Tag Archives: business tips

Self-employment Tax Mistakes

RE0025Some business owners attempt to save money by preparing their own taxes. In the end, they actually may pay more in taxes than are necessary, or they may underpay, which could result in losing hundreds or thousands of dollars.

According to an article published by Tyler Martin, CPA, here’s a list of things business owners commonly forget on their taxes:

Deduct Advertising and Promotion Costs. This includes media, Internet and any other advertising that promotes your business. It would also include novelty items or promotional gifts, such as coffee cups, t-shirts and pens with your company name or logo on them.

Deduct Dues and Subscriptions. This includes magazines and periodicals that are necessary for your business, as well as membership fees paid to any business-related organization.

Deduct Licenses and Permits. If your city requires a business license, make sure to deduct the cost of it.

Deduct Business-related Internet Costs. If you use the Internet for your business or have a website, then there is a good chance some or all of your Internet bill is deductible.

Deduct Business-related Cellular and Telephone Expenses. Calls or lines for business purposes are all deductible.

Deduct Office Supplies. Office supplies used for your business are deductible.

Deduct Business-related Meals and Entertainment. Do you take clients out to lunch or dinner to discuss business? If so, 50 percent of these costs is deductible.

Deduct Business-related Travel. Whether it’s airfare and hotel costs to attend a trade show or the cost of gas to drive to training or an industry event, you can deduct these expenses.

Deduct Business-related Auto Expenses. There are couple of ways you can deduct auto expenses, such as tracking your mileage or deducting the cost of a vehicle dedicated solely to your business. It’s best to consult a tax expert to determine how much you should deduct.

Deduct Business-related Electronic Equipment. Computers, printers and smartphones used for business are partially or fully deductible.

Deduct Outside Services. Costs related to your business, such as tax and accounting help, are typically deductible.

Pay Self-employment Tax. If you are a newly self-employed person, you may not be aware that you will be responsible for a new tax: self-employment tax. It can add to your tax bill quickly, so make sure you understand how the tax is computed and plan your cash flow accordingly.

Pay Payroll Taxes: If you operate your business solo as owner and operator, then you may have yet to face the complications of payroll taxes. As your business grows and prospers, you may need to hire employees. Payroll taxes can be complicated due to compliance policies and deadlines. Inaccurately paid payroll taxes can, in fact, cause businesses to go “belly up,” according to Jessie Seaman, a licensed tax professional and senior staff associate at Tax Defense Network.

Some of the stress and pressures of calculating or miscalculating taxes that are due can be relieved by outsourcing to a tax professional. The fees incurred to hire a licensed tax professional are relatively cheap in comparison to the potential expenses paid by the business for improperly prepared tax returns.

In addition to considering hiring a professional, it is crucial to keep good records throughout the year, and you can pay taxes quarterly to stay on task. If you are not keeping up with expenses and receipts and/or avoiding deadlines, it will be very difficult to try to accurately run down all documentation and figures that are required in order to file your taxes.

Want to Be a Successful Business Owner? Don’t Make These Mistakes

7K0A0014-2While the idea of owning a business is a dream for many people, there are times when entrepreneurs fail to think things through. Funding the business, having an in-demand product or service to sell, and hiring employees are some of the common challenges that entrepreneurs face:

  • Hiring employees too quickly can financially drain your business. If you pay people to do nothing, and no sales are generated from their work, then employing a staff is a financial loss.
  • Borrowing money from lenders can be of great service to you, but don’t make the mistake of borrowing more than you really need. You will likely spend that money and have to pay interest back on money you didn’t really need to borrow.
  • Assuming your business will make money in the early years is one of the most common mistakes entrepreneurs make. If your business shows a profit early on, that’s great — but don’t assume it will, and be prepared for all of the expenses.
  • Marketing your business is necessary and takes time. You must market to both win and retain customers who may not know anything about you or your business.
  • Leasing Space You Don’t Need. If you don’t really need a retail or office space, then don’t rent it. You can save money working from home — and receive a few tax incentives for doing so.

