house cleaning, this is a perfect theme. It also works with companies in the business of beautifying your home or office space, such as wardrobe designers, interior decorators, home furnishings businesses, florists, art galleries, landscape businesses, and plant nurseries.

6.      Graduation.
Spring is a time for graduation ceremonies. Tie your products and services to graduation, starting a new life, or progressing your career.    

Mix and match these six ideas to produce an even more powerful spring theme in your business.

Whether you go with a small change like adding a flower to your offerings or a big change like an entirely new marketing campaign with a bonus gift, adding a spring theme to your products and services will be like a breath of fresh air to your sales. 

***

Tweets

Insert a link to your newsletter, website or blog before you post these:

Our latest blog: “6 Ideas to Put the Spring into Your Spring Revenue” is available now! Subscribe here: [link]

Spring is a great time to boost your marketing campaigns so that you can boost your business revenues. Learn more in our latest blog article: [link]  

Check out six different ways to add a spring theme to your products and services and refresh the way your customers see your products and services: [link]

#BusinessTip: Refresh your products and services with themes that matches the season.  [link]

Want to refresh your marketing campaigns? Build a sale around any of the upcoming holidays this spring!  Find out more here: [link]

DID YOU KNOW… Adding a theme to your marketing campaigns allows customers to see your products and services in a different light. Learn more here: [link]

Add a breath of fresh air to your sales by adding spring themes to your marketing this season. Learn more in our latest blog article: [link]

Providing a free gift is common in the cosmetics industry, but you may be able to apply the idea to your products and services. Sign up for our newsletter to learn more: [link]