Many successful entrepreneurs did not succeed at first and experienced their fair share of trial and error to find out what works for them. Check out these business leaders who failed before they succeeded:

  • Akio Morita is the founder of Sony products. The first product was a rice burner that burned the rice. But Morita kept pushing forward with new ideas.
  • Bill Gates started a company called Traf-O-Data that failed, and he dropped out of Harvard. Gates didn’t give up, though, as he is the billionaire behind Microsoft.
  • Colonel Sanders was 65 years old when he founded Kentucky Fried Chicken. Did you know his famous secret recipe was rejected more than 1,000 times before a restaurant agreed to use it?
  • Henry Ford’s first two automobile companies failed and left him broke. He refused to give up, though, and founded Ford Motor Company with assembly line production. The result: He was once known as one of the three richest men in the world.
  • Walt Disney was fired by an editor for lack of imagination and having no original ideas. His first animation company went bankrupt, and he was turned down hundreds of times for loans to build Disney World. Today, the Disney Company averages $30 billion in revenue annually.

Many people have failed at first only to ultimately succeed. Learn from them and gain inspiration from them on your journey as an entrepreneur.

If you are ready to make your dream of owning a business come true, National Property Inspections in the United States and Global Property Inspections in Canada have franchise opportunities available in your area. Contact Julie Erickson at 1.800.333.9807, Ext. 24, for information about our property inspection franchise opportunities.

Choosing the Right Franchisor

IMG_1108Do you find yourself thinking that you are just not where you want to be in life? Maybe your daily work routine is too monotonous and you need to do something else. Or have you come to the conclusion that you really want to make an investment in your life, to discover and flourish your own potential?

You’ve likely spent many years working for someone else, and you have gained a lot of business knowledge. After all the years of working 8 to 5, you want to become your own boss. You want to start a business.

Maybe you’ve decided the field you want to work in and you have the investment money you need to get your business going. You are confident the in the direction that you are going, and you have decided to purchase a franchise. With a franchise system, you’ll get brand recognition and the training you need. You’ll receive proven and tested business, sales and marketing plans, and you’ll have support from the franchisor’s home-office team. You understand the advantages of becoming a franchisee and all of the resources available to you.

The final step is choosing the right franchisor. You should know what to look for when choosing a franchisor. Here is some key information to seek when considering the purchase of a franchise:

Supply vs. Demand — Inquire about the market for the franchisor’s services or products, and find out how many people really need the service. Research competitors in your market. Ask the franchisor why and how their franchise stands above its competitors.

Track Record — Learn about the company — how long it has been operating, and how it survived economic recessions. This information may be indicative of business strategies and the market demand under any given circumstances.

Technology — What types of technology do the franchisees use and how does the technology compare to that of competitors? What are key differentiators in services or products for marketing and customer service? The quality of the technology may also indicate financial stability of the franchisor.

Education — Does the franchisor provide thorough training and continuous support and assistance if needed?

Franchisee Selection — Is the franchisor selective as to who they choose to become part of their company? Requiring certain criteria or qualifications is beneficial and necessary. If you are trying to protect your investment, the franchisor should be trying to do the same.

Franchisees — Franchisors want franchisees who show the most promise. Most franchisors will look at the big picture when selecting new franchisees so everyone in the company benefits. Be flattered that a franchisor wants to get to know you and asks for information about you. Likewise, the franchisor should provide you with contact information for franchisees who can help answer questions you may have.

Corporate Office — How does the franchisor’s corporate office assist you when you have a problem or need? Whether it’s a marketing matter or something to do with accounting, will they help you? What is the turnaround time for your issue to be addressed and resolved? These could be questions you ask of current franchisees.

Royalties and Legalities — This area is one you must inquire about with the franchisor. Any fees or legalities should be clear and concise, well-documented, and upfront before you sign on the dotted line. You should not be pressured or misled. You should be given time to review all information and take precautionary steps before closing the deal.

Integrity — A franchisor’s integrity will come into play in all areas of your business. Make sure your franchisor has proven integrity by all means of business. Check with current franchisees to find out about a franchisor’s integrity.

What to Know Before You Buy a Franchise

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You made your decision and have evaluated the franchise you want to purchase. You are ready to make the investment and complete the required training to start your business. Before you make a final commitment, you should check out two things: the FTC and the FDD. Let’s look at what each of these acronyms stand for and what they mean to your business.

  • U.S. Federal Trade Commission (FTC): The FTC’s mission is “to prevent business practices that are anticompetitive or deceptive or unfair to consumers; to enhance informed consumer choice and public understanding of the competitive process; and to accomplish this without unduly burdening legitimate business activity.”
  • Franchise Disclosure Document (FDD): The FDD is a legal document that the FTC requires franchisors to provide to franchise candidates. The prospective franchise owner must receive the FDD at least 14 days prior to purchasing the franchise. An FDD is intended to give candidates the information they need to make a wise decision about whether to buy the franchise.

The FTC more or less provides legal guidelines that a franchisor must follow in order to protect both consumers and franchisors. FTC guidelines are designed to promote integrity for both franchisors and franchisees, and the information is upfront, clear and concise.

However, a franchisor’s FDD may be lengthy and contain legal descriptions that a potential franchisee needs clarified. With the FDD, both parties are protected, as all information is documented and available before closing the deal — there are no verbal agreements that may prove to be worthless for the prospective franchisee.

The franchisor’s information in the FDD is accurate and legally binding for both parties. In the event that you are not comfortable with the FDD, you could hire an attorney to provide you with the legalities and commitments written in the document. It would be good practice to review with a qualified franchise attorney regardless of how comfortable that you are with the agreement.

The FDD is an important part of your business venture. It provides the rules and regulations that must be followed, as well as information that you may not be able to easily obtain on your own. Some types of information that you will find in the FDD:

  • Industry trends
  • Competition
  • Advertising costs
  • Current and former franchisees
  • Territory
  • Renewal and termination
  • Royalties
  • Financial statements
  • Obligations

Most of the time, franchisors have worked hard and succeeded with a proven business model and they have prospered. They will have in criteria in place to which franchisees must adhere to, or else you may not be eligible to continue to do business with and for the franchisor.

How to Fund Your Small Business

Man writingAre you confident that you want to start your own business and that you have what it takes to succeed? Perhaps the only dilemma that you have about starting a business is how to fund it. There are many options for financing your small business:

  • Family and friends. You may have a close friend or family member who could loan you the money you need to start your business. If you choose this option, make sure to have an attorney draw up a contract to protect both parties involved.
  • Savings. If you have been lucrative with your earnings and have socked away money in a savings account, then can use that money to fund your business.
  • IRA and 401k accounts. Perhaps you have money in a retirement plan — you may consider borrowing against or withdrawing from these accounts to fund your business.
  • A part-time job or even a second full-time job can give you the extra income needed to start saving money to invest in your business.
  • Co-partner. Going into business with a partner could reduce your portion of the start-up costs, or your partner could fund your portion of the expense. Be sure that the person you partner with in business is honest, trustworthy and responsible, though.
  • Sell personal items. Parting with your boat, motorcycle, recreational vehicle or vacation home may give you the money that you need for your start-up.
  • Bank loan. Apply for a business loan at a bank to see if you qualify for financing based on the bank’s loan criteria.
  • SBA Loan. The U.S. Small Business Administration is designed to fund small-business loans of varying types and criteria depending on the business type and need.

Bank and SBA loans will most likely be harder to attain. It may take some time to collect all of the required documentation and to complete and submit the prequalification information. However, be persistent; if one resource bank or resource doesn’t work out, try another one. And, you may be one of the lucky people who receive a loan hassle-free on the first attempt.

In the event that you cannot seem to acquire the funding needed for your business, don’t give. You will just need a little more time than expected to get your business up and running. As is true for many successful business owners, determination and perseverance will get you a long way.

If you are ready to make your dream of owning a business come true, National Property Inspections in the United States and Global Property Inspections in Canada have franchise opportunities available in your area. Contact Julie Erickson at 1.800.333.9807, Ext. 24, for information about our property inspection franchise opportunities.

What You Need to Know SBA Loans

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The U.S. Small Business Administration (SBA) is designed to fund loans that small businesses loans may need for a variety of different reasons. However, the SBA does not actually provide the money; rather the organization provides the guarantee that the debt will be repaid to their partners.

The SBA website offers overviews of loans that entrepreneurs may use to start their businesses. The most common loan is the 7(a) loan. Here is some information regarding this loan:

  • Eligibility: Operate a for-profit, small business (by the SBA’s terms of small). The business must reside in the United States or its territories. Applicants must demonstrate need for the loan and must have used other resources first. Applicants may not have delinquent U.S. government debt.
  • Use of proceeds: Loan recipients must use the funds to establish a new business, purchase equipment, pay operational expenses, refinance existing debt, etc.
  • Repayment terms: Based on the recipient’s ability to pay and other determining factors, repayment could range from seven to 25 years.
  • Fees and interest: Maturity fee and fixed or variable interest rates will be negotiated.
  • Loan application checklist:
    • Loan application
    • Personal background and financial statement
    • Business financial statement
    • Profit and loss statement
    • Projected financial statement
    • Ownership and affiliations
    • Business certificate/license
    • Loan application history
    • Income tax returns
    • Resumes, business overview and history
      Business lease
    • Existing business information if purchasing an existing business
  • Processing time: 36 hours.
  • Types of 7(a) loans: Several types are offered.

Visit the SBA website to review the complete information regarding available loans, specific guidelines and requirements available for your business needs.

With all of the information provided by the SBA, entrepreneurs have an enormous opportunity to get their start-up loans funded and to repay them with fair and reasonable terms. Visit the SBA’s website, make inquiries about what you want to know, gather your documentation, apply for the loan and begin your success story.

Starting Your Own Business: Strategies for Success

IMG_1109Age is mostly irrelevant in becoming a determining factor for succeeding as an entrepreneur. There have been young entrepreneurs as well as older, established entrepreneurs. Some have built success on seemingly impossible ideas and others seem to possess a certain amount of luck. For the most part, a successful entrepreneur will have to fearlessly work hard, cultivate positive relationships and develop great business skills.

A recent article in Entrepreneur Magazine noted five things you should do when you are ready to become an entrepreneur:

  • Go all in. Once you’ve made your decision to start a business, don’t doubt yourself, and no looking back.
  • Find a mentor. Enjoy your success with an experienced entrepreneur who has agreed to mentor you.
  • Create daily routines. Set goals for what has to be accomplished each day, and make sure you abide by your own rules.
  • Eliminate negative people. People who wallow in self-pity and are unemployed may not be the ideal people to associate with. They may not really want to help you or see you succeed.
  • Network as much as possible. Try to meet new people and tell each of them what you do.

Focus on Your Customers
It is helpful to pursue things that you enjoy doing and master what you do. No matter what carefully placed business strategy you launch, the bottom line is you must win customers to whom you sell your product or services. Without customers, you have no business, no employees, no self-employment income or success.

Make each customer feel important, try to get to know a little about them, follow up with them and make sure they are happy with your service. Your customers are actually the employer — they are how you succeed and how you get paid. Make sure you deliver what you promise, when you promise it. Be honest and reputable, and provide quality for what they purchase. Be persistent and patient as your customers will grow and return over time.

Ready to become an entrepreneur? Take the next step and inquire about a franchise opportunity with National Property Inspections or Global Property Inspections. We’ve already developed the business, sales and marketing models for you. For further information, contact Julie Erickson at 1.800.333.9807, Ext. 24.

Starting a Property Inspection Business: Franchise or Independent?

When starting a business, every entrepreneur faces a crucial decision: franchise or independent? Either business model can succeed or fail. Sometimes it depends on the type of business, sometimes on the entrepreneur and sometimes on sheer luck.

National Property Inspections and Global Property Inspections have training business owners in the home and commercial property inspection business using our franchise model for nearly 30 years, and the vast majority of our franchise owners have enjoyed great success. We find that in the property inspection industry, our franchise owners are more successful than independent business owners. But why is that? We believe it’s simply because our franchise provides everything an entrepreneur needs to start an inspection business, including training.

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If you have a degree or work experience in a field, then you may have the training, experience and business know-how that you’ll need to start your business independently. However, many businesses — such as property inspection — require entrepreneurs to obtain further training, especially in states or provinces that require licensing, certification or registration.

If you are ready for a change of careers, then working with a franchisor — who will provide the necessary tools, training and guidance — may be a better option. Likewise if you want to start your own business but don’t have much business experience. Starting a business can be scary. Working with a franchisor can help alleviate some of the unknowns when you start your business and give you an edge for success.

If you are interested in receiving more information about NPI or GPI, please contact Julie Erickson, director of franchise sales, at julie.erickson@npiweb.com.

Business Communications: Teaching Old Dogs New Tricks

Submitted by Roland Bates, President, NPI/GPI

Inspector + Client2Like the old Bob Dylan song, “Times, they are a-changing,” and that’s especially true with business communication. In case there are any “old dogs” reading this, you have to embrace change or be left behind. Or worse yet — be called an “old dog.” Still, there’s nothing like a good old-fashioned face-to-face meeting or even a phone call. I find the best mix of communication for business is a mix of the old and the new.

Pretty face to pretty face. There is no substitute for meeting clients or making sales calls face-to-face. In my limited-capacity mind that’s the best way to solicit business, build relationships and work out any perceived differences that two interested parties might have. And ultimately that’s the only way to shake hands. Shaking hands is the best way to greet someone and, assuming it’s a business meeting, symbolize “deal done.”(Let’s hope the handshake is never entirely replaced with the Howie Mandel fist bump.)

Did I catch you at a busy time? In order of importance, and next to face-to-face meetings, is the ever-so-important phone call. I can only guess at how many business-related phone calls I’ve had in the last 25-plus years. Some days my ear would literally become sore. Once you know someone well, a phone call is still one of the best ways to discuss details of a business matter, build relationships or tell that joke that only you find funny (all my jokes are funny, I think). For years, phone calls greatly outnumbered business-related emails.

Emails: Can’t live without them. At first emails seemed more interesting than practical. I might have checked them once a day. But we now have the ability to attach photographs, documents and the like, which has made email an essential business tool. It’s said that most businesspeople get more business-related emails than they do phone calls. I believe that, for that has definitely been the case for me for some time now. And speaking of phone calls, who doesn’t have a cellphone?

Text messaging. Are business-related text messages slowly outnumbering business-related phone calls and emails combined? I wouldn’t bet against it. There are a lot of people who silence the ringer on their phones and use them to call out but don’t answer incoming calls. They use their cells for mostly texting.

I’ll save webinars, video conferencing, etc., for another time.

Teach Yourself to Think Differently

By Roland Bates, President, NPI/GPI

NPI Inspector2We have to think and make many conscious decisions every day, even if it’s deciding what color socks to wear or what to have for dinner. The question I pose is this: Can we teach ourselves to think from a business perspective of solving problems and coming up with great ideas?

As a franchisee, every time you make a business decision, you will become better at running your franchise and thinking like a business owner. As you probably know, it’s always better to use sound reasoning and the voice of experience to avoid painful mistakes. Sometimes you’ll know just what to do when a problem arises, based on your past experience. Other times, though, you’ll be stuck. That is one of the advantages to owning a franchise.

Franchisors track what has worked for franchisees, as well as what didn’t work for others. They experiment with different marketing and business strategies. Although you will do a lot of your own thinking when you own a franchise, you should still follow your franchisor’s business model — they know what works. Furthermore, for most issues you’ll encounter relative to your business, your franchisor likely has experience and has helped other franchisees resolve the same or similar issues before. When you learn to use your franchisor as a resource, you’ll be able to spend more time working on your business and not quite as much working in your business.

A business owner or franchisee needs the ability to think and focus intently. But for my two cents, rather than forcing ourselves to think, we should let ourselves think. Some of your best ideas will just come to you if when you least expect them